The Bush Stagnation, Its Etiology, and a
Timothy A. Canova and E. Lynn Turgeon
Gorbachev complained about the bad advice his economists had been giving
him. Bush laughed and said, “I’ve had that experience, too!”
Beschloss and Talbott, At the Highest Levels1
Sitting across the table from the leader of a crumbling Soviet empire, President George Bush may have been able to laugh off the quality of his economic advice. But as a defeated candidate for reelection, President Bush would not have found the state of the United States economy to be such a laughing matter. Economic growth during the Bush presidency averaged between 1 and 2 percent annually, the poorest four-year record since before World War II. The only exception to this dismal record was the final quarter of 1992, and that was too little and too late to help save George Bush from defeat at the polls.
The U.S. economy during the Bush years was marked by slow economic growth, increasingly unequal distribution of income, higher levels of hidden or covert unemployment, higher-than-average levels of real interest rates at corresponding stages of the business cycle, and continued rapid growth of the federal debt levels. Most of these conditions were well entrenched by the end of the second Reagan administration, and the persistence of these conditions reflected some continuity in the basic economic policies between the two administrations. In the