George W. Bush Delivers a Basic Economics Lesson to Matt Lauer

In a follow-up interview to his prime time special with George W. Bush, NBC's Matt Lauer invited the former president on Wednesday's Today show and in the process got an education on how tax cuts can create jobs. During the wide ranging interview that covered everything from the Ground Zero mosque to Kanye West, it was Lauer's questions about Bush's tax policy where he revealed his bias. Noting that "there's a heated debate" over whether "we should continue in this country with your tax policies" Lauer pressed Bush "We've been living under that system for seven years now and we've seen incredibly slow growth...why should we continue down that path?" Bush shot back with a basic economics lesson for the Today co-anchor, as seen in the following exchange (video after the break):

MATT LAUER: There's a heated debate, right now over whether we should continue in this country with your tax policies. They call them the Bush tax cuts. Give me your best argument for continuing those tax cuts.

GEORGE W. BUSH: Well first of all, you know, it's too bad they call them the Bush tax cuts, they might have a better chance of being extended if they were the Lauer tax cuts.

(Laughter)

LAUER: Probably not gonna happen.

BUSH: Here's, here's the deal. Most new jobs are created by small businesses. Many small businesses pay tax at the individual income tax level because of how the are organized. For example, sub chapter S corporations or limited partnerships. Therefore, if you raise the top rate you're taxing job creators.

LAUER: But we've been living under that system for seven years now and we've seen incredibly slow growth in jobs. So why should we continue down that path?

BUSH: I don't accept that premise. For 53 or nearly 53 weeks we had consecutive job growth. The longest period in, one of the longest periods in economic history. You gotta remember, let me put this, put this in perspective. I come to office, there is a dotcom bubble burst. Then 9/11 comes and the country is in severe economic hardship. The tax cuts, in my judgment, stimulated an economic vitality and a lot of jobs were created. Now the question is, how do we create them? And part of the debate is should government try to create the jobs or should the private sector try to create the jobs. My argument is keeping taxes low will encourage the private sector to create jobs.

Before the question on taxes Lauer wanted to know how much "blame" Bush was willing to give himself for the economic meltdown and argued that "some would say you didn't call enough for regulation" to which Bush fired back his administration did its best to prevent the housing crisis by calling for better oversight, as he told Lauer: "The housing bubble was fueled by government policy"  which was the result of "Congress refusing to regulate Fannie and Freddie."

The following are the relevant portions of the interview as it was aired on the November 10 Today show:

MATT LAUER: Now to a Today exclusive, a live conversation with George W. Bush. The former president's new memoir, Decision Points is now out. President Bush, good to see you again. Good morning.

GEORGE W. BUSH: Good morning, Matt. Thank you.

LAUER: You spent a year and a half writing this book and I'm sure during the process you stopped and thought about what you were putting in there and what would the media react to? What would people really find that resonates with them? So now you've had a chance to hear a little bit of the reaction, over the last couple of days, any surprises to you?

BUSH: Well first let me debunk your premise. I really didn't spend time thinking about what the media would say about my book. I took the key issues, the key decisions I made and tried to explain to the reader why I made them. And, look, I was aware that some of the decisions I made were very controversial, and, and I knew that putting them in the book would create controversy, but I really wasn't concerned about what the media would think. What I'm more concerned about is how history will judge the decisions I made.

LAUER: I was interested in the New York Times this morning, there's an article that, that says that perhaps inadvertently, by sharing the story you shared about your mother's miscarriage when you were a teenager, you may have started a national conversation about the-

BUSH: Really?


LAUER: -complex psychological fallout of miscarriage.

BUSH: Yeah.

LAUER: That must be rewarding to you.

BUSH: Yeah it is. I had no intention of creating a national dialogue. My intention was to describe a relationship between a mom and her son and a interesting anecdote that helped the reader understand why my mother and I are so close.

LAUER: Perhaps surprisingly, maybe not surprisingly one of the subjects that's gotten the most attention in the last couple of days is what you write about Kanye West and what he said about you after Hurricane Katrina.

BUSH: Yeah.

LAUER: "George Bush doesn't care about black people." He, he clearly has heard the furor over that and he has read the headlines. He stopped by to see me yesterday.

BUSH: Oh really?

LAUER: And I want to play you a small portion of what he said because he seems to have changed his tone rather dramatically.

(Begin clip)

KANYE WEST: I would tell George Bush, in my moment of frustration, I didn't have the grounds to call him a racist. But I believe that in a situation of high emotion like that, we as human beings don't always choose the right words. And that's why I'm here-

(End clip)

LAUER: He seems to have regret and what's your reaction to that?

BUSH: I appreciate that. I, it wasn't just Kanye West who was talking like that during Katrina. I cited him as an example, I cited others in an example as well.

LAUER: Right.

BUSH: And you know, I appreciate that.

LAUER: But you called his comment "a low point" and one of the things you and I have spoken about a lot over our conversations over these past couple of weeks is your faith. Does your faith allow you to forgive Kanye West?

BUSH: Oh absolutely, of course it does. And I didn't, you know I'm not a hater, I didn't hate Kanye West. But I was talking about an environment in which people were willing to say things that, that hurt. And nobody wants to be called a racist, if, if, if, if in your heart you're, you believe in equality of race.


LAUER: You spend an entire chapter in the book talking about the financial meltdown-

BUSH: Right.

LAUER: -in the last year of your presidency. In that year, the country lost about 2.6 million jobs. The banking system nearly collapsed. The housing market did collapse and we fell into the deepest recession since the Great Depression. How much of the blame for that, should be laid at your feet and on your policies?

BUSH: Well I think a lot of the blame should be laid on, on a lot of people including my administration. Now in the book, I make it clear that we did recognize a looming problem and that is Fannie Mae and Freddie Mac with their implicit government guarantees were making risky investments. And therefore I called for the regulation of those two entities and was thwarted at every turn by powerful forces on Capitol Hill.  

LAUER: And yet some would say you didn't call for enough regulation in other areas that doomed the economy.

BUSH: Well I don't think this was a matter of lack of over-regulation or lack of regulation. It was a matter of poor judgment by, by Wall Street and others. And, but no question, the housing bubble was fueled by government policy and that is a result of people in Congress refusing to regulate Fannie and Freddie. So my conscience is clear when it came time to recognize an impending problem. Now-

LAUER: But back to the original question. How much of the blame do you deserve for that economic meltdown?

  BUSH: Well any time you're in power and there's a problem, you're gonna get blamed and I fully understand that, and I walk people through the reason why I used taxpayers' money to bail out Wall Street. And the lesson there is, is that I had to set aside an ideology - which was if you make a bad mistake you pay for it in the marketplace. And this, and the hardest thing for me was not whether or not blame was assigned. The hardest thing for me was to explain to hard working Americans why we were using their taxpayers' money-

LAUER: Right.

BUSH: -to prop up those who they were blaming for the crisis.

LAUER: While we're talking about taxpayers, there's a heated debate, right now over whether we should continue in this country with your tax policies.

BUSH: Yeah.

LAUER: They call them the Bush tax cuts. Give me your best argument for continuing those tax cuts.

BUSH: Well first of all, you know, it's too bad they call them the Bush tax cuts, they might have a better chance of being extended if they were the Lauer tax cuts.

(Laughter)

LAUER: Probably not gonna happen.

BUSH: Here's, here's the deal. Most new jobs are created by small businesses. Many small businesses pay tax at the individual income tax level because of how the are organized. For example, sub chapter S corporations or limited partnerships. Therefore, if you raise the top rate you're taxing job creators.

LAUER: But we've been living under that system for seven years now and we've seen incredibly slow growth in jobs. So why should we continue down that path?

BUSH: I don't accept that premise. For 53 or nearly 53 weeks we had consecutive job growth. The longest period in, one of the longest periods in economic history. You gotta remember, let me put this, put this in perspective. I come to office, there is a dotcom bubble burst. Then 9/11 comes and the country is in severe economic hardship. The tax cuts, in my judgment, stimulated an economic vitality and a lot of jobs were created. Now the question is, how do we create them? And part of the debate is should government try to create the jobs or should the private sector try to create the jobs. My argument is keeping taxes low will encourage the private sector to create jobs.

LAUER: In your book, you wrote, quote, "When I finished, when I entered politics I made a decision. I would confront problems, not pass them on to future generations," end quote. Let's talk about the deficit.

BUSH: Right.

LAUER: In the case of deficit, didn't you do the opposite, didn't you pass it along to a future generation?

BUSH: Actually if you look at the statistics, my deficit to GDP during my presidency was lower than Ronald Reagan's by half. Lower than my dad's. And only Bill Clinton among modern presidents, let me finish-

LAUER: Go ahead.

BUSH: My debt to GDP was the lowest or one of the lowest of modern presidents. My taxes to GDP was the lowest and my spending to GDP. Now I argued my fiscal record was strong, especially given the fact that we had to deal with recession and funding two wars necessary to protect the American people.

LAUER: But you were the only president since the Civil War who didn't raise taxes to pay for those wars. And you left office with a $10.7 trillion deficit, debt.

BUSH: No I think the way to look at it is the debt relative to the size of the economy. It's the only fair way to judge previous administrations to this, to my administration. And our debt to GDP was one of the lowest in modern history.

LAUER: Even some Republicans say that, that perhaps your fiscal policies gave birth to the Tea Party. Did you give birth to the Tea Party?

BUSH: I don't think I was that powerful. I think what gave birth to the Tea Party was severe frustrations in the political system in general. And no, again, I understand perceptions, the purpose of this book is to state reality. And I'm confident over time when people take an objective look at the fiscal record of my administration, they will have a better understanding of why I said I was proud of the fiscal record.

LAUER: Alan Greenspan, your Fed chairman, wrote a book and came out in 2007. In it he said, quote, "My biggest frustration remained the President's unwillingness to wield his veto against out of control spending."

BUSH: Well actually it's interesting you said that, because in 2007, I did veto bills and they were overridden quickly. I vetoed the farm bill which was overridden, I vetoed a public works bill which was overridden. Prior to that we were able to negotiate budget deals with Republican controlled Congress that actually, other than defense spending, was able to ratchet down spending and at the end, less than, than the rate of inflation.

LAUER: You wanted to be a uniter. Along came 9/11 and you did something that a lot of people thought was a real effort to unite. You reached out to the Muslim world-

BUSH: Right.

LAUER: -and you visited mosque and you said the following, quote, "The face of terror is not the true face of Islam" and you said, quote, "In our anger and emotion, our fellow Americans must treat each other with respect." You know there's a major controversy brewing here in New York City, downtown, where there's a proposed Islamic community center sited for just two blocks from Ground Zero. If I look at your words there, it makes it seem to me as if you're saying that the rights of Muslims should not be denied for the sake of the sorrow of others, is that fair?

BUSH: If I listened to what you're trying to rope me into, you're trying to get me to talk about this mosque issue.

(Laughter)

LAUER: Which is fair.

BUSH: Again, again.

LAUER: Why wouldn't - I know I tried the other day too, didn't I? Why-

BUSH: Yeah, because...

LAUER: Why wouldn't you speak out...

BUSH: Because there's gonna be-

LAUER: ...to calm a lot of rhetoric?

BUSH: Because there's a lot, there's a lot of events and a lot of opportunities for me to speak out over the next years and I have chosen not to. And the reason I've chosen not to is, I don't want do intrude on my successor's ability to get the job done. Inevitably if you were able to get me to answer this question, they will then compare that answer to what President Obama or other presidents might say on the issue. And I don't-

LAUER: Well then without saying whether they should build the community center or not, are you disappointed by the increase in anti-Muslim rhetoric in this country that we've seen...

BUSH: I think most Americans welcome freedom of religion and honor religions. I truly do. And the problem with the, the arena today is a few loud voices can dominate the discussion and I don't intend to be one of the voices in the discussion.

 —Geoffrey Dickens is the Senior News Analyst at the Media Research Center. You can follow him on Twitter here

Geoffrey Dickens
Geoffrey Dickens
Geoffrey Dickens is the Deputy Research Director at the Media Research Center.