TIME TO REVIEW HOW WE FELL INTO THE '90-91 RECESSION

The Commander in Chief of Desert Storm, George Herbert Walker Bush, has seen his poll numbers rise to stratospheric heights owing to his masterful conduct of world affairs. But poll numbers on his conduct of economic policy now show a majority of Americans disapproving the President's conduct of this where-we-live economic measurement. What follows is a review of last year's comments on this subject, as the preventable disaster we stumbled into unfolded.

One week after Mr. Bush's late June, 1990 repudiation of the '88 campaign's most memorable line his "no-new-taxes" pledge this columnist let out an anguished cry at the betrayal. In that July, 1990 column, I wrote:

"... The President's flip-flop is terrible economics; it's even worse politics ..." by way of warning that tax hikes would push a weakening economy into a full-blown recession. Economists have since officially informed us that the recession we're still struggling to climb out of began that very month.

In late September of last year I made it to Washington, D.C. for a weekend's visit. Upon my return, the following comments appeared here, one year ago this week:

"... Sadly, it's true. Returning from a weekend spent in Washington, D.C., I got a chance to see this year's Beltway fantasy game up close. It's called the Budget Summit. ...

"Meanwhile, important ironies get ignored as we all get sucked into the maw of yet another Beltway Deficit Reduction con game. Let's mention a few.

"Irony #1: "By not proceeding according to its own schedule laid down in its own statutes, Congress has been in violation of itsown budget law since May. And this isn't the first year; we have a recidivist Congress. Where are the squads of special prosecutors to start putting Members in jail?

"Irony #2: "Let's let this one be related by Rep. Dick Armey of Texas, a remarkably effective, three-term GOP legislator:

"`When the budget summit started, the President clearly had a higher standing among the American people than anyone else. By calling a summit, all he's done is elevate people scarcely known outside their districts to the same level as himself.

"`Then he turned around and appointed [House Majority Leader] Dick Gephardt to chair the thing. To me what this did was define a process that favored the Democrats and sacrifice the only advantage we had: the President's prestige.'

"... George Bush is clearly losing control of the American economy. The markets are telling him so ...."

Later that same month of October, 1990, when the first "Budget Agreement" collapsed, I offered these comments:

"... This weekend, George Bush sits amid the ruins of a budget train wreck.

"... This is a disaster for America ... It is mostly of his own making. The nice handiwork of his minions, to whom he entrusted a Budget Summit he never should have called, it is the direct result of having abandoned the GOP's strong hand of opposition to higher taxes and the huge government they fuel. Everywhere, one can see the fine hand of Budget Director Dick Darman, a man who gives every indication of being too clever by half, the very genius who talked the President into abandoning his tax pledge ... What we have in the Bush administration are people who never understood the Reagan Revolution, or the real meaning of its reach into Middle American precincts that conventional Republicans could never touch.

"Mr. Bush's party and our nation's economy meaning all of us are about to pay a high price for having repudiated the successful supply-side economics of Ronald Reagan, and turned domestic policy over to defeated foes Mitchell, Foley and Gephardt. A recession suits the latter three just fine, as a prelude to winning more power this year and possibly defeating Mr. Bush himself two years hence.

"... Mr. Bush will either turn sharply away from his recent course, ... or it'll soon be, `Welcome back, malaise.'"

12/24/90: "... Quick: has anyone seen a reference, in any TV news report, to the indisputable fact that under the `Deficit Reduction Act' just agreed to, Washington's take of the national wealth will be $100 billion higher than last year?"

An "open letter" to Missouri Sen. Jack Danforth, published in this space 12/31/91:

"... Your visit to Cape followed by just a few days the completion of the debacle that has come to be known as `the federal budget process' ...

"I am one who, despite a well-honed aversion to tax hikes, believes that we need higher fuel taxes, in Missouri and perhaps nationally for the specific and strictly limited purpose of building roads and bridges. I don't think we're investing enough in what the public policy types call our infrastructure ...

"But we all know that the new federal gas tax is absolutely not for roads and bridges; it will not go into the Highway Trust Fund; it's for something Washington calls `deficit reduction.' And just as ordinary Missourians of every political persuasion support building roads and bridges with highway user fee money, they are overwhelmingly opposed to this `budget reform', or `deficit reduction' package, believing, with some historical justification, that it's another inside-the-Beltway scam ...

"I do not believe that either you or Kit Bond could have been reelected mouthing platitudes about how `we must govern', had you faced the voters days or weeks after voting for a package so full of noxious provisions. And one that, despite claims to the contrary, will not `reduce' the `deficit'; at best, it will merely restrain what would other wise be even faster growth in federal spending."

I wrapped up that portion of the open letter with this forecast: "My own guess is that deficits will now explode ..."

Last fall, Budget Director Darman and President Bush told us we were getting "$500 billion dollars of deficit reduction" over the next five budget years. By January, Darman admitted he was wrong by $319 billion; by July of this year, any remaining "savings" in Darman's forecast had disappeared. A recession-shrunken economy has caused the deficit to balloon to what, $348 billion, on its way to $400 billion?

On Friday morning, a defensive President Bush took to a White House podium to hail a pathetic 0.01 percent drop in unemployment, from 6.8 to 6.7 percent. He also finds himself on the defensive in a lose-lose debate on whether, and how much, to extend unemployment benefits for those whose benefits have expired.

Was my phrase "inside-the-Beltway scam" too strong to describe last fall's Budget Summit?

In Tuesday's edition: How White House Budget Director Dick Darman intentionally cooked the budget numbers to manipulate the whole process.