Bush served loyally as vice president under Reagan, but it’s fair to say he was not an apostle of Reaganomics. His view was more pragmatic, like Nixon’s, but without Nixon’s iconoclastic boldness. During the 1980 Republican primaries, Bush famously characterized Reagan’s supply side rhetoric as “voodoo economics,” a phrase Democrats loved to repeat. Indeed, as President, he faced two kinds of radioactive fallout from the Reagan regime. The first problem was fiscal — to reduce the mushrooming federal deficit, which ran over $200 billion in 1990. Bush reached a deal with congressional Democrats in 1990 to increase taxes, violating his cinematic campaign promise, “Read my lips: no new taxes.” The second contamination was the collapse of hundreds of federal savings and loan associations, partly as a result of poorly guided deregulation, along with many other factors. This implosion led to a massive federal bailout, costing taxpayers about $125 billion.
In sum, Bush’s economic policies were moderate, compromising and boring, and there is something to be said for each of these qualities. Bold action on the economy — take Kennedy’s attack on the U.S. Steel industry (1962), or Nixon’s imposition of a range of temporary wage and price controls (1971), or even perhaps some of the Fed’s and Treasury Department’s recent bold measures — often leads to seriously detrimental unintended consequences.