How Herman Cain Missed the Biggest Recession of Our Era

Before the financial crisis, he spent months insisting the economy was fine. Then he embraced the bailout and even blamed Wall Street for the crash

Herman Cain speaking - Chris Keane Reuters - banner.jpg

In his pitch to voters, Herman Cain says that his CEO background and time on the federal reserve afford him a better understanding of the economy than D.C. politicians. But his public pronouncements dating back to 2006 show that he was blind to failings of the Bush Administration, dismissive of the impending recession, and wrong about its severity once he acknowledged it.

And when the financial crisis hit? He abandoned the free market principles he usually champions, supported the bailouts, and cheered when taxpayers purchased part ownership in banks. At times, he even "blamed Wall Street" for the crisis, acknowledging that it helped tank the economy.

Let's go back and examine reality as Herman Cain saw it from his perch as a syndicated columnist. One of the earliest columns available, published in the spring of 2006, asserts that President Bush and his leadership team "have generally worked on the right economic problems during his two terms." As that year's midterm elections came and went, Cain would repeatedly defend the strength of the Bush economy, and accuse Democrats of mendacity for questioning its strength. In an October 25 column titled The Sky Is Not Falling, for example, Cain ticked off a bunch of economic indicators, concluding, "The liberal rhetoric about the economy doesn't even approach the realm of 'reasonable people can disagree.' It is a flat-out lie."

Said Cain that November:

They spin false rhetoric about our steadily growing economy and the tax rate reductions that spurred our historic economic growth. The armchair presidents could find a fly in the soup on Da Vinci's "The Last Supper." Washington Post opinion columnist Sebastain Mallaby wrote on September 4, "Economic growth no longer seems to help the majority of workers; the proceeds flow to the top fifth or so of the workforce, and the top within the top has done especially handsomely." Mr. Mallaby and others conveniently overlook the fact that more than 50 percent of workers have some level of investment directly impacted by the economy.

On New Year's Day 2007, Cain noted that home ownership was at an all time high, dismissed the notion that wage growth was only helping the rich, and made these predictions about the coming year: "This vibrant economy will give some workers a boost to their company-sponsored retirement plan in the New Year, and it will give some workers an opportunity to participate in a retirement plan for the first time. Low unemployment means nearly everyone who chooses to work will have a job."
 
Skip ahead to 2008.

On January 21 of that year, Cain again denounced those who questioned the strength of the economy. Dismissing headlines including "New housing starts down 25 percent in 2007" and "Job picture gloomy, recession feared," Cain wrote:

With exaggerated fears of an immediate recession being proclaimed by the media, the players are the same, the movie plots are the same, the lines are the same, the chase scene near the end will be the same...
Admittedly, there are some components of the economy that are experiencing negative growth versus a year ago, such as construction, real estate and related businesses. And yes, there are some people who are facing mortgage foreclosures due to poor lending practices by lenders on the one hand, and poor spending practices by some consumers on the other. But this is no time to panic, overreact or throw out the baby with the bath water. We are in an economic correction, not an economic recession.

Come March, Cain started to acknowledge the worsening economy, but blamed it partly on Democratic rhetoric. "The media's factually unsubstantiated claims of an impending recession have been going on for over a year," he wrote. "There is no doubt that we are in an economic correction, which is being caused in part by self-inflicted economic turbulence coming from home mortgage issues, a slowdown in real estate and construction, excessive federal spending and consistent promises by Democratic presidential candidates and the Democratic leaders in Congress to raise taxes."

His policy prescription?

"Let the Federal Reserve do its job of controlling inflation," he suggested, "hope that Congress does not pass any new trade barriers, stop the increase in federal spending, and pray that the Democrats in Congress will not raise taxes."

Cain would write a lot about the economy in ensuing months.

March 31, 2008: "Our $14 trillion economy is fragile but not in a recession, and it is certainly not in shambles like our spending addiction."

April 7, 2008: "The mainstream media, Democratic leaders in Congress, Hillary Clinton and Barack Obama, and negative economic elites have talked employers into an 'employment recession'... Some of the negative job growth is undoubtedly due to issues in the housing, construction, mortgage and transportation industries. But this writer believes that a major portion of the job losses are due to media pessimism, and employers who have swallowed the negative outlook."

In that same column, Cain noted that "Barack Obama has suggested that we need another pitiful stimulus package. It's pitiful because if people actually get those checks for a few hundred dollars, it might be enough to cover the increase in their annual gasoline and energy bills due to the increase of the price of oil."

April 21, 2008: "...the current six-year economic expansion dates from November 2001 through the present time, despite some recent slowing. This was the same year George W. Bush took office, so how could these be failed economic policies?"

Presented by

Conor Friedersdorf is a staff writer at The Atlantic, where he focuses on politics and national affairs. He lives in Venice, California, and is the founding editor of The Best of Journalism, a newsletter devoted to exceptional nonfiction.

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