Maybe we have it all backwards.

Here's the basic story President Obama wants to tell. The last eight years were an economic disaster because President Bush and the Republicans ignored necessary government regulations and "investments." The economic crisis has discredited "market fundamentalism," as some liberals call it. Now, thanks to Bush's hands-off approach to the economy, Obama has no choice but to get government much more involved. "To kick these problems down the road for another four years or eight years," Obama sighs, "would be to continue the same irresponsibility that led us to this point."

Indeed, Obama doesn't feel compelled to merely remedy the mistakes of his predecessor; he believes it is vital that we renew the New Deal-style economic policies we strayed from when Ronald Reagan was elected. Not only must we pour vast sums of money into highways and mass transit, along with social insurance programs, we need to "reset" the relationship between government and big business. Just this week, the administration announced that it wants new powers to control not just banks, but other financial institutions and businesses that are "too big to fail."

What if they're looking at the economy through the wrong end of the telescope? For starters, Bush was hardly a laissez-faire president who ignored Obama's oft-stated domestic priorities. Sure, Bush was more laissez-faire than Obama. But that's not a very high bar.

Education spending under Bush rose 58 percent faster than inflation. Medicare spending, thanks largely to Bush's prescription drug benefit (the largest expansion in entitlements since the Great Society), went up 51 percent during the Bush years. Spending on health research and regulation rose 55 percent. Spending on highways and mass transit went up by 22 percent.

Maybe that's too little in Obama's eyes, but it hardly validates Obama's fictions about the last eight years. Let us also recall that Bush's Wall Street bailout efforts were largely indistinguishable from Obama's. Indeed, Obama's treasury secretary, Timothy Geithner, was the co-pilot for Bush's treasury secretary, Hank Paulson. Now that Geithner's in the captain's chair, there haven't been many course corrections. Continued...