The big strategy for Democrats in the midterms is to run against George W. Bush, even though he hasn’t been President for almost two years.  Nancy Pelosi and Harry Reid hope to use a little misdirection away from their failed economic policies by claiming that Bush policies were so bad that Democrats couldn’t fix them.  However, the centerpiece of Bush’s economic policies were the 2001 and 2003 tax cuts that will expire at the end of the year, and now Democrats want to extend at least some of them, and perhaps all of them, in order to keep from making the economic stagnation into a depression.

If they do, how can they run on the Blame Bush banner?  Even Paul Begala wonders at the contortions that will take:

Democrats are undercutting their campaign message by condemning Republican economic policies while calling for the extension of Bush-era tax cuts.

“It’s hard to say the Republican economic policies were bad, [and] then continue them,” Paul Begala, Democratic strategist and former advisor to President Clinton, told The Hill. “That is a bit of a mixed message.” ….

[T]here’s growing momentum within the party to extend cuts on those with higher incomes too given the stubborn recession. Moody’s Analytics economist Mark Zandi, who has advised Democrats on the economy, this week said congressional leaders should extend all of the tax cuts to reduce the risk of a double-dip recession.

Even extending only the tax cuts for the middle class undercuts the Democratic argument a bit, said Democratic strategist Douglas Schoen, by making it difficult for liberal leaders to say Bush’s tax policies had a toxic affect on the economy.

“If the whole campaign is based on blasting Bush, and Bush for giving away too much to the rich, it’s pretty hard to say that Bush was right [about the middle-class tax cuts],” Schoen said.

The Bush tax cuts sparked the last recovery and rebound from unemployment, which hit full throttle in 2004.  Even before it had taken effect, though, unemployment never got out of the mid-6s.  The investor class knew that Bush had structured his economic policies for growth rather than massive expansion of regulation and uncertainty.

Allowing the tax cuts to expire would have the opposite effect, and even Democrats seem to realize that, albeit belatedly.  Socking the middle class with a tax hike through inaction wouldn’t actually hit until well after the election, but it might turn 2012 into something very much like the midterms this year, whereas Democrats hope that anger will have receded by the presidential election.  Even extending the middle-class tax cuts may not be enough to create any new jobs, though, as investors will simply avoid income-producing activities in the short run.  That means no growth, no expansion, and no massive creation of jobs.

And that means a lot fewer Democrats elected to office across the nation.

So Democrats have a conundrum.  If they agree to extend the Bush tax cuts — the heart of Bush’s economic policies, which only have an expiration date in the first place because Democrats threatened to filibuster them otherwise — they’re endorsing Bush’s economic policies.  If they don’t extend them, Barack Obama and the Democrats still left in Congress will almost certainly create a double-dip recession that will threaten to make their party radioactive for the next few election cycles.  Perhaps they should have thought their 2010 strategy of demonizing Bush through a little more.