Ground control to Mr. Bush: What planet are you living on? Today, tens of millions of Americans are experiencing a declining standard of living and yet you continue to insist that our economy is “strong” and “robust.” Rather than acknowledge the economic anxieties of American workers, you insist that they don’t know how good they have it. Since you have… return to article
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Reader Comments (6)Page 1 of 1 pagesBernie Sanders once again tells it like it is.
Interestingly excerpts of Alan Greenspan’s new book have hit the newspapers just today. In it, Greenspan also tells it like it is on Bush. He describes Bush as a man driven more by ideology and the desire to fulfill campaign promises made in 2000, incurious about the effects of his economic policy, and an administration incapable of executing policy.
Greenspan, a Libertarian Republican, also pans the Republicans in Washington, They swapped principle for power. They ended up with neither. They deserved to lose in the 2006 election, when they lost control of the House and Senate. And more on Bush from Greenspan, “he was never willing to contain spending or veto bills that drove the country into deeper and deeper deficits, as Congress abandoned rules that required that the cost of tax cuts be offset by savings elsewhere.”
When Sanders accurately wonders about who’s economics Bush cares about (the rich) and Greenspan describes Bush as incurious about economics, this is certainly the history Bush will be assigned. He cared about the rich and then stopped caring. All the numbers prove it.
And Bush’s version of trickle-down economics which is quickly described as “borrow the money and hand it to the rich” is coming home to roost as the housing market is in the beginnings of imploding led mainly by the greed of the mortgage industry and Wall Street, elites who once again are led by their ideal of short term riches over long term economic health.
Posted by Jon B on Sep 15, 2007 at 5:59 AM Jon B,
The current economic mess has been building for at least two decades. The tech bubble and the housing bubble are both products of the Greenspan Blather era. Untill a very short time ago he denied the existance of either.
Now that the entire world has been exposed to the effects of unfettered creative accounting he is passing the buck to those too ignorant and too uninterested to have prevented it. (Both apply to both Bushes.)
Americans have been duped into reckless spending by individuals, cities, states and most agressively natrional leaders.
The congress, big business, and several administrations have established a new era in which the middle class has been stuck with the bills for the overindulgence of all.
Government measures such as CPI, GDP, employment/unemployment data have been scammed and skewed for so long we must go back to the 1970s or before in order to get a true picture of what has happened. (Available at the US Census Burerau website for anyone willing to dig.)
The media’s increased laziness has contributed to the idea that someone (the Fed) can actually control the economy Pure nonsense!
We (and the world) are in for an extreme readjustment of the value of nearly everything lifestyles, stocks, wages, commodities, and most obvious real estate.
The US will feel the brunt of the reversion to the mean due to the continued falling of our currency. The price of gasoline is only the beginning.
At best we can expect recession next best depression worst of all resorting to the cure of the last time.... a major war.
Posted by whattheheck on Sep 16, 2007 at 6:53 AM Whattheheck,
I won’t disagree with too much of what you said, but…
Greenspan did warn against the tech bubble, the irrational exuberance speech. But I’m not so hard on him because he really didn’t have much power on the economy, raise and lower interest rates basically was his only tool. Besides, capitalist economics isn’t a science and can’t really be controlled, only manipulated by those who can afford to, the super-rich.
Lower interest rates did allow many people to own homes they never could have with higher rates. The problem comes with Congress, The White House and regulatory agencies..that’s where both the tech bubble and real estate boom (and the savings and loan debacle of the 1980s) could put most of the blame. They loosen the rules and the institutions (such as Wall Street banks or mortgage lenders) grab that inch and stretch it a mile. Regulatory agencies (such as the SEC) had been pared to the bone and couldn’t do their job sufficiently. Or they were encouraged to look the other way.
American economics is repeatable in one aspect for certain, forgetfulness. Whenever the cycle goes up, people forget that it goes down. The irrational idea becomes that this time it will be different and that the economy has been solved. Even an amateur economist like me was able to predict the tech bubble, the housing boom/bust and the rise in gold prices of the last decade. It doesn’t take a genius to see the trends go up and know that they will go down someday or vice versa. The talent is predicting exactly when.
Posted by Jon B on Sep 18, 2007 at 5:49 AM Whatheheck,
To continue a bit…
So much of our economics is related and cause and effect from one thing spills into others. Passing NAFTA and other free trade agreements have caused tremendous outsourcing and disruptions to other countries. We have the “Mexican problem” because of so much displacement of Mexican and Central American agricultural workers. We started beating them in farm prices, so much so that American corn has begun to dominate Mexico’s domestic sales. And here’s the kicker, the workers come here as illegals to pick our fruits and vegetables. We put them out of jobs to come here to do the same job.
Our huge trade imbalance with China is a trade-off. We get cheaply priced goods, China gets our dollars and then buys government treasuries. They are making more money off of our debt that our government refuses to address (hell, even acknowledge). Yet, China doesn’t have much control over us. They couldn’t yank their ownership without causing our dollar to weaken more, thereby reducing the trade imbalance they need for their own economy (because we couldn’t afford so many goods from China if our own economy sinks). It’s a strange symbiotic relationship that can’t last forever. Something will cause it to break, possibly a large recession in the US.
In the late 1990s a Republican Congress passed and Clinton signed a law that rescinded a depression era law that separated banks and investment firms, it didn’t take but a few years to watch the fooling around on Wall Street eventually screw investors.
They deregulated the energy industry, we got Enron. Deregulated telecommunications, we got Worldcom. These are the things that brought out the dotcom bust. Enron and Worldcom were not internet companies, they weren’t dot.anything, but they helped bring down and expose losing internet companies. And a bare boned SEC didn’t have enough people to even keep an eye out for corruption.
There was a time in the US that we had family incomes relatively fair. A family could make it on one income and own a home. These days we have both adults working and sometimes even two jobs per person. Americans now work more hours than any other country but our wages and benefits are stagnant, even reversing. But that’s for most Americans. The upper percentile makes ungodly amounts now. They’ve gotten lowered tax rates repeatedly. At one time the progressive tax rate was 90% of earnings at a certain dollar, no more. I think it’s 35% now. And somehow this trickledown tax rate has forced most Americans to work more. And the rich of course can take advantage of tax free havens in Belize, etc.
Posted by Jon B on Sep 18, 2007 at 7:31 AM continued…
None of the above was from Greenspan, although he probably believed libertarian economic ideology and that today’s middle class would be swimming in cash by now.
Greenspan did play a part in saving the economy in 1998 when we had the Long Term Capital Management meltdown. He played a part in getting a bailout for that investment company which if allowed to play out would have sent the US and probably the world into a deep recession. But that’s what usually happens in American economics. When the big players make mistakes, we bail them out. When you or I get in trouble we have to go bankrupt. A corporate bankruptcy these days is just a troublesome deal to get through and then it’s back to business. That’s the way it has to be because too many workers get screwed if corporations were forced to disappear when they are found to be corrupt.
Which brings us to another bubble. CEO and executive pay is way over the top historically. That won’t last, but the economy probably won’t be what burst that bubble, it will have to be from Congress. But that won’t happen until Americans demand it or vote in representatives who will cap salaries. And that demand won’t probably happen until we have a bad economy, which I’m thinking we are certainly due for.
So many things are going to come due. Most people don’t know that many of these corporate bankruptcies over the last decade or so have moved their pension fund obligations to the federal government, the Pension Benefits Guaranty Corp. This agency is in debt by billions. All the airlines that went bankrupt did this, so did steel companies. And the PBGC doesn’t have the same obligation as the corporations did, it’s pennies on the dollar to recipients.
Peak oil is real. World production won’t be able to match world demand and we are in the beginnings of it today.
The US economy is all about live-for-today both at the micro and macro level. That can’t last too much longer. We can’t afford everything. We can’t fight wars, Marshall Plan cities (New Orleans), fund baby boomer retirements, pay more for oil, save peoples homes, save Wall Street, among the major problems to face, and expect our government to be stable.
One lesson from history...no nation state/empire has ever been the top dog forever. Why should we expect that the US will somehow evade that? We are going to spend our way off the top of the heap of empires. Empires trend, they rise, they fall. It’s not if, but when.
Posted by Jon B on Sep 18, 2007 at 7:32 AM JonB,
“"Lower interest rates did allow many people to own homes they never could have with higher rates.” True, but many of them would be better off renting. Just as we can’t all afford a new car not all can afford a house.
When my son applied for a mortgage three years ago I went along. It had been forty years since my wife and I bought our house what a difference.
Even though we were both working and were able to keep up the payments they would not count her income and my father cosigned or we would not have gotten the loan.This time the agent urged my son to borrow more why? His commission was based on the loan amount. The lack of oversight by government agencies and happy talk by TV gurus encouraged people to go for risky things like adjustable rates and refinancing to use their equity on other purchases. People need to think for themselves NOBODY cares about your money but you.
The China/U.S. exchange has been mutually beneficial, but only to a point. Unfortunately we in the middle have paid dearly for those “cheap” goods. Mostly it will be paid by future generations, but payment is already starting.
You’ve pretty well covered the wide range of our economic shenanigans. I have a low regard for Greenspan even more so after reading the Bob Woodward book, “Maestro.” Greenspan is a maestro of double speak. The media take that as wisdom and the Wall St. took advantage of his baloney to suck up big commissions and bonuses. The Fed is not able to control anything, but has kept the fairy tale working longer than is good for us.
Events like Long Term Capital and now the sub-prime Ponzy scheme happened due to a lack of integrity within the agencies trusted with the responsibility of regulating congress is the primary culprit, along with those who rated junk as better than what it was and those who allowed the packaging with genuine AAA rated paper.
I can’t remember his name, but I think it was a Nixon advisor who said, “If something can’t go on forever, it will certainly end.”
The End is Near.
---------------------
P.S. I have been buying energy and gold ETF funds to protect against inflation and Treasuries to protect against deflation. Not a way to get rich, but they pretty well balance each other whatever happens next.
Posted by whattheheck on Sep 18, 2007 at 1:08 PM Page 1 of 1 pages -
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