Best of the Week
Most Popular
1. Five Charts That Show We Are on the Brink of an Unthinkable Financial Crisis- John_Mauldin
2.Bitcoin Parabolic Mania - Zeal_LLC
3.Bitcoin Doesn’t Exist – 2 - Raul_I_Meijer
4.Best Time / Month of Year to BUY a USED Car is DECEMBER, UK Analysis - Nadeem_Walayat
5.Labour Sheffield City Council Election Panic Could Prompt Suspension of Tree Felling's Private Security - N_Walayat
6.War on Gold Intensifies: It Betrays the Elitists’ Panic and Augurs Their Coming Defeat Part2 - Stewart_Dougherty
7.How High Will Gold Go? - Harry_Dent
8.Bitcoin Doesn’t Exist – Forks and Mad Max - Raul_I_Meijer
9.UK Stagflation Risk As Inflation Hits 3.1% and House Prices Fall - GoldCore
10.New EU Rules For Cross-Border Cash, Gold Bullion Movements - GoldCore
Last 7 days
Bond Market Bear Creating Gold Bull Market - 19th Jan 18
Gold Stocks GDX $25 Breakout on Earnings - 19th Jan 18
SPX is Higher But No Breakout - 19th Jan 18
Game Changer for Bitcoin - 19th Jan 18
Upside Risk for Gold in 2018 - 19th Jan 18
Money Minute - A 60-second snapshot of the UK Economy - 19th Jan 18
Discovery Sport Real MPG Fuel Economy Vs Land Rover 53.3 MPG Sales Pitch - 19th Jan 18
For Americans Buying Gold and Silver: Still a Big U.S. Pricing Advantage - 19th Jan 18
5 Maps And Charts That Predict Geopolitical Trends In 2018 - 19th Jan 18
North Korean Quagmire: Part 2. Bombing, Nuclear Threats, and Resolution - 19th Jan 18
Complete Guide On Forex Trading Market - 19th Jan 18
Bitcoin Crash Sees Flight To Physical Gold Coins and Bars - 18th Jan 18
The Interest Rates Are What Matter In This Market - 18th Jan 18
Crude Oil Sweat, Blood and Tears - 18th Jan 18
Land Rover Discovery Sport - Week 3 HSE Black Test Review - 18th Jan 18
The North Korea Quagmire: Part 1, A Contest of Colonialism and Communism - 18th Jan 18
Understand Currency Trade and Make Plenty of Money - 18th Jan 18
Bitcoin Price Crash Below $10,000. What's Next? We have answers… - 18th Jan 18
How to Trade Gold During Second Half of January, Daily Cycle Prediction - 18th Jan 18
More U.S. States Are Knocking Down Gold & Silver Barriers - 18th Jan 18
5 Economic Predictions for 2018 - 18th Jan 18
Land Rover Discovery Sport - What You Need to Know Before Buying - Owning Week 2 - 17th Jan 18
Bitcoin and Stock Prices, Both Symptoms of Speculative Extremes! - 17th Jan 18
So That’s What Stock Market Volatility Looks Like - 17th Jan 18
Tips On Choosing the Right Forex Dealer - 17th Jan 18
Crude Oil is Starting 2018 Strong but there's Undeniable Risk to the Downside - 16th Jan 18
SPX, NDX, INDU and RUT Stock Indices all at Resistance Levels - 16th Jan 18
Silver Prices To Surge – JP Morgan Has Acquired A “Massive Quantity of Physical Silver” - 16th Jan 18
Carillion Bankruptcy and the PFI Sector Spiraling Costs Crisis, Amey, G4S, Balfour Beatty, Serco.... - 16th Jan 18
Artificial Intelligence - Extermination of Humanity - 16th Jan 18
Carillion Goes Bust, as Government Refuses to Bailout PFI Contractors Debt and Pensions Liabilities - 15th Jan 18
What Really Happens in Iran?  - 15th Jan 18
Stock Market Near an Intermediate Top? - 15th Jan 18
The Key Economic Indicator You Should Watch in 2018 - 15th Jan 18
London Property Market Crash Looms As Prices Drop To 2 1/2 Year Low - 15th Jan 18
Some Fascinating Stock Market Fibonacci Relationships... - 15th Jan 18
How to Know If This Stock Market Rally Will Continue for Two More Months? - 14th Jan 18
Everything SMIGGLE from Pencil Cases to Water Bottles, Pens and Springs! - 14th Jan 18
Land Rover Discovery Sport Very Bad MPG Fuel Economy! Real Owner's Review - 14th Jan 18
Gold Miners’ Status Updated - 13th Jan 18
Gold And Silver – Review of Annual, Qrtly, Monthly, Weekly Charts. Reality v Sentiment - 13th Jan 18
Gold GLD ETF Update.. Bear Market Reversal Watch - 13th Jan 18
Stock Market Leadership In 2018 To Come From Oil & Gas - 13th Jan 18
Stock Market Primed for a Reversal - 13th Jan 18
Live Trading Webinar: Discover 3 High-Confidence Trade Set-Ups - 13th Jan 18
Optimum Entry Point for Gold and Silver Stocks - 12th Jan 18
Stock Selloffs Great for Gold - 12th Jan 18
These 3 Facts Show Gold Is Set to Surge in 2018 - 12th Jan 18
How China is Locking Up Critical Resources in the US’s Own Backyard - 12th Jan 18
Stock futures are struggling. May reverse Today - 12th Jan 18
Three Surprising Places You See Cryptocurrency - 12th Jan 18
Semi Seconductor Stocks Canary Still Chirping, But He’s Gonna Croak in 2018 - 12th Jan 18
Land Rover Discovery Sport Panoramic Sunroof Questions Answered - 12th Jan 18
Information About Trading With Alpari And Its Advantages - 12th Jan 18

Market Oracle FREE Newsletter

6 Critical Money Making Rules

President Bush Has been a Disaster for the US Economy

Politics / US Politics Jul 16, 2008 - 07:01 PM GMT

By: Walter_Brasch

Politics
Best Financial Markets Analysis ArticleGeorge W. Bush looked into the TV camera, Tuesday morning [July 15] and tried to assuage the fears of about 300 million Americans who believed they were in the middle of a Recession.

“The economy is growing,” said the President. “Productivity is high,” he told us. “Trade's up. People are working,” he said. In the Bush White House, the “R Word” is just a myth. Of course, the man who once wanted to be known as the Compassionate Conservative did say he knew “It's been a difficult time for many American families.”


“Difficult” doesn't even begin to describe what has happened to Americans the past seven years.

Within hours of the President's speech, a less optimistic Ben Bernanke, chair of the Federal Reserve, told the Senate Banking Committee that inflation is high and “seems likely to move temporarily higher in the near term.” In sworn testimony, he told the senators that “Many financial markets and institutions remain under considerable stress, in part because of the outlook for the economy and thus for credit quality, remains uncertain.” Market Watch reports that over the past year, “ inflation at the wholesale level gained 9.2%— the largest year-over-year gain since June 1981.”

On the day that the President assuaged and the Federal Reserve chairman testified, General Motors announced it would freeze job hirings in several areas, lay off salaried workers, suspend shareholder dividends, and borrow up to $3 billion. Six weeks earlier, GM announced it was closing four plants; on the day the President spoke, GM announced four more plant closings. The nation's largest corporation, which saw a 16 percent sales decline in the first half of the year, announced that it was giving retired workers a slight pension increase but was cutting health care benefits.

About 8.5 million Americans actively seeking work are unemployed, an increase of about 21.4 percent over one year ago, according to the Bureau of Labor Statistics (BLS). The unemployment rate of 5.5 percent is up from 4.6 percent a year ago. More important, about 1.5 million of the 8.5 million unemployed have been unemployed at least six months, a 37 percent increase over the past year, according to the BLS. Not included in the numbers are the “1.6 million people who are ‘marginally attached' to the workforce, who had looked for work in the previous 12 months, but not in the last month,” according to Andre Damon of Global Research. Damon also reports that the BLS data does not include about 420,000 “‘discouraged workers', who had given up looking for work because they think that there is no work available.”

Work is available in dozens of other countries, where American companies seeking to “maximize the bottom line” have been outsourcing jobs for years. About 14 million American jobs are going to be outsourced in the next four years, according to a report issued by the University of California at Berkeley. Short-sighted and greedy, these CEOs and their boards believe child labor and wages that can dip below $1 an hour is just another acceptable business practice. The “Made in America” label is now becoming as extinct as corporate morality.

Americans who have been using credit cards to survive the Recession and have now reached their credit limit can raise their limit or sometimes reduce their payments or rate. All they have to do is call a credit card agency's toll-free number, which is answered by someone at a call center in India. Those same call centers are also telemarketing Americans to get into even more debt by getting credit cards.

In a true “global economy,” as many now euphemistically refer to outsourcing, persons having trouble with their computers assembled from parts made in Mexico and several Asian countries can now call technicians in India for assistance.

Book and magazine publishers have been outsourcing art, design, editing, and printing overseas. Even newspapers have figured out how to cut even more costs while driving up profits. The Orange County (Calif.) Register , which laid off 90 persons in 2007, outsourced copyediting and page design to journalists in India. The Modesto (Calif.) Bee and Sacramento Bee have outsourced most of their advertising design departments to India.

For Americans who have jobs, getting to them is more expensive. It makes no difference if the worker drives or takes public transportation, the rising cost of oil has pushed Americans into a crisis. Gas prices rose more than 25 percent in the past year, to more than $4 by July 1; diesel prices are up more than 30 percent to more than $5. The higher fuel costs affect almost every service and industry from home heating to food production and road repair.

Flushed with an inflated housing boom, banks and mortgage companies had begun issuing mortgages, usually with excessive fees and high interest rates, to just about anyone with a pulse. The weaker the credit rating, the higher the fees and interest. Even if the economy was healthy, there would have been several hundred thousand defaults. By the end of 2007, about 2.5 million mortgages were in default, almost 40 percent higher than one year earlier. Attached to the problem is that many new homeowners bought houses at inflated prices, assured by lending companies that housing prices would continue to rise, are making monthly payments that put them at financial risk, and are now watching the value of their houses decline.

Foreclosures and the Recession have driven down housing prices throughout the country. In 20 major American cities, house prices declined about 15 percent, according to the Case-Shiller index of housing prices. Prices declined by 25 percent in Las Vegas, Miami, and Phoenix, according to Case-Shiller. In California, the median price of houses declined by 35 percent over last year, according to the California Association of Realtors.

Monday morning, the day before the President's speech, hundreds of Americans stood in line at the 33 Southern California branches of IndyMac Bank, now renamed Indymac Federal Bank, to withdraw what they hoped was all of their money. Over 11 days, customers had withdrawn about $1.3 billion, amid rumors that the bank was failing. The previous Friday, federal regulators seized the bank, once one of the nation's largest mortgage lenders. Last year, the bank lost $615 million; the books bled red another $184 million the first three months of this year. The Federal Deposit Insurance Corp.(FDIC) guarantees each individual account to $100,000, joint accounts to $200,000, and retirement accounts to $250,000. Those with less knew they would get all of their money. For those with more, some were just hoping to recover 50 cents on the dollar. The cost to the FDIC is expected to be $4–8 billion. IndyMac was the fifth bank to fail in the previous six months.

Also failing were the Federal National Mortgage Association (better known as Fannie Mae) and the Federal Home Loan Mortgage Corp. (better known as Freddie Mac). The quasi-governmental agencies either own the loans or guarantee loans for almost half of the nation's $11 trillion in mortgages. But, with more homeowners buying houses they couldn't afford and now being subjected to rising costs in almost every area, combined with higher unemployment, both Fannie Mae and Freddie Mac faced collapse, their stock value freefalling about 90 percent in the past year. To keep the two agencies from failing, which would undoubtedly throw the nation into a deeper Recession that could dive into a Depression, the Federal Reserve announced it would issue low-cost loans of up to $15 billion.

While 15 billion taxpayer dollars may seem significant, it is only about 9 percent of the $168 billion Congress appropriated for the war this year. President Bush, Vice-President Cheney, and their advisors were vigorous in demanding the U.S. go to war in Iraq and vigorous in demanding massive funding for that war, which may now cost more than $1 trillion.

President Bush did acknowledge that the economy wasn't “as good as we'd like, and to the extent that we'll find weaknesses, we'll move.” As domestic problems piled up the past few years, much caused by a diversion of the budget and assets to Iraq, it seemed that the Bush–Cheney Administration moved on domestic policies at the speed of a glacier.

Not receiving much help are the 47 million Americans who don't have medical insurance, mostly because they can't afford the premiums, and the 3.5 million homeless, most of whom once had homes and jobs but are now living in their cars or makeshift shelters. About one-fourth of the homeless are veterans; slightly more than one-third of the homeless are children.

In 1992, Bill Clinton and Al Gore campaigned against President George H.W. Bush on the slogan, “It's the economy, Stupid.” The politics of that election came down to asking Americans if they were better off under that President Bush after four years than they were when his presidency began. Four presidential terms later, after eight years of a rising economy under President Clinton, it's the economy—not the war, the attack upon civil liberties, the destruction of the environment, or any of a few dozen other destructive policies—that may be what finally scuttles this Bush's legacy.

By Walter M Brasch PhD
http://www.walterbrasch.com

Copyright 2008 Walter M Brasch
Walter Brasch is a university journalism professor, syndicated columnist, and author of 17 books. His current books are America's Unpatriotic Acts , The Federal Response to Hurricane Katrina , and Sex and the Single Beer Can: Probing the Media and American Culture . All are available through amazon.com, bn.com, or other bookstores. You may contact Dr. Brasch at brasch@bloomu.edu

Walter Brasch Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

lyn waddell-sheeler
13 Jan 09, 08:44
Quit knocking our president.

Our president has done his best as if any of you could of done better, He can only work with what he has i salute our president. God chooses our presidents. And God knew what he was doing when he chose president Bush. He is a strong man. and he stayed the course.President Bush I will miss you. GOD BLESS YOU AND YOUR FAMILY.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules