The Myths and Harsh Effects of Bush's Economic Class War
By Larry Beinhart, AlterNet
Posted on April 28, 2008, Printed on April 28, 2008
George Bush came into office. There was a recession almost immediately. Officially it began in March of 2001 and, officially, it ended eight months later.
The causes of that recession are vague and amorphous, generally credited to the "business cycle."
There is, in addition, a minor Republican industry dedicated to back-dating the onset by five months, to November, 2000, in order to make it a Clinton recession. Or, to inadvertently to say that the very election of George Bush screwed up the economy, he didn't even have to come to power.
Bush came in with a plan for tax cuts. Originally, that was based on the government having a surplus and it was packaged as giving people their own money back. When the surplus disappeared, due to the recession and the tax cuts, he kept pushing the tax cuts as a jobs and stimulus package. The economy went into "recovery" by 2003.
The administration claimed that the recovery was due to the tax cuts. It was an odd and rather limp recovery. Indeed, it was a mysterious one and the mystery was that the US was still losing jobs. This was considered inexplicable.
The administration claimed that the weakness in the economy was due to 9/11 and being in a war. The very same people who used that story would have been the first to say that Roosevelt and the New Deal did not bring the US out of the depression, it was World War II that did it. Historically, wars have produced booms. But their war was somehow different.
Nonetheless, the five years from 2003 to 2007 are now routinely described as having been a "boom," a time of "robust" growth, low inflation, and low unemployment. Now we are in, or facing, a recession.
This recession was brought about by a specific over-expansion, the "sub-prime lending bubble."
This has caused turmoil in the credit markets.
The cure is a "stimulus package." It consists of two parts. Low interest rates and giving cash out to every American, in the hopes that we will "consume" our way out of trouble. It's hard to tell how much anyone believes this will work, but Republicans and Democrats have all signed on, no one is saying it's nonsense, or pointing out the obvious, that's the horse that brought us here. Here's the reality.
The recession of 2001 never ended.
At least not for ordinary Americans.
Ordinary Americans found that their income was declining. From 2001 to 2007, median family income declined - depending on where you get your figures from - by somewhere between $500 and $1,000. Median individual income went down by at least $1,000.
The yearly average number of new private sector jobs created from 2001-2008 was just 369,000, not even keeping up with the growth in population. It should be compared to the average number of new private sector jobs created from '92 to 2,000: 1,760,000 per year.
The number of people in manufacturing jobs decreased by over 3 million.
The number who got health care at work went down, from 64.2 million to 59.7 million. The number of people without health care went up from 38.4 to 46.9 million.
The number of people in poverty increased from 31.6 million to 36.5 million.
The value of America's businesses, at least as measured by the stock market, did not go up. An astonishing thing in what was called a boom. Meantime, the cost of living went up.
Home heating oil went up about 150 percent. Gas at the pump at least doubled. The cost of health insurance went up about 50 percent. The cost of college went up about 30 percent. Now food is going up. How can the myth and the reality be so different?