Bush's presidency, with his rubberstamp Republican and Democratic congresses, was the earthquake. Now we face the economic disaster tsunami produced by the earthquake. The ordinary solutions-- income tax cuts, prime interest rate cuts-- they won't help and could make things worse. Visionary, courageous leadership is essential.
There's a story about the economy; Economic Stimulus Is Already Too Late in today's NY Times. .
Fact is, just about any day you pick up the Wall Street journal, you see reports that the economy is getting worse-- house sales down, home prices lower, more mortgages defaulted, more banking and lending institutions losing tens of billions, the dollar droppping in value, more countries shifting away from the dollar to the Euro, jobs down. Gold and oil at record highs (cash goes to gold when the dollar is weak and threatened.) Crop and food prices rising due to costs of oil and shifting of resources to alternative energy production.... Sounds pretty bad, eh?
Well it's going to get worse. The fact is, we shouldn't expect miracles from the congress, in terms of bailing us out of this mess. Discussion over whether we are in a recession will soon fade as the denial is squashed like a bug, by reality. We ARE in a recession and it will get much worse.
Bush and his rubber stamp congress got us into this mess, with globalist agreements that removed protective tariffs, increased the instability in the middle east, which led to massive oil price increases, put us into huge debt, which decreased the credit rating of the US, motivated international money to go elsewhere.
Bush and Alan Greenspan got us into the housing/mortgage disaster we are still falling down deeper into by de-regulating lending, by allowing low interest rates for anyone, by allowing games to be played with transferring of debt assets.... Like the many warnings of terrorists threats, that Bush and Condi Rice claimed they never heard or saw, there were many, many warnings that the US was going to go into a huge housing slump. In 2003, the British were already in the middle of one. I knew it was coming (should have shorted Toll Brothers and similar housing construction companies) and friends knew about it. Surely Bush's advisors should have known. Greenspan should have known. They could have taken a look at the financing, at the tax breaks. They could have prevented some of the problems.
Instead, the banking industry made things much worse. What the hell, they'd given more to Bush and the Republicans, in lobbying money, campaign gifts and 527 support than any industry, except, possibly, pharmaceuticals. They could pretty much do whatever the hell they wanted to do. So, in the US, things are much worse than the mess that Britain had and is still going through (Yes, the housing crash in the UK is still going on, five years later. We're in the first or second year of ours, here in the US, and that suggests that we face three or four years, more, at least.
One article, about a month ago, in the Wall Street Journal, reported, like the article in today's NY Times, that, because the US operates, more and more, in an international environment, with many, many factors, it is less and less capable of influencing the economy by manipulating one variable-- like the interest rate. The stock market may show a flicker of upward movement when Bernanke drops the prime rate a quarter or half point, but that doesn't change the Bush/Cheney induced instability in the middle east that has raised the price of Oil.
Harry Reid and Nancy Pelosi may introduce some band-aid legislation to help a percentage of the home owners with predatory mortgages that are eating them alive, but does that help the people with conventional mortgages whose homes have dropped in value so much, they can't afford to sell them to make the moves they planned, because there is no longer enough equity left in the house?
The truth is, "stimulus packages" are bandages, like giving 500 MG of vitamin C to someone in an auto accident with two broken legs, crushed and shattered ribs and a punctured lung.
The USA is in for bad times and that may mean the rest of the world will take the ride down the economic roller coaster with us. The usual band-aids will not work. The usual short term, month to month approach will not work.
We need big, visionary thinking that is out of the box. Trickle down, cut taxes economic idiocy never worked and now, any presidential candidate who suggests that this is the solution is... an idiot.
That's not saying that smart tax breaks might be part of the solution, but they should be aimed at stopping the housing price crash and mortgage tsunami disaster we are just beginning to experience. Maybe banks need to be taxed, with new taxes, but then given breaks, if they convert mortgages from adjustable balloon types-- the ones that are bankrupting so many home owners-- to conventional, 30 year, affordable mortgages.
And then, let's take a look at these slime ball CEOs who lose billions for their companies and then exit with golden parachutes. They should be paying penalties, and maybe even doing jail time, not getting rewarded. Maybe we should pass laws taxing them at 99%. That's what they deserve-- and throw in their choice-- orange or red-- for the country club VIP prison garb they get to wear.
Is it crazy to call a CEO who costs a company, its investors billions, its laid off employees, lost jobs, it's creditors hundreds of millions in unpaid bills? How dare these fools take hundreds of millions in exit pay? They deserve nothing. They deserve VERY close scrutiny and the oppposite of the protection they are now getting.
And let's talk about Alan Greenspan. He watched all this coming down. If he didn't see it coming, he's an incompetent fool. If he did see it coming and did nothing to prevent it, what does that make him then? Either way, he should go down in history as a disaster capitalist.