Iraq has blown up in their faces. Terrorism is a much greater threat than when they took office. Competence went south with Katrina. Integrity has been ground under the wheels of the Tom Delay-Jack Abramov-Randy Cunningham-Bob Ney corruption caravan. They’ve shredded the Constitution with the Patriot and Military Commissions Acts. Mark Foley and Reverend Ted Haggard are their poster children for family values. Fiscal discipline? They’ve increased government spending at a faster rate than even Lyndon Johnson. By more than 2-to-1 the public says the nation is headed in the wrong direction.
It’s no wonder the Republicans are thrashing about for something — anything — to try to salvage an election. So they thought they’d try for the economy.
It’s not going to work.
The economy under Bush is like that village the Russian minister constructed for the Tzar to ride by in a train: phony storefronts and fake houses in the distance. A movie set to convey the illusion of prosperity since the reality would have cost him his head. His name was Potemkin.
The Bush campaign claims the economy is doing great, that its tax cuts have spurred economic growth. The truth is that it’s all phony storefronts and fake houses, Potemkin posturing.
To be sure, there is some news that can be spun as “good.” Unemployment hit 4.5% in the third quarter, a respectable number. And the Dow Jones Industrial Average has topped 12,000. That’s about it.
But those numbers reflect nothing so much as the old adage that “figures don’t lie, but liars figure.”
Unemployment is low because millions of people have dropped out of the workforce. The jobs that have been created have been overwhelmingly in low-wage domestic services like retail cashiers, bartenders, in-home medical assistants, and waitresses.
And the Dow is an index of just 30 stocks, hardly representative in a universe of more than 5,000 stocks. Indeed, the much broader NASDAQ is still 55% below its historic high.
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But what about the bad news, the mad uncle in the attic they hope doesn’t get out before election day? Here is just some of the bad economic news, the reality behind the Potemkin façade that the Bush campaign doesn’t want you to see.
- Real median hourly wages have declined almost 2% under Bush. And this, five years into what they call an economic “recovery”. Oops.
- GDP growth is falling rapidly, down from 5.6% in Q1 to 2.6% in Q2 to 1.6% in Q3. Oops. Q4 will almost certainly be negative, the onset of a new recession.
- The nation’s savings rate has fallen below zero, the first time since the Great Depression. Oops.
- Home prices have just taken their biggest plunge in 35 years. Oops.
- Two million more people are in poverty than when Bush took office. Oops.
- Forty-eight million people have no health insurance, four million more than when Bush took office. Oops.
- Three million high wage manufacturing jobs have been lost under Bush, sent to China so Bush’s wealthy backers can make more profits using Chinese slave labor. Oops.
- The trade deficit has exploded to over $800 billion a year, up from $377 billion in the last year of the Clinton administration. Oops.
- With his record budget deficits, Bush has added $3 trillion to the national debt, more than any president in history. By the time his administration leaves office, it will have created more debt than all previous presidents COMBINED. Oops.
- As a result of Bush’s record debts, the nation is forced to borrow almost $3 billion a day, most of it from foreigners. Not since before the Civil War has the U.S. been so dependent on foreign capital. Oops.
- A full 70% of Bush’s $1.6 trillion in tax cuts went to the top 20% of income earners, those making an average of $190,000 per year. The bottom 40% of income earners, those making $14,000 a year, got a total of 5%.
- A higher share of national income goes to corporate profits than at any time since 1948. Oops.
- A lower share of national income goes to wages than at any time since 1947. Oops.
- As a result of all of the above, income inequality—an inverse proxy for the vitality of democracy—is the greatest it’s been since the 1920s, just before the Great Depression. Oops.
The truth is that what vitality there is in the economy is due to the massive expansion of debt: $3 trillion in federal borrowing; a cumulative $3.5 trillion in trade deficits; and a staggering $11 trillion in home mortgage debt.
Any moron borrowing almost $18 trillion in five years can fake the illusion of prosperity. But even at that, Bush can still barely even muster the illusion. The façade is popping rivets like the Titanic just before it went down.
Usually, when times are “good” you pay down the debts that tided you through the last bad time. Bush has done exactly the opposite: used the “good” times to load the nation up to its neck with debt so as to create an illusion of prosperity that his policies cannot actually deliver.
To be sure, all that debt is a huge bonanza for Bush’s wealthy backers, those who loan all that money and at much higher interest rates than would be the case without all the debt. And they’ve got the American public conscripted to work it off for generations.
But trying to repay it all will be a disaster for our children who will suffer grievously diminished prosperity. It will be a catastrophe for future economic growth. Trillions of dollars that could have gone to rebuilding the nation’s infrastructure, for education, for research and development, will now go to fund interest payments for those who are already the most wealthy, Bush’s “base” as he calls them.
Bush’s “economy” gambit is as phony as that cheesy silver paint used to make cheap lamps look expensive. Tweak it just a little and it cracks, exposing the gaudy plastic beneath. Everything else Bush has done has turned into disaster. Scratch it just a little and you’ll see that the economy has too.