2008 has been especially rough for the United States economy, culminating this week with another poor showing on Wall Street. The Dow Jones Industrial Average, for example, is already down 9% in just two weeks of trading in 2008. It seems that everywhere you turn, people are talking about a recession. President Bush has given the state of the economy numerous "thumbs up" in recent years and has largely ignored the many warning signs of an economic slowdown.
This week, Bush finally acknowledged that, in fact, the United States economy is not as rosy as he has been telling us. He met with Congress January 17th to discuss a $150 billion economic stimulus package, aimed at kick-starting the sagging U.S. economy.
Many of us have seen a recession on the horizon for a while now. I'm certainly no economist, but I understand that what economic situations are good indicators of recession, and that the simultaneous existence of many of these these factors is a bad sign. To anyone paying attention, A) the bursting real estate bubble, B) the foreclosure crisis, C) record national debt, D) record levels of personal consumer debt, E) reckless military spending, F) the evisceration of the middle class, G) rising inflation, H) stagnant incomes, I) rising energy costs, J) the Social Security crisis, K) a weak U.S. dollar and L) more and more jobs being shipped overseas, all pointed in the direction of a recession.
But that is part of Bush's appeal, apparently: the ability to look at a dire situation and see the complete opposite. We're winning the Iraq War, remember.
Bush's 2007 State of the Economy is essentially a feel-good story of a nation without an economic care in the world. The report's cherry-picked economic data belie the very real financial issues Americans are facing.
So why has it taken Bush so long to grasp the gravity of this situation? Presumeably it is because he believes that the only components making up the national economy are i) job growth and ii) corporate earnings. I'll admit that I don't quite get "job growth." It seems as if everywhere you look, major U.S. companies are laying off employees by the thousands, yet job growth remains strong according to the Bush Administration. I mean, in just the last couple of years alone, we have seen layoffs from:
Ford: 30,000 jobs
Hewlett-Packard: 20,000 jobs
General Motors: 30,000 jobs
Dell: 8,000 jobs
Citigroup: 20,000 jobs
Chrysler: 13,000 jobs
Bank of America: 3,000 jobs
Verizon: 7,000 jobs
Oracle: 5,000 jobs
Proctor & Gamble: 6,000 jobs
American Home Mortgage: 6,250 jobs
Countrywide Home Loans: 12,000 jobs
We know jobs are being cut. But where are all these supposed new jobs coming from? Jobs are cut either because of corporate mergers, because they are moved someplace cheaper, or because a company is failing. These are jobs that aren't coming back. I understand that new jobs are created due to company growth, and that companies like to announce layoffs because they make the value of their stock increase. I just don't see how job growth is steady in this country. Chalk this one up to ignorance, I guess.
As for corporate earnings, Bush's economic policies of deregulation, corporate welfare and capital gains tax cuts have certainly benefited investors and the super rich. That cannot be disputed. For years, Bush was hidden behind a strong Wall Street to avoid discussing the real economic problems facing the middle and lower classes. Not only have Bush's economic policies benefited the wealthy at the expense of the middle class, but they have actually created the smoke and mirrors with which to obscure the looming recession and eroding middle class.
So instead of telling us how great the economy has been over the last 7 years and exclusively looking at the "half glass full" scenarios, President Bush would have been better served to heed the economic indicators and do something before it became too late. Many economists believe we are already in a recession. It remains to be seen if Bush's plan to throw money at the problem will work. Personally, I'm skeptical. The proposed tax relief plan of $150 billion, divided evenly among every American would would amount to roughly $500 per individual. Don't get me wrong, George. I'll take the money. But for many Americans, that's just about enough money to pay their credit card bills this month. I don't think that will pull the United States out of a recession any time soon. I hope I'm wrong, but judging by Bush's economic track record, I'm not getting my hopes up. While President Bush has had one thumb up in praise of the U.S. economy, the other thumb has apparently been somewhere else.
