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Tuesday, May 6, 2008

Dubya's Economy is in the Dumps

As voters go to the polls today in Indiana and North Carolina, many of them surely are troubled about the state of the American economy.

Justice-related stories are the primary focus of our humble blog. But the dismal American economy figures to be a major story for the rest of 2008 and well into 2009. And if John McCain is elected president, there is reason to believe we are headed for a 1930s-style Depression. In fact, George W. Bush has taken the vibrant economy he inherited and screwed it up so severely that even Hillary Clinton or Barack Obama might not be able to fix it--at least for awhile.

So while the Hoosiers and Tar heels try to clarify the Democratic race (maybe) today, let's consider the economic mess that our next president will inherit.

Dubya would have us believe that our current quagmire is just part of the economic cycle--or that Democrats in Congress are to blame. But the truth is this: Anyone who has read the works of Kevin Phillips, perhaps our foremost economic historian, could have seen this coming as far back as 2000.

Phillips latest book, Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism, is just out--and the picture isn't pretty. In fact, the headline on The New York Times review--"What Ails the American Economy? Everything, and There's Worse to Come"--pretty much sums it up.

How bad is it? Consider this paragraph from the review:

By 2007 total indebtedness was three times the size of the gross domestic product, a ratio that surpassed the record set in the years of the Great Depression. From 2001 to 2007 alone, domestic financial debt grew to $14.5 trillion from $8.5 trillion, and home mortgage debt ballooned to almost $10 trillion from $4.9 trillion, an increase of 102 percent. A crisis in the mortgage market in August 2007 brought the party to an end. Since then we have been living in a twilight zone of what a security analyst quoted in the book calls "one of the slowest-moving train wrecks we've seen."

Phillips is not the only one who saw this coming. The Alabama blog writechic had an excellent post recently, providing historical context to our current economic woes. Title of the post? "The Republican Erosion of America." Here's a highlight:

Did you know that ALL recessions since the 1930’s, save one, have taken place under Republican presidents? True fact. The single exception occurred at the conclusion of World War II during the administration of Harry S. Truman and it was one predictable consequence of ending a war. It was also the shortest, as well as the shallowest. Contrast that with the fact that we are now enduring our SECOND recession due to the gross mismanagement of that congenital idiot and the band of thugs in his administration.The irrepressible BartCop, whom I quite enjoy, is fond of saying “It’s the Republicans’ job to crash the economy so the super-rich can swoop in and buy companies and assets for pennies on the dollar.” (Vol. 2139, in “Quotes” near the top of his page) Now, this is a bit on the simplistic side, but in essence, it’s EXACTLY what they do! And another for good measure: “Never trust a Republican. It’s their job to crash the economy so their billionaire friends can buy once-healthy companies for pennies on the dollar, fire the employees and sell the assets for profit.”

How many Americans go to the polls thinking Republicans are stronger than Democrats on the economy? How many Americans are ignorant when it comes to history?

Need I remind you here about the Great Depression? That worldwide catastrophe was brought to your predecessors courtesy of the Republican Party. After Warren Gamaliel Harding was elected president in 1920…and died two years later, vice president Calvin Coolidge took over the Oval Office. He served out the remainder of Harding’s term and was reelected in 1924, serving until he was replaced by yet another hardline GOoPer, Herbert Hoover, in January of 1929. One of the worst of the outrages perpetrated by “Silent Cal” was the transformation of the Federal Trade Commission, through his appointees, from an agency intended to regulate corporations into one dominated BY Big Business, FOR Big Business. Sound familiar?

Looking back on the so-called “Roaring Twenties,” hindsight quickly reveals the abjectly corrosive nature of Republican ideology. Andrew W. Mellon–at that time one of the three wealthiest men in America!–was Harding’s Secretary of the Treasury and Coolidge kept him on, a voracious fox charged with guarding the henhouse. Mellon’s maniacal dedication to such hair-brained schemes as income tax cuts, inheritance tax cuts and an aggressively pro-business agenda coupled with utter disdain for fiscal caution, resulted in skyrocketing debt…and made the decade appear to “roar.” It also served as camouflage for underlying economic weakness. Farmers were already in an economic depression at the time and it was a widening income disparity which ultimately caused the bottom to drop out of the Stock Market on “Black Tuesday,” October 29, 1929. Bank deposits were withdrawn in a frenzy after that and something on the order of NINE THOUSAND banks failed between 1930 and 1932.

Your GOP at work!

And if you think they’re not trying for a rerun, you just haven’t been paying close enough attention. Did somebody mention Bear Stearns?? The vast gulf between the “have mores” and all the rest of us is at its greatest point since then, excepting only the tech-bubble years of 1999 and 2000. It’s no secret that wages have stagnated…but creative book-cooking has hidden the extent of it. Just over a year ago, it was revealed that in the midst of unparalleled corporate profits, we also have record poverty.

How is this affecting everyday Americans? Associated Press reports that lots of folks are selling prized possessions to help make ends meet. Wonder how many of the folks featured in this article plan to vote Republican.

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