(Note: pay particular attention to the bold links.)
The challenge: (the New London Day, Letter September 3, 2010) Can anyone name one specific George W. Bush economic policy that led to the financial crisis ?
Ok. Bush isn't responsible for all the damage, but his policy, favored by Republicans and movement 'conservatives' , was at fault. If they get new strength in the Congress next election, they will continue gridlock and the wrecking.
Bush, like his Republican team, was keen to deregulate, and make government smaller. (Ironic, That's what Karl Marx wanted too.) What this really meant was they didn't favor Corporate regulation. (They are fine with imposing their regulations in hospitals...on you.) So what we got were regulatory agencies that did nothing. They didn't notice Bernie Madoff, toxic toys coming from China, banks speculating with government insured money, ratings agencies conspiring with brokers, Accountants turning a blind eye to off book transactions, pallet-loads of money disappearing in Iraq, widespread war-profiteering, workplace safety problems, or lobbyists running wild. The financial sector, in a binge of wild speculation, heavy leverage, and corruption, ran out of control and destroyed a lot of the real economy.
A downsized, out-sourced government performed as expected after Katrina.
Market competition works best when there are many participants, but Republicans don't bother with anti-trust. Media has been more and more concentrated for decades. Bush along with Senator McCain overseeing Michael Powell, Chairman of the FCC, made sure that it continued. I would argue that media concentration has impaired our politics, education, and ability to make credible policy decisions. It looks like the internet will also be tamed for corporate consumption soon.
Bush policy was regressive. When income disparities become extreme, markets collapse for lack of demand. This lesson was clear in the 1930's and a number of economic stabilizers were put in place: Social Security was created to provide for the vulnerable, Glass-Steagle prohibited banks from speculating with taxpayer insured deposits. Bush (Republicans) exacerbated the problem by governing for the corporate elite and by rewarding them with tax cuts (which in spite of Republicans should expire soon). Repeal of the estate tax (death tax in Republican speak) will reward the Walton family, owners of Wal-mart with a windfall of $27 billion and many other already very comfortable individuals will get theirs too. In addition, Republicans weakened the economic stabilizers: ratcheted down the graduated income tax, abolished Glass-Steagle, and attempted to privatize Social Security. (They haven't given up on that.)
We have again come to a gilded age. It is well documented that a wide income gap is closely related to pathological social problems, but Republicans never seem to know that. So they are prepared to cut social security, roll back health care reform, privatize everything including the military and prisons. Republicans unvarnished greed is very un-Christian. (They REALLY don't want to pay for health care for illegal immigrants.) While poverty is increasing, the middle class is shrinking, we have come a long way toward a new aristocracy. We have seen, repeatedly, that 'tickle down' does not.
Globalization, as Bush partisans fostered, empowered multi-national corporations. It allowed companies like Wal-Mart to move manufacturing to the lowest wage countries, destroy American unions so that workers could mount no opposition, reduce wages for their employees, and slowly phase out traditional perks like pensions, health care, .sick time, vacations, etc. Workers hours are longer. Families now need two incomes to maintain their lifestyle. While wages declined, Corporations downsized and became a lot more profitable, stocks soared, and CEOs, even in troubled companies, obscenely rewarded themselves. (The graduated income tax could be an antidote to that, but powerful lobby$ oppose it.) Short-term, short-sighted strategies didn't last long, so now the consumer market is weak, stocks have slumped, manufacturing has migrated off shore, and armaments have become our leading remaining industry.
In some sectors the economy grew. The U.S. military and prison population are the largest in the world. Make no mistake, war will make you poor. Since the military-industrial complex has employers in every state, Congress continues profligate 'defense' spending. (It's really an unwise jobs program.) Bush's wars, $3 Trillion according to Nobel Prize winning economist Joe Stiglitz, were not on the books. Torture and renditions were authorized at the highest levels of government under Bush. You are not safer. Republicans declared themselves immune from international law. There has been no accountability.
Another Republican myth is that only the private sector can create jobs. We all know that there is always plenty of work to do. To have a large fraction of the population unemployed is to allow their skills to atrophy, keep them in poverty, and to lose forever the fruits of their labor. US infrastructure has been neglected. Lots of worthy projects go undone. Can the public sector do these things ? Of course. You can see it in the many assets that were created by WPA workers in the 1930's. Republicans will not agree to public initiatives. They scream about socialism, but there is no real discussion of the proper role of the public and private sectors. The private sector only needs an increasingly small fraction of the work force, the public sector, especially in a recession, should take up the slack.
One of the ways the economy is politicized is by measuring only the flow of money. You can't eat money, but it is Republicans main concern. Although Nobel-Prize winning economists like Stiglitz and Krugman say the stimulus should be larger, Tea partiers (and Linda) want a balanced budget amendment.
The condition of the economy is best measured by things that indicate the well-being of people. For example:
Can we expect that the environment will continue to sustain us ? The science consensus points toward calamity: species going extinct, polar icecaps melting, unprecedented forest fires, deadly heat waves, violent storms. The actual climate is even worse than the climate models projected. The forensic history of the planet indicates that when CO2 concentrations get high, there is a subsequent extinction event. Although it would be conservative in a real sense, Republicans are keen to stop any mitigation of greenhouse gas, Our most urgent challenge, climate change, will not be addressed because Congress, effectively blocked by Republicans, will continue to be in gridlock. The Republican legacy for their children could be an increasingly uninhabitable planet. It could happen quickly.