Tuesday, March 3, 2009

Obama owns this recession

The stock market continues its slide through the 6000s to the 5000s. Unemployment is soaring. Consumer confidence is plummeting. Housing prices are decreasing and foreclosures are increasing. And…the Democrats and Obama are blaming Bush. Nice try but that will not work for much longer.

In October of 2006, the stock market was in the 14,000s! Consumer confidence was above 70%. Gas and energy prices were stable and average. Interest rates were low. Housing sales were high. Housing values were soaring. Foreclosures were below 5%. Unemployment was below 6%. Durable goods sales were increasing. Car sales were good. The list goes on and on of all the positive aspects of the Bush and Republican economy. So, what happened?

In November 2006, the Democrats took over Congress. Soon after that, they raised the minimum wage, which always creates an increase in unemployment. They said they would not make the Bush tax cuts permanent. This sent a message to most Americans who pay taxes that they will be getting a tax increase in 2010, which created an uncertainty in the economy. Then, the gas prices started to soar which put pressure on the entire economy. The Democrats would not lessen the restrictions on oil drilling, which would have decreased the price of oil, and the prices soared to record highs. This hurt the economy at all levels.

Then, Republicans, Bush, and Greenspan warned the Democrats about the instability in the housing market and Freddie Mac and Fannie Mae. They started the warning in 2007 and 2008. The Democrats, Barney Frank, and Christopher Dodd all said that the institutions were fine and pushed them to take on more home loans. This, of course, caused them to collapse in 2008, when homeowners could not afford their homes after the their adjusted rate mortgages started to go up. Foreclosures soared. As Freddie Mac and Fannie Mae collapsed, it caused a domino affect of bank failures in banking systems across the world. This was the catalyst to the economic problems we are in today. Notice no Republican caused it. They warned to stop it.

Then, when Obama took the lead in the primary the stock market began to decline. Then, the housing market crashed. The stock market continued to decline. Obama won the primary and the stock market slid further. As Obama’s poll numbers increased, the stock market did the opposite. As Obama made speeches and laid out his policies, the economy sunk further directly reacting to his economic plans. Business people did not want high taxes, more regulations, and his other plans.

The Democratic Congress passed TARP and the bailouts began. Then, Obama won the election and the markets continued their slide.

Since the inauguration, Obama has passed a Stimulus Bill, a home foreclosure plan, and submitted a budget full of tax increases and excessive spending. What has happened? The stock market has lost at least $2 trillion dollars and 30% of it value. And, since the Democrats took power in 2006, the stock market has lost over 70% of its value.

This entire decline in the economy is a direct response to the Democrat’s policies. Since becoming President, Obama has talked down the economy. He has declared there is crisis, a catastrophe. His new budget with its tax increases is an out right declaration of war on the wealth of this nation, on small businesses, and investors. The market responded with further declines.

At this point, it is intellectually dishonest and borderline insane to say that the Democrats do not have culpability in the recession. Bush has his hands dirty too. Yes, he started the bailouts, but Obama is continuing them. Obama is raising taxes steeply in a recession, which is what Hoover and FDR did. This was one of the direct causes of the “Great Depression.” Hoover and FDR did not know what would happen. Obama doesn’t have that excuse. He has history to show him what to do and he is doing the exact opposite.

So, the economy slips further and further toward a depression. Obama owns this economy now. It is evident when he speaks or institutes a policy the stock market declines and companies layoff workers. If his speeches and policies were what investors and business people wanted to hear and worked, the market would be going up, not down.

So, blaming Bush does not work anymore. Obama’s policies are taking hold on the economy and affecting it at all levels. The stock market is plummeting, unemployment is soaring, foreclosures have soared, and consumer confidence is declining. Bush did not ask for higher taxes or make speeches saying the economy is in crisis. Obama did.

You broke it, Obama. You own it. Not Bush.


  1. Yep, he completely owns it now,however the liberals in the media and talking heads will try to blame Bush,who only had a small hand,for all of it.

  2. Democrats have been in charge of Congress since 2006. They conveniently ignore that fact. And there is no question at this point that the market is circling the drain as a result of Obama's plans, policies and propaganda.

  3. Good luck making this point stick with the sheep in this country. This is a society of 'someone else s fault, not mine'.

    It is much easier for the general public in this country to cipher out finger pointing than actually studying the facts for themselves.

  4. I completely disagree with this post and comments. The movement that started this recession didn't start in Jan 2006 when Dems started winning elections.

    It is amazing that Republicans and conservatives want to run away from George Bush's legacy by throwing everything and anything at a virtual wall to see what sticks.

    The stimulus hasn't even kicked in and already it's all of the sudden Obama's economy! Sick.

    The Bush administration blew $1T surplus left to the nation from Clinton, then added $5T of debt of its own, yet no conservative on this blog will face up to that truth.

    Why is it that Bush's debt was all good and Obama's all bad? Why is money for banks all good but saving a hard working person's home (through refi package) all bad?

    I am neither liberal, nor conservative. These labels are no longer practical in the 21st Century (anymore more than being a Royalist would have been in the second half of the 20th Century). Political leaning is not an economic theory.

    If you intend to make a cogent, supportable, logical argument that this is all Dem's fault, you will have to lay out a real casuality story. One that is supported by facts, by economists, one where the math adds up.

    The current recession woes is a lot more than banks. Most business have been accumulating debt for the last 10-15 years. This growth threw debt created ridiculous institutions like GE which accumulated $300B in debt. If you used a profit to debt ratio, you knew it was bankrupt a long time ago.

    Low interest rates facilitate by the Fed Res bank created an unchecked and unrealistic financing environment. Banks earned money on fees it charges for acquisition transactions - from things like merges, home purchases, even auto purchases.

    However, of course we now know, banks were also facilitating this by taking ever increasing levels of risk. The entire economy was a huge Ponzi scheme like environment where debt was refinanced to pay other debt. It works until debt loads exceed marginal deposit accounts.

    All this was observed and known as early as 2003, maybe even 2001, certainly by 2004. It happened on Bush's watch and he signs the bills, but it makes no sense to blame Bush, or Clinton, and Pelosi/Reed. A revamp of banking was needed and no one tried - ever. None of them.

    If anything, it is Paulson who should have made plans to curtail the current catastrophe.

    Both FDR and RR pumped the economy to get it started. RR did it by tax cuts and heavy military spending. The Treasure suffered for the next 8 years on lower tax revenues(see http://en.wikipedia.org/wiki/Economic_Recovery_Tax_Act_of_1981).

    FDR spent his way out, resulting in an immediate 10% growth in the economy.

    The economy is currently contracting at something like a 12% rate, so a NET -2 to -6% rate in 2009 would mean that the Stimulus is actually working.

    Blame Democrats? Whatever you need to get you through the night -- but just know that you are being delusional.