I've pasted the text below. My take is that is that the last eight years promoted an environment of unchecked greed. I believe there is plenty of blame to pass around. I blame not only the bankers, loan agents, and CEOs, but also those citizens who took out loans they couldn't afford or who took out home equity lines of credit to buy plasma screen TVs rather than investing more in their own education. Granted there was a lot of misleading going on.
The thing is that greed begets greed. When you have a CEO who takes out more than his fair share of th pie, then that prompts those under him to do the same - for fear that they'll be left out. So, things don't trickle down. Instead, there's a clog. And you end up with a deeper division of wealth in which those at the upper end of the spectrum have an even greater proportion of wealth and a greater number of people find themselves at the lower end, having an even harder time trying to make ends meet.
Don't get me wrong. The US is not the country with the greatest division of wealth out there. Countries like India are worse. So too are places like Africa and Latin America. But therein lies the problem. Countries with the greatest divisions of wealth coincide with those that are considered third world.
I mean do we really want to have the US become a third-world country?? Is that what the end goal is of our government? Sometimes I feel it is. There has been too much focus on bailing out the rich and giving them a greater share of the pie than they deserve, while squeezing out the rest of the population. Finally, we've reached a critical breaking point. One too many straws, and the camel's back has gone "crack"...
I don't know what the solution is to this mess. I suspect that it will involve both near term and long term measures. It won't be easy. Ultimately, though, we need to create a fundamental shift in the consciousness of society. We need to move away from unabashed greed. We need to focus more effort on fundamentally improving education. We need to get back to a mentality of striving to be the best rather than being "content" with being second best. Ultimately, we live in a meritocracy - and that's something that the information age has brought about. No longer are people going to be content buying US products because they were made here -- especially when better products can be bought abroad. Have you looked around you in a parking lot lately? Ever wonder why you see so many foreign cars?
One of the first signs that the world has shifted should have been clear in the story of Google. Here was a company that entered the search engine space, which was already crowded, with only a modicum of capital and no real effort spent on marketing. What they offered was a simple interface and what was at the time the best technology out there. That won out. They are now the dominant players in their space. In contrast, a while back that would never have happened. For example, Microsoft has long peddled inferior products, and have used their market share and essentially monopoly-like muscle to gain profits. The tables have largely turned.
In the information age, people are no longer dazzled by fancy graphics. They are no longer victim to one company's dominance. Instead, they are interested in buying the best possible products. And that's what our economy ultimately needs to do to garner success. Economics is, at its heart, a simple matter of balancing production with consumption. If one is out of whack, then the see-saw will come crashing down. We've exceeded production - but only of crap - and now have a "liquidity" crisis since people aren't interested in consuming it.
It's time we get back on track. Towards not accepting mediocrity. Towards producing worthwhile products, and not consuming more than we actually produce.
... OK, that was a real tangent. As you can see, I have a lot of thoughts on the issue. So, without further adieu, here's the HuffPo article I mentioned earlier. Ultimately, I think it's important to keep in mind that the effects of the last eight years will take at least as long to deal with. Rebuilding after a catastrophe takes a long time. I hope President Obama has the courage to make decisions that lead to longer-term benefits, even if it won't be clear to the average American that those benefits stemmed from his policy choices.
When Barack Obama took office, it was clearly with a vision of a bi-partisan (or in his mind - 'post partisan') administration. This was clearly naive. Perhaps voters want it, and perhaps there are some enlightened politicians who can see the forest for the trees, but for the large majority - the Democratic win in 2008 is little more than a call for the Republicans to regroup and prepare for a full frontal assault in 2012.
If this wasn't clear before the vote on the Stimulus package, it should be clear now.
Already Republican operatives are drafting commercials for the midterm elections. They'll play like this: "Since Barack Obama took office, XX Americans have lost their jobs, XX Americans have lost their homes, and XX Americans have filed for bankruptcy. In light of the failed programs of the Obama administration, it's time to re-elect Republicans on a platform of tax reform, smaller government, and less handouts to the poor and underprivileged."
These commercials will work, because we all know that however successful the stimulus package is, there will be months, or years of economic pain before we start to see the positive effects of these investments.
So, what to do about this?
The answer is, we must name our pain. We must begin to refer to the current recession as the "Bush Recession." We must talk about the difficult, complex, long-term efforts we'll need to all engage in order to reverse the toxic economic environment created by the "Bush Recession."
The Bush Recession didn't happen overnight -- it took 8 years of careful, purposeful, willful actions to create this cycle of economic devastation.
I understand why Obama isn't focused on blaming the Bush administration. He's right to look forward, rather than back. There's way too much to do to spend any cycles placing blame. At the same time, if we don't name our pain, then we're likely to find ourselves fighting off right wing pundits in 2 years, and 4, who try to re-write history and hold the Obama administration responsible for the very things they're trying to fix.
So, with that in mind, let's catalog the drivers that have created the Bush Recession, and make sure we agree that these collective actions happened long before the Obama administration was in the White House.
First, the sub-prime mortgage meltdown. During the 8 years the Bush administration was in charge, we saw a dramatic expansion in available credit to borrowers who where not able to quality for conventional mortgages. This boom in new buyers drove up housing prices, creating a bubble of newfound wealth in the equity of homes, and creating a cycle of borrowing against newly inflated home equity. This bubble was evident to economists and consumers alike, yet in the absence of any legislation or government controls - the trend continued to balloon.
Second, Iraq. The cost of our dramatic increase in military spending provided a huge drain on the Federal Budget, as services that were heretofore part of the military budget became privatized and outsourced. Companies like Blackwater and Halliburton received huge military contracts to provide services - often without bids or oversight. Now, seven years later, we're uncovering fraud, waste, and violations of human rights that reflect both the size of the contracts and the Government's basic lack of ability to oversee or administer these programs. The elixir of privatization and deregulation created an environment that was ripe for fraud and misuse. In hindsight, is this any surprise?
Third, abandonment of a US economic vision. For 8 years the Bush administration focused on security and fear, while any vision of our economic future got put on hold. Gasoline taxes, emission standards or innovation in our core sectors were all either ignored or frowned upon.
Fourth, the environment. As George Bush dragged his heals on any environmental science, things like Kyoto were left unsigned. As former Vice President Al Gore raised the nation's awareness of Global Warming, the Bush Administration sought to minimize and obfuscate the science around climate change. As a result, government funding for new energy was back-burnered, and industries that count on the Government to legislate change and create a level playing field continued to build and produce gas guzzling trucks and automobiles. While world governments have used gas taxes to drive both conservation and innovation, the Bush administration essentially subsidized fossil fuel burning automobiles. The result, our energy industries are desperately behind, and our automotive industry is almost a decade behind in thinking about alternative energy.
Fifth, Wall Street and Banking. For 8 years there has been a dramatic expansion in the services and fast consolidation of what had been separate and in some cases regulated industries. As banking, brokerage, insurance, and financial services companies acquired and merged - the speed of these transactions far exceeded the regulatory ability or resources (not by accident) resulting in such things as credit default swaps that now even seasoned wall-streeters say were hard to understand.
The Bush Recession isn't the result of a single bad decision, or even actions out of our control. For 8 years we've allowed a handful of private industries to operate without oversight or review, with a focus on short term gains, as environmental and world economic issues have loomed large.
The Obama administration will face all the known issues that were the underpinning of the Bush Recession, as well as the need to manage and respond to the emerging crisis. So to suggest that a mere 24 months from the start of his administration, Obama and his Cabinet should be able to show enough progress to push back a full on frontal assault from the Republicans is beyond optimistic, it is impossible. The Republicans have made it clear by voting en-mass against the Stimulus Plan that they are positioning their party to run against Obama - and to essentially do what they can to blunt any potential progress or improvement in the conditions for average Americans that might be held up as a success for the Administration. This kind of partisan politics comes at the expense of average Americans and the country itself. To suggest that after spending 8 years building the largest government, the least oversight, and the largest deficit in history, they will run in 2010 on a platform that is against Stimulus and 'small government' is a clue about just how short a memory the Republican's think average Americans have for the condition of the economy.
We shouldn't let this happen.
It is the Bush Recession. We're deep in the teeth of it now. And we'll need to fight to regain economic stability and future prosperity that once seemed like an American birthright. The Bush Recession didn't happen overnight, and it won't be fixed overnight either.
Republicans should take responsibility for the economic conditions they brought on the country. And that means being part of the solution, rather than standing on the sidelines and looking for a 'Rovian' way to misdirect American anger in a cynical attempt to regain power.
Let's call it what it is -- "The Bush Recession."
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