Wednesday, April 20, 2011
George W. Bush calls for backing off government involvement in padding economy: GUILTY!
Bush calls for backing off government involvement in padding economy
Bush defends bank bailout at opening of economic forum in Dallas
Whitman speaks at Bush Institute conference
Bush, Rove, Greenspan, they and their cohorts purposely did all this saying everyone can have everything in this American dream they turned into a night mare. They better be held accountable and should not be allowed to get away with blaming this too on President Obama. They built this house of cards purposely in the bankrupting of America. No apologies my rear!
I will say, I accused Bush from day one of micro mismanaging 100% of every fiasco he purposely created for us while he was widening the gap between the haves and the have not's. Us responsible citizens were having routine heart attacks watching him tell people to buy a house, everyone can have a piece of the American dream. That was BS and we were getting an ulcer.
When I was first starting out I had to get my parents to co sign a loan for a ring so I could get married. You needed 20% down in order to buy a house and Bush through Greenspan fixed it so most Americans were living this lie too and gave everyone a loan regardless of what they earned. They purposely created our housing bubble. We are finally back to responsibility and we are hearing how tough it is on peope now that they must put 20% down. There is a reason why damn it as many found out the hard way thanks to Bush and his cronies.
While Greenspan warned this collapse could be worse than the depression and Bush warned of the severe damage it could cause the country if the bail out is not passed I just want to remind you of what an expert Michael Whitney wrote explaining this set up 4 years ago.
Greenspan successfully piloted the nation into virtual insolvency. In fact, the parallels between our present situation and the period preceding the Great Depression are striking. Just as massive debt was accumulating in the market from the purchase of stocks "on margin", so too, mortgage debt between 2000 and 2006 soared from $4.8 trillion to $9.5 trillion. In both cases the "wealth effect" spawned a spending spree which looked like growth but was really the steady, insidious expansion of debt which generated economic activity. In both periods wages were either flat or declining and the gap between rich and working class was growing more extreme by the year. As Paul Alexander Gusmorino said in his article, "Main Causes of the Great Depression": "Many factors played a role in bringing about the depression; however, the main cause for the Great Depression was the combination of the greatly unequal distribution of wealth throughout the 1920's, and the extensive stock market speculation that took place during the latter part that same decade".
The same factors are at work today except that the speculation is in real estate rather than stocks. Just as in the 1920's the equity bubble was not created by wages keeping pace with productivity (the healthy formula for growth) but by the expansion of personal debt. Also, one could buy stocks without the money to purchase them, just as one can buy a $600,000 or $700,000 house today with zero-down and no monthly payment on the principle for years to come. The current account deficit ($800 billion) could also weigh heavily in any economic shake-up that may be forthcoming. Bob Chapman of The International Forecaster made this shocking calculation about America's out-of-control trade deficit: "US debt was up 10.1% to $4.085 trillion and accounts for 58.8% of all the credit issued globally last year. That means the US expanded credit at a much faster rate than the economy grew. This was borrowing to maintain a higher standard of living and attempt to pay for it tomorrow." Think about that; the US sucked up nearly 60% of ALL GLOBAL CREDIT in one year alone. That is truly astonishing.
There are many similarities between the pre-Depression era and our own. Paul Alexander Gusmorino says: "The Great Depression was the worst economic slump ever in U.S. history, and one which spread to virtually all of the industrialized world. The depression began in late 1929 and lasted for about a decade....The excessive speculation in the late 1920's kept the stock market artificially high, but eventually lead to large market crashes. These market crashes, combined with the misdistribution of wealth, caused the American economy to capsize. "(The income disparity) between the rich and the middle class grew throughout the 1920's. While the disposable income per capita rose 9% from 1920 to 1929, those with income within the top 1% enjoyed a stupendous 75% increase in per capita disposable income A major reason for this large and growing gap between the rich and the working-class people was the increased manufacturing output throughout this period. From 1923-1929 the average output per worker increased 32% in manufacturing. During that same period of time average wages for manufacturing jobs increased only 8% (This ultimately causes a decrease in demand and leads to growth in credit spending)
The federal government also contributed to the growing gap between the rich and middle-class. Calvin Coolidge's (pro business) administration passed the Revenue Act of 1926, which reduced federal income and inheritance taxes dramatically(At the same time) the Supreme Court ruled minimum-wage legislation unconstitutional. On Monday October 21, 1929, the over-valued stock market began its downward plunge. It managed a brief mid-week comeback, but 7 days later on Black Tuesday it plummeted again; 16 million shares were dumped and there were no buyers. The game was over. Confidence evaporated overnight. People stopped buying on credit, the bubble-economy collapsed, and the mighty locomotive for growth, the American consumer, hobbled into the Great Depression. Tariffs were thrown up, foreigners stopped buying American goods; banks closed, business went bust, and unemployment skyrocketed. Tens years later the country was still reeling from the implosion. Now, 77 years later, Greenspan has led us sheep-like to the same precipice. The economic dilemma we're facing could have been avoided if the expansion of personal credit had been curtailed by prudent monetary policy at the Federal Reserve and if wealth was more evenly distributed as it was in the '60s and '70s. But that's not the case; so we're headed for hard times. Mike Whitney the second Great Depression
Bush saying Obama should not be padding the economy is hypocritical, this is his mess. Him and Rove should not be giving advice period.