I received the following viral email from an old Army buddy that I am still in touch with (amazingly) since I retired seven years ago. The version I got was in large letters and in different colors to highlight the talking points. I’m sure that most everyone has gotten similar mailings. This one motivated me to doing some digging about the economic reality of Bush first few years.
Here’s the letter after the jump:
George Bush has been in office for 7 1/2 years. The first six the economy was fine.
A little over one year ago:
1) Consumer confidence stood at a 2 1/2 year high;
2) Regular gasoline sold for $2.19 a gallon;
3) the unemployment rate was 4.5%.
4) the DOW JONES hit a record high--14,000 +
5) American's were buying new cars, taking cruises, vacations overseas, living large!...
But American's wanted 'CHANGE'! So, in 2006 they voted in a Democratic Congress and yes--we got 'CHANGE' all right. In the PAST YEAR:
1) Consumer confidence has plummeted ;
2) Gasoline is now over $4 a gallon & climbing!;
3) Unemployment is up to 5.5% (a 10% increase);
4) Americans have seen their home equity drop by $12 TRILLION
DOLLARS and prices still dropping;
5) 1% of American homes are in foreclosure.
6) as I write, THE DOW is probing another low~~
$2.5 TRILLION DOLLARS HAS EVAPORATED FROM THEIR
STOCKS, BONDS & MUTUAL FUNDS INVESTMENT
PORTFOLIOS!
YES, IN 2006 AMERICA VOTED FOR CHANGE...AND WE SURE GOT IT! ...
REMEMBER THE PRESIDENT HAS NO CONTROL OVER ANY OF THESE ISSUES, ONLY CONGRESS.
AND WHAT HAS CONGRESS DONE IN THE LAST TWO YEARS, ABSOLUTELY NOTHING.
NOW THE DEMOCRATIC CANDIDATE FOR PRESIDENT CLAIMS HE IS GOING TO REALLY GIVE US CHANGE ALONG WITH A DEMOCRATIC CONGRESS!!!!
JUST HOW MUCH MORE 'CHANGE' DO YOU THINK YOU CAN STAND?
My reply:
Although I know that you have good intentions, some of the statements in the email just aren’t true, particularly this one: George Bush has been in office for 7 1/2 years. The first six the economy was fine.
First of all, from the start of Bush’s term in 2001 through 2005, there were a total of 893,000 new jobs created, 917,000 in the public sector, and a loss of 24,000 jobs in the private sector. No other president since the Great Depression has had a net loss of private sector jobs through 52 months in office. During the same time period middle-class Americans suffered through stagnant or declining real wages and vanishing benefits while CEO pay continued to rise.
From the USA Today, February 6, 2005:
"Present employment levels show only 119,000 more individuals working than when Bush took office in 2001, which is effectively a decrease in employment rates, as the total civilian labor force grew by more than two million workers in 2004 alone, according to the Department of Labor. Additionally, the most recent data from the Census Bureau show that the average income for middle-class households has dropped by $1,525 since its peak in 2000. The labor force participation rate—the percentage of people either working or looking for work—fell in Jan. 2005 to a seasonally adjusted 65.8 percent, the lowest rate since 1988."
From the time Bush took office until June, 2005, a total of 2.8 million jobs were lost in the manufacturing sector. (U.S. Department of Labor, Bureau of Labor Statistics) These jobs went overseas and aren’t likely to return. As of June, 2005, manufacturing employment was at its lowest level in 50 years. The Republican controlled Congress turned their backs while the multinational companies shifted jobs overseas.
If you think that the first six years of the Bush administration’s economy was "fine", then you need to take a closer look.
As far as congress’ effectiveness goes since the 2006 election, there have been more filibusters or votes to cloture in this session than any other in the history of the United States. The Senate Republicans have obstructed every piece of legislation that would benefit the middle-class and the issues you have noted in your email. So the real change that came about in 2006 is a Senate that attempts to solve our problems on one side (Democrats), but is blocked by obstinacy and ideology on the other (Republicans).
Finally, the cause of today’s market crash is directly a result of the passage of the $384 Billion omnibus spending bill shortly after Bush was elected. Senator Phil Gramm clandestinely slipped a 262 page amendment that very few Senators had read into the bill that was called the Commodity Futures Modernization Act. The essence of the act was the deregulation of derivatives trading (financial instruments whose value changes in response to the changes in underlying variables; the main use of derivatives is to reduce risk for one party). The legislation contained a provision -- lobbied for by Enron, a major campaign contributor to Gramm -- that exempted energy trading from regulatory oversight. Basically, it gave way to the Enron debacle and ushered in the new era of unregulated securities. Since the passage of this bill the economy has been in a state of experimentation of deregulation. This has ultimately led to the current market upheaval and it was all created in a Republican controlled Congress.
Thanks for sending me the email. I enjoy doing the research. It’s wonderful that we can live in a country that allows us to disagree without being disagreeable. I mean that in the warmest way. Being on the opposite side of this bus we are all riding shouldn't distract from our friendship. Write soon.