Some of you may remember our last recession. George W. Bush and Dick Cheney first begin pushing the idea of a recession in early 2000, with the help of Alan Greenspan raising interest rates 6 times that year. You might also remember that the stock market bubble burst later that year.
The newly elected president wanted to be able to blame the Clinton administration for the recession that would happen. We’ve heard many times over the past 7 years President Bush say he "inherited a recession". Technically, the recession happened during Bush’s first year. The National Bureau of Economic Research, the recognized arbiters for dating recessions, says started in March 2001 and ended that November. The definition of a recession is normally two consecutive quarters of decline.
Now we’re hearing words such as, "the economy has slowed down but I don’t think it’s a recession". The White House and congressional leaders recently agreed on a multibillion-dollar proposal to try and help a housing slump, a credit crisis and high energy prices. The stimulus rebate checks won’t be in the mail till May of 2008.
I am not an expert on economics but I’m predicting that there was a recession; but it’s almost over now. I’m betting it started in 2007 and will end this April.
Stay with me now. So, if the recession will soon be over, why is our government still talking about one ‘might happen’ and why will Americans be receiving checks when it’s already too late?
Elementary my dear, politics.
Pushing the idea of a recession, gives the Democrats, what they precieve as an opening to attack the Republican Party with. However, less than four months after receiving the rebate checks from the Bush administration (twice now), the Republican Party will hold their convention to elect their nominee, John McCain, for President. Election Day is just a little over a month away from that time. What’s the best way to get voters attention? Give them money (tax cuts). By September the economy should start to look a lot better too – throwing the Democrats off their game.
What is the other big worry of voters? The war in Iraq. Ask yourself the following questions: Why has General Petraeus pushed back his original date to begin withdrawing the surge of troops
again to September (a little over a month before Election Day)? Why would the Bush administration be ‘suggesting’ a slow down in the econmy when the recession is almost over?
Answer: Give the Democrats nothing definitive to push during their Convention in August. Will it be the economy or the war in late October? Everybody in politics knows the message is usually just one topic. Push that message and push hard, they say.
Not knowing if the economy will still be in a slump and not knowing what General Petreaus will say in September, leaves the Democratic Party in quagmire. The timing also leaves them very little chance to correct their talking points.
Meanwhile, during the Republican Party’s convention in September you will hear the following from John McCain and the GOP: The Economic Stimulus package that included the GOP’s second tax cut to the voters, "worked my fellow Americans and over 20,000 troops will be home by this Thanksgiving (leaving off of course the fact that we will continue to have the same amount of troops in Iraq as we did in early 2007)".
What will the Democrats message be then?