Yesterday, I watched the Senate Finance Committee question Treasury chief-nominee Henry Paulson. I was expecting a whole lot of Republican ass kissing, as has been common in every other Senate confirmation I've seen of late. Guess what?
Not regarding this economy!
Whatever you may think of Finance Committee members Grassley, Snowe, Baucus, Conrad, or Wyden, let me assure you that this was no Bush administration Congressional kissfest. Republicans and Democrats alike made statements distancing themselves from Bush economic policy. Angry statements. Tax-cuts-do-not-pay-for-themselves, the-Laffer-Curve-is-fantasy statements!
Really! Let's flip...
What I saw was decidedly non-partisan and VERY critical of Bush tax cuts and outrageous deficits and foreign debt. I was shocked! It was almost like... I dunno... an actual, independent, FUNCTIONING CONGRESS!
faint
Of note were those Finance Committee members who weren't there (the part I saw, anyway): Hatch, Lott, Kyl, Santorum, Frist, Rockefeller and Kerry. In fact, the most recognizable Senator there, Democrat Chuck Schumer, came the closest to what I would call ass kissing, while the most critical of the Bush administration was Republican Olympia Snowe! I think I might be in love with her! I can't find transcripts. If anyone can, please link in the comments section.
Now, nevermind that Paulson will be confirmed, probaby unanimously. This was far from a rubber stamp when you consider Paulson is replacing Secretary Snow in hopes the former will do a better "sales job" on Bush's great, thriving economy.
Paulson was pretty much put on notice that the Finance Committee members who bothered to show up didn't think much of Bush's economy. The Republicans didn't. The Democrats didn't. I don't. Paulson was put on notice that this is going to be one tough sales job and he's going to have to lie a lot... which, from the look on his face and from his reputation, he doesn't like doing and isn't very good at.
Look, Democrats, the housing bubble that has been holding this economy up has popped. How important is that? There was 400x the money (at least) in that bubble than was in the Tech Bubble that popped in late 2000. Think. About. That. Lookee at the effect of the MEW (Mortgage Equity Withdrawal) upon Bush's oft-touted GDP!
That chart was borrowed from this excellent article by Barry Ritholtz... read it! Read all his stuff!
Why The Real Estate Slow Down Matters So Much (even the comments section is loaded with creamy economic commonsense goodness)
Anyway, from the chart, we see that without the MEW, we've ALREADY been in a recession for most of the time Bush has been in office. Now the MEW, while not going away, is going to fall off badly. The MEW is tapped out. The MEW is tired. We're going into recession and it will be soon. Bush will do everything he can to float until after November, but even now there are plenty of things Democrats can do to poke holes in this strong economy fantasy.
AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001:
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Yesterday's close:
Dow - 10,924.74
Nasdaq - 2,100.25
S&P 500 - 1,239.20
Note that the DOW is the only one showing ANY progress. Mark my word: the DOW WILL FALL TO BELOW 10,578 BEFORE NOVEMBER!!!! What's that mean? It means that on average, 401K holders would have been better off with their and their employers' contributions going directly into US Savings Bonds for the entire time Bush has been in office*.
Democrats need to encourage people to make this calculation. That's pretty much all they need to do. This works. Will they? Or are they beholding to the same people the Republicans are?
Democrats! Economy! Economy! Economy! Economy! Economy! Economy!
*note: 401Ks do not allow this as it keeps YOUR money out of the greedy hands of the financial services sector
UPDATE: I just remembered that when hammered by Snowe about the total lack of increase in the real wages of MOST working men and women in the USA... the best Paulson could do was to say that
normally and
probably even
hopefully wages would increase FOLLOWING the last three years of record corporate profits. Classic trickle-down doesn't-work been-there-done-that crapolla. Not a very good sales job when you look at that MEW chart. We're heading into a recession. NOW real wages will increase? Please!