ROBB AUSTIN'S TURN
Bush Years in Perspective
June 12, 2008
The state of the economy is shaping up to be the central issue in the 2008 Presidential campaign and whichever candidate gains the confidence of the voters with his economic plan might very well end up being elected President.
Pundits and the media continue to harp that the economy is in dire straits, and this benefits Barrack Obama. But is this really the case? Is the economy that bad and the future so bleak?
Fair-minded people might consider the state of the economy as compared to past years. It was not long ago that President Jimmy Carter hailed his economic accomplishments saying that he was able to cut unemployment by 25 percent. True enough – except unemployment stood at 7.5 percent at the time. Unemployment today under President Bush is 5.5 percent.
There are some other 1980 economic numbers of Carter’s worth looking at. Home mortgage rates were 16 percent; inflation was at 13 percent; interest rates were over 21 percent; gasoline doubled during Carter’s term to $1.40 a gallon; and despite this, he imposed a federal consumer gasoline tax of 10 cents – a large increase at the time.
Amid all the talk of a bad economy we are not in a recession - nor have we been. The last economic recession in this country was March of 2000 – the Clinton recession. George Bush inherited that recession when he took office in January of 2001. The Clinton economy was good for a while but in reality it was a bubble economy - one that came crashing down costing hundreds of thousands of jobs and of billions of stock equity in an ensuing lengthy bear market.
Hardest hit were tech companies such as Cisco, Intel, Oracle, IBM, and many more. This was also when home prices began to soar as sellers found willing dot-com buyers who brought something new to the housing market: stock options. These buyers used their stock options as leverage to borrow money for houses they otherwise couldn’t afford or qualify for. When these buyers later lost their stock options, or had to pay enormous federal taxes on them, many were forced to put their homes back on the market - often at inflated prices and the cycle repeated itself which was the start of the housing bubble.
Fueling the financial crisis during Clinton’s last year in office was Federal Reserve Chairman Alan Greenspan who could not rein things in despite the raising of interest rates to a point of no return – thus totaling snuffing out all growth in the economy. The result was the ensuing stock market crash which cost average investors billions as well as causing massive layoffs as Bush was sworn into office.
This financial chaos was followed by the terrorists attacks on 9-11 which virtually shut the country down for weeks and in some cases months as industries and local governments lost billions. Something drastic had to be done.
Bush did what Presidents Kennedy and Reagan did before him – he cut taxes. His economic plan stimulated the economy and brought the country out of the recession and the start of a seven-year expansion began.
The war in Iraq is a matter to be answered by historians but one thing is certain – the country has not been hit on home soil again and Al-Qaeda leaders are hiding in holes and caves throughout the world. It’s possible that these Bush years are the best of times – terrorism in this country might flourish if future Presidents are too soft. Are we paying too high a price in Iraq. History will be the judge.
As for the current gasoline crisis there’s more to the rising gasoline prices than the charge that the oil companies are manipulating prices - or Bush is taking care of oil ‘buddies.’ Those charges are sophomoric and mislead the public.
The world demand for oil has been massive and no secret dating back for 50 years. The large discoveries of oil in the Middle East have remained unmatched in the history of oil. It’s little wonder prices continue to increase and there’s no relief in sight unless the United States undergoes a massive infuse of nuclear plant construction and all-out aggressive oil searches in difficult environments.
President Bush’s approval ratings remain at an all-time low. Yet I am reminded of public opinion when Harry Truman left office in 1952. The American people would hardly give him the time of day. He was considered one of the worst Presidents of all-time – most thought him to be a fool. Historians however viewed him differently and today Truman is regarded as a model President.
The final analysis of President Bush is also years away and future generations may see him quite differently.
So might historians.