Stock Dive Is Bookend Of Bush Economics

The headline from the world of politics and economics today seems fairly self-evident: in the wake of the House of Representative's failure to pass a bailout package for Wall Street, the Dow dropped by the largest point margin in any single day in history.

But that number told only half the story. Indeed, much of what transpired on Wall Street and in the halls of politics put a bookend on what now seems to the final - poor - chapter of the Bush administration's economic record.

On Monday, the Dow finished lower than when George W. Bush assumed the presidency: 10,587.59 on January 19, 2001 compared to 10,365.45 at its close on September 29, 2008.

NASDAQ, the American stock exchange, too, was lower now than it was when Bush took office: 2770.38 on January 19, 2001 compared to 1983.73 on September 29, 2008. The dollar exchange with the Euro was lower than when Bush was elected: 1.068 on January 19, 2001 compared to .695 on September 29, 2008.

Some things have risen, but not the good economic indicators. The Consumer Price Index was at 175 on January 19, 2001 and 219 by September 29, 2008. Unemployment, meanwhile, stood at 4.2 percent when Bush came into power. Today, it is at 6.1 percent.

"It's a striking phenomenon," said Robert Shapiro, undersecretary of commerce during the Clinton White House years. "The reckless negligence and mismanagement of the country's financial markets by the White House, the Treasury and the Fed over the last several years has now produced a crisis that has wiped out all of the increase in the market value of America's companies from five years of record corporate profits, strong productivity gains, and reasonable growth. Bush has now run the table on presidential failure."

UPDATE: Dean Baker, co-director of the Center for Economic and Policy Research, doesn't disagree with the idea that the economy's struggles are evidence of Bush's failure. He just doesn't think the DOW's fall is the proper measurement.

"I actually consider it a plus,' he said of the tumble. "he stock market was still in a bubble when Bush took office. there is no public interest in an over-valued stock market. We have about 20,000 real measures that we can use to show how bad the economy has performed under President
Bush, the Dow is not one of them.

Comments

[Turnip]

Couric Interview: McCain Says Quoting Palin On Pakistan Is "Gotcha Journalism"


America Says McCain VP Pick is "Lostya Election".

[SLBD]

Yup yup, just like the Iranian Pakistan border farrago.

[Clairvaux]

But it was a very mavericky choice and she's really really ready.

[scooperss]

But she can SEE Russia and Alaska border Canada. WAAAAAAAAH

[Samshade77]

Well he can always say he left it the way he found it.

[SLBD]

This is not Bu-sh's fault!

This is not the re-pugs fault!

Its all due to that nasty Pelosi.

Yup yup,

Bwahahahahahahaha

[RnR]

I don't care for the job Nancy Pelosi has done but to give her all the credit is just not accurate. I'd suspect that the thousands of communications from the voters had a big hand in this, plus, Kucinich said on Democracy Now (way before the vote) that the votes weren't there.

Keep it up people, don't back down. Demand accountability, protection for mortgage holders, a paper trail on the money. Remember...everything is always about the money.

[scooperss]

YUP and everything you listed to keep checks on it.

[mike42nola]

You are correct in saying that everything is always about the money with a few exceptions. Iraq can't be about the money because we are not profiteering from that war in any form or fashion. It has actually hurt our economy.
Desert Storm and the eviction of Iraq from Kuwait was not about the money either because we, American's, have not caught a break on oil prices after going in and protecting the Saudi's from Iraq and evicting the Iraqi's from Kuwait.
World War II was not about money, but rather, it was about principle. Had Chamberlain not tried to deal with Hitler it may not have empowered him to invade Poland, kill millions of Jews and destroy Europe.
Sometimes there are things, such as principle, that are move valuable than money.

[scandals&skeletons]

The bailout: A republican bill a republican President a republican treasury secretary and pushed by senator McC ain while Boehner after begging could only get 40% of his fellow republicans to vote yes.

Yet somehow it is Pelosi & Obamas fault.
These republicans, including McC ain are criminals.

[Shannon2008]

More idiots needed in the Republic party. Please, inquire at www.rnc.org.

[ThunderclapNewman]

Check your sarcasm meter.
It's not working.

[scottowego]

I feel sorry for her. She's in way over her head. McCain has to sit in on interviews and guide her through them. I wonder who will guide her if McCain kicks the bucken while in office? She pretty much sits there looking lost and her answers really don't make sense to me.

[mrJJ]

LONDON (Reuters) - The cost of borrowing overnight dollars on global money markets soared on Tuesday despite central banks pumping billions into the banking system to prevent it seizing up further after U.S. lawmakers' rejection of a $700 billion financial rescue bill panicked markets.

The scramble for cash as banks sought to square their books over the end of the quarter saw the European Central Bank lend $30 billion dollars overnight at a huge rate of 11 percent -- more than five times the Federal Reserve's 2 percent target rate -- and call for bids for an additional $50 billion. Meanwhile, the London interbank offered rate (Libor) for overnight dollars jumped by a record 430 basis points to 6.87 percent, the highest in at least 7-1/2 years.

continued...

http://news.yahoo.com/s/nm/20080930/bs_nm/us_financial_centralbanks

[Gipper44]

10-15 millions pieces of worthless property (as far as I know every-single-one) directly traceable to Franklin Raines "excellent leadership" (Maxine Waters), but FM & FM are not the problem?

Believable.

Raines, Jackson, girelik (sp?) receied bonuses of roughly 200%of their "salary" because they backdated & inflated the "mortgages." otherwise, they would have received no bonus.

Instead of running Obama'a campaign, they should be in jail.

[SCG]

2000 - 2006

[Pronto]

2006-2008 The Pel0si era.

[ThunderclapNewman]

Neither Raines nor the otheres you mention run Obama's campaign.

Raines and Obama aren't even friends.
They've met two or three times.

The problem isn't individual mortgages, you nimrod.

The problem is worthless derivative securities---made possible by Foreclosure Phil Gramm and his zeal to deregulate everything.

[Parkhurst]

Raines was co-opted to be a member of the kitchen cabinet by Obama, along with the other CEO of Fannie Mae, Jim Johnson. Obama also received more from Fannie Mae and Freddie Mac in his four years in the senate than nearly every other senator received in 20 years.

Obama is Wall Street's boy.

[BeyondGoodAndEvil]

Obama said they met once.

[mike42nola]

This isn't about the Presidential election. The problem is that idealist, from whichever party or political affiliation you may want to place the blame on, eased lending restrictions to try to allow more people to become property owners. This in turn led to enormous greed within the lending institutions because they started making great deals of money on loan fees.
People living above and beyond their means ended up defaulting on loans with the lenders now holding title to property that has lost value. Simply holding onto property and not maintaining, developing or doing anything to increase the value creates another cost to the title holders with less income being taken in.
This will ot be solved by all of the HOPE and CHANGE rhetoric of Obama nor will it be solved by all of the partisan bickering of Pelosi. This needs to be solved and resolved by Americans working for the good of America. There are too few of these types of people in the Congress. They work for themselves and for re-election, nothing more. They have stopped representing us as a people and only represent themselves as an elite group of rulers. They have more power than the President and they abuse these powers more often than Presidents abuse their powers.
Pelosi was a really poor choice to lead the HOR and she should be canned as quickly as possible in taking the first step towards reconcilliation and repair of our economy.

[Shannon2008]

My question is "How is debate camp going?" Is our little fighter ready to solve the global financial crisis?

[scooperss]

YUp fixing health care will take care of the financial markets and she can see Russia and Canada shares a border and the bailout must pass and we should go into Pakistan and voters asking questions are gotcha question.......

HEY NOW, was that a GOTCHA question from you?

[Turnip]

Banker Leaps In Front Of Train, D ies.

Meanwhile, Dic kChinney breakfasts contentedly on tea and scones at his undisclosed location in Dubai.

[dutchman]

I can understand people being emotional over this, but we have to remember that we are dealing with the aftermath of a burst real estate bubble - the largest in history - and like every bubble before it, those who helped finance it are the first victims. Once there's a run on a financial institution, there's almost nothing management can do to save itself. Our collective greed - and then panic - is far more responsible for companies like WAMU and AIG being in dire straights than anything else, including their own contributions to this mess.

While we should point a finger of blame on those who invested recklessly in mortgage securities, we really have to look at the mirror if we want to see everyone responsible. It's an unpleasant truth, but if you bought a home in the last five years thinking it would go up in value indefinitely, you were part of the problem.

We should punish the mortgage brokers who sold loans without caring if they would ever be repaid.

We should punish those individuals that have been shown to have breached their fiduciary duties, committed fraud or otherwise broken the law.

And we should demand greater transparency so that regulators can see where the systemic risks lie.

But none of these things will prevent another bubble. This is a textbook case of the "madness of crowds". This is what happens when you have a bubble to which many people are exposed.

[LouisvilleLiberal]

I didn't buy a home in the last 5 years and ten years ago, the home I bought came with a fixed rate mortgage I could afford. I paid extra points to get the interest rate down below 6%.

Why should I have to participate in the bursting of this bubble? I don't want to sell my home and don't really want it's value to rise as that increases my taxes and insurance. This is my home and I want to live here.

The people who took bankers up on more money than their house was worth at interest rates lower than the rate of inflation were speculating. I accept that some innocent home buyers were tricked since it's impossible to read all the documents they make you sign at closing (there is the first place reform would help, time to have a lawyer review the closing documents before you sign them), but I cannot accept that bankers didn't know how risky these investments were.

This is like a game of hot potato where the bad investments are passed around until the music stops. The guys with the hot potato are screwed.

I think they need to take their losses and we need to be a little more rational before we invent another "bubble".

[scottowego]

It's a little difficult not to panic when these companies keep coming out with billion dollar losses.

[scandals&skeletons]

The bailout: A republican bill a republican President a republican treasury secretary and pushed by senator McC ain while Boehner after begging could only get 40% of his fellow republicans to vote yes.

Yet somehow it is Pelosi & Obamas fault.
These republicans, including McC ain are criminals.

[LemonMeringue]

This drop in the Dow is Bush's fault.

A president should stand up before the country and scare everyone into believing disaster will strike if his wish doesn't get fulfilled. That fearmongering was not presidential. It was his job to calm the people and the market.

[SCG]

That's how Bush operates, threats and fear, since day one.

[breakingnews]

And when this all goes down the shi-tter in the next few months and hundreds of thousand lose their jobs, I fully expect you and your kind to be in here asking why no one told you how dire the situation was.

[Shannon2008]

The markets are a little smarter than joe blow public. I think they know a little thing or two about the economy. It's the House Republicans fault and shows a lack of leadership on John McCain's part. He was out there saying the same thing as the President.

[Shannon2008]

The markets are a little smarter than public. I think they know a little thing or two about the economy. It's the House Republicans fault and shows a lack of leadership on John McCain's part. He was out there saying the same thing as the President.

[Pulemerci]

While this crisis happened on Preiden't Bush's watch, he should be held accountable. However, The seeds of this crisis were planted in the 90's when lax mortgage lending at Fannie Mae increased at an enormous rate. Franklin Raines was in charge of Fannie Mae at the time.

After serving as OMB Director, Raines returned to Fannie Mae to become its chairman in January 1999. In that position, he pursued President Clinton's housing policies, including expanding sub-prime lending and reducing long-established financial barriers to mortgage lending for low-income borrowers.

Raines began almost immediately to make it easier for low-income borrowers to get home loans, even if they demonstrated poor credit or paltry assets.


Guess what happend years later?

[breakingnews]

People lost their jobs....................

[ThunderclapNewman]

You're quite the eager tool, aren't you?

[Meggie]

Were you paying attention in 2002 and 2003 when Bush made a huge play for lower income people to get loans? He gave a lot of speeches and a little research will find them.
BTW, in my area the foreclosures are on lower income people. The people who bought McMansions, just couldn't be seen in the house they could really afford, are the ones at fault. And there are a LOT of teardown/McMansions here. These are not poor people and this is a heavily repub county.
At the end of yesterday, the Dems came through with more than half voting for the bill that would once again bail out Repubs with taxpayer money. I'm glad it failed and I hope that the meltdown the House Repubs seem to want is what they get. Americans apparently need a full taste of Repub policies and what really trickles down on them when Repub policies are allowed to go unchecked.

[Pulemerci]

Pelosi is the weakest Speaker in recent memory. She accomplishes nothing.

[scandals&skeletons]

hmm

[kdublya]

I demand a commission to look into the failed bailout.

Post haste!

[iLLogicaL]

All this just reinforces my notion that most of the economic gains reported over the past 8 years in GDP growth were illusions. The financial and medical sectors posted most of the growth, so our economy is growing on the back of increasingly expensive medical care and increasingly complex financial 'products'.

We have built a house of cards and now the wind is blowing.

[TheRightVoice]

Here is the nasdaq chart the last year of Clintons presidency. Won't see this on TV.



http://bigcharts.marketwatch.com/advchart/frames/frames.asp?symb=nasdaq&time=13&freq=2

[comacoma]

You gonna vote for Reagan again too? Get with the program.. it's 2008.

[TheRightVoice]

Than why do you guys always bash Bush. He's not running.

[BeyondGoodAndEvil]

It was an internet bubble. So what? If you look at the entire eight years of Clinton's presidency, people profited from the markets. In 8 years of a Bush presidency, people have lost money. Only the crooked have become rich in the last 8 years. War profiteers, big oil, lobbyists, crooks on Wall St.

The disparity between the very rich and the middle class has grown. The middle class is disappearing and the Republicans don't give a da.mn.

The entire economy is collapsing thanks to disastrous Republican economic policies.

Republicans can't manage the economy. They just want to r.ape and pillage the taxpayer coffers when they're in power.

[reliant1]

Reuters
2008-09-27

Chinese regulators have told domestic banks to stop interbank lending to U.S. financial institutions to prevent possible losses during the financial crisis, the South China Morning Post reported on Thursday.

The Hong Kong newspaper cited unidentified industry sources as saying the instruction from the China Banking Regulatory Commission (CBRC) applied to interbank lending of all currencies to U.S. banks but not to banks from other countries.

"The decree appears to be Beijing's first attempt to erect defences against the deepening U.S. financial meltdown after the mainland's major lenders reported billions of U.S. dollars in exposure to the credit crisis," the SCMP said.

woooo hoooooooooooooooooo

and so it begins. Our biggest lender just shut us off. The rest will follow.

[breakingnews]

They have followed. No matter what the House and Congress does not will not matter, they had ONE shot at this and they BLINKED!

[larazon]

Please the woohoo is not appropriate. This is a tragedy in the making. I know everyone is angry with the Republicans for running this country into the ground but we should not rejoice at what's coming only at seeing every Republican be wiped off the political map in November.