On Bill Clinton's first inaugural day, the DJIA was at 3310. The market was 6813 when he was next inaugurated. At the end of Clinton's second term, on the day Bush took office, the DJIA was at 10,578; that is the market Bush inherited from Clinton.
When Bush left the Oval Office on January 20, 2009, the Dow was at 7,949, a decline of 25% over the eight years Bush was president. By March, the DJIA had completed its tumble to bottom out with a 12-year low at just over 6500. Republicans blamed Obama for the continuing decline from 7,900 to 6,500 during his first month in office, but not Bush for the loss from 10,600 to 7,900 in eight years as president. About one year later, the Dow hit 11,000. The stock market doubled in value during Obama's first 14 months in office. Republicans no longer mention "Obama's economy."
To understand this strange silence from the GOP, we have to go back to some recent history. Barak Obama assumed the office of the presidency on January 20, 2009. On that day, after eight years of failed Republican rule, he inherited from George Bush, as we know painfully well, a collapsing economy, a financial system in near ruin, a stock market spiraling steeply downward, our most important industries in bankruptcy and a federal deficit and debt spinning out of control. Bush left office after presiding over "one of the fastest accumulations of government debt in the history of the United States" according to The Christian Science Monitor. That conservative publication properly noted that under Bush the federal debt increased by more than 50% to nearly $5.5 trillion, up from $3.3 trillion when Bush took office.
Blaming Obama for the collapsing economy and declining stock market he inherited was particularly strange as we emerged from the dark cloud of the Bush Administration. Remember that George Bush complained for eight years that every economic woe over which he presided was Clinton's fault. He claimed in a speech at a Mississippi high school in August 2002 that, "When I took office, our economy was beginning a recession."
This is a classic example of the Big Lie, an untruth repeated so frequently that people accept the falsehood as real. What he actually inherited from Clinton was, at worst, a mild reduction in growth following eight years of historic economic expansion. That conclusion is not mine, but that of National Bureau of Economic Research (NBER), a non-partisan organization that is considered the definitive word on business cycles. Here is the NBER November 26, 2001 report:
"The NBER's Business Cycle Dating Committee has determined that a peak in business activity occurred in the U.S. economy in March 2001. A peak marks the end of an expansion and the beginning of a recession. The determination of a peak date in March is thus a determination that the expansion that began in March 1991 ended in March 2001 and a recession began. The expansion lasted exactly 10 years, the longest in the NBER's chronology."
Be clear about this; Clinton presided over the longest expansion recorded, and when he left office that momentum carried the economy forward to a peak in March 2001, into the first month of the Bush presidency. Bush took office January 18, 2001. But the Bush debacle is nevertheless all Clinton's fault even though no president in modern history ever inherited an economy as healthy as what Bush got from Clinton.
But let us say that Bush's false assertion was right, and that he became heir to a recession from Clinton. Bush's claim is that by inheriting such a problem, he escaped responsibility for the economic collapse over which he presided for nearly a decade. By this logic, a president inheriting a recession, then is not to blame for the economic ills that occur during his presidency, even if two terms. In a 2004 speech in Colmar, PA, now half-way into what would be his full tenure, Bush still blamed the Clinton administration for the loss of hundreds of thousands of manufacturing jobs. Specifically, Bush claimed that, "In the last six months of the prior administration, more than 200,000 manufacturing jobs were lost. We're turning that around." Four years later he was "turning that around." (What he conveniently failed to mention is that the economy had lost 913,000 jobs since Bush took office in January 2001). This idea that all economic ills could be laid at Clinton's feet was enthusiastically endorsed by Cheney and prominent Republicans at every possible opportunity.
Even as he was walking out the door of the Oval Office, Bush blamed Clinton for Wall Street's collapse in a final attempt to push his failures onto his predecessor. Said Bush, "I think when the history of this period is written, people will realize a lot of the decisions that were made on Wall Street took place over a decade or so" before he became president. Bush simply took no ownership or responsibility for the economic decline and near collapse that happened on his watch.
By Bush's own formulation, then, Obama should blame Bush for all of the country's economic woes during the entire tenure of his presidency. Republicans should accept this assessment without question. After all, that is what Bush did to Clinton with full Republican support. Obama's position in assigning blame to his predecessor is in fact much stronger, for what he inherited from Bush is vastly more onerous than what Bush was gifted from Clinton. Bush inherited a reduction in growth while Obama was bequeathed an economy on the verge of catastrophic collapse.
Surely, with this history so recent and clear, Republicans must now blame Bush for any economic decline under Obama just as Bush blamed Clinton. But no. With jaw-dropping, surreal, outrageous, unbelievable hypocrisy probably never before matched in scope and breadth, by the first week of March 2009, just over one month into the Obama presidency, Republicans were blaming Obama for the dire economic news. For eight years under Bush any bad news was Clinton's fault; just one month into Obama's presidency, Bush was innocent of all blame. We do not have a vocabulary that can capture the deep absurdity of this assault on reason. I challenge anybody to come up with a widely held political assertion more outrageous. In my lifetime this claim of relative responsibility between Obama and Bush for the failing economy when Obama took office is unmatched in raw cynicism and total detachment from reality. We have never come closer to actually experiencing Orwell's eerie Doublespeak.
Republican statements about Obama in early March 2009 are stunning in their duplicity. Obama is to blame after five weeks, but George Bush is free of any responsibility after eight years. Let's take a quick look at right wing publication headlines at as the new Administration settles in:
•Bloomberg.com (March 6): "Obama Bear Market Punishes Investors as Dow Slumps." In this article the claim is further advanced with, "President Barack Obama now has the distinction of presiding over his own bear market."
•Wall Street Journal (March 6): "Obama's Radicalism is Killing the Dow." Author Michael Boskin prognosticates that, "It's hard not to see the continued sell-off on Wall Street and the growing fear on Main Street as a product, at least in part, of the realization that our new president's policies are designed to radically re-engineer the market-based U.S. economy, not just mitigate the recession and financial crisis."
•Perhaps most astonishing of all, John Tanny of Real Clear Markets, wrote on November 25, 2008, that an article entitled, "This Is Obama's Market, Good and Bad." Obama was not yet president! That did not stop Tanny from writing that, "Lacking clarity, investors can only guess about what's ahead based on Obama's decidedly anti-business rhetoric used during the campaign. Whatever direction he takes, it should be clear that today's stock market is the Obama stock market, so it's up to him to decide its basic direction." Even though Obama was not yet president.
Perhaps you counter that a president-elect can influence the market by what people fear and hope he will do when he takes office. Even if you believe that to be true, the logic would apply equally to Bush following Clinton as well as Obama following Bush. That means, using the logic of anticipation, that the recession that Bush claimed to inherent would be Bush's fault for frightening the market before he became president. He did after all pound away at how bad the economy was during the campaign.
Republicans are now doubling down on crazy as the Dow continues to boom more than a year into the Obama presidency, up from the 8000 he inherited from Bush, and up more than 100% from its 12-year lows in March and April 2009. After calling this Obama's economy even before Obama took office, where are the conservative publication headlines now claiming that this is now, still, Obama's economy? Let's look at the headlines about Obama as Dow hits 11,000:
Bloomberg.com: nothing
Wall Street Journal: nada
Drudge report: zilch
Listen to the loud roar of silence. Cup your ears and you will hear nothing about the DJIA doubling from its low from early 2009; no screaming headlines that say, "This is the Obama stock market" when it hit 11,000. Why not? After all, Obama was blamed for a declining stock market before he even assumed office. But now that he is actually president, Obama gets no credit. Alright, everyone, all aboard the crazy train.
In summary, Clinton is offered no recognition for his eight years of economic prosperity, Bush gets a pass on creating the worst crisis in generations, and Obama is to blame for everything. As a bonus, as Obama's policies lead to a recovery from the Bush debacle, the expansion will be credited to Bush. Would life not be grand if we could each take credit for our accomplishments, claim the success of others as our own, and blame others for all our failures? The GOP exists as a political party because it offers people just that fantasy. This ability to create a parallel universe in which true is false and false true seems to be the GOP's greatest strength, attracting those who are comfortable living in a dream world unconstrained by reality. Nothing proves that contention more than Republican statements calling the economy "Obama's" prior to his inauguration, and then giving him no tribute for progress during his actual term, when his every action was opposed by Republicans.
Enter for a moment this twisted fantasy world of the GOP: a Democratic president's success is due to the policies of his Republican predecessor, and his failures are a consequence of his own policies. A Republican president's success is due to his own policies and his failures are a consequence of the policies of his Democratic predecessor. That world view, that conclusion, that claim is mind boggling. More so that even one single human being could possibly believe such obvious absurdity or ignore such inherent inconsistency. That many do is the worst form of collective insanity. The other side has Gone Outright Psychotic.
Obama took bold, decisive action the moment he assumed power to stave off a depression. Bush's legacy presented Obama with a terrible, horrible choice: massive deficit spending or economic collapse. He had to choose one or the other. Obama wisely went the former, no matter how painful. Obama moved forward with virtually no Republican support. With partisanship so clearly defined, we have no ambiguity about who is now truly responsible now for our nation's economic future. If time proves Obama's actions successful, he rightfully can claim full credit. Failure will be his too.
This is Obama's economy for better or worse. Republicans are simply not honorable enough to admit that fact, fearing Obama's success. The GOP is selling our country short, betting against our future, hoping for failure. And they call themselves patriots.