PeakTrader.com Forum Index PeakTrader.com
Economics, Portfolio Optimization, and Technical Analysis
 
 FAQFAQ   SearchSearch   MemberlistMemberlist   UsergroupsUsergroups   RegisterRegister 
 ProfileProfile   Log in to check your private messagesLog in to check your private messages   Log inLog in 
Log inFast Charts

The Misunderestimated President - The Bush Record

 
Post new topic   Reply to topic     PeakTrader.com Forum Index -> Economic Review
View previous topic :: View next topic  
Author Message
administrator
Site Admin


Joined: 28 Dec 2005
Posts: 10287

PostPosted: Mon Aug 22, 2011 10:48 pm    Post subject: The Misunderestimated President - The Bush Record Reply with quote

Updated Jan 2015

“In terms of the economy, look, I inherited a recession, I am ending on a recession.” –George W. Bush, Washington, D.C., Jan. 12, 2009

The “Misunderestimated” President and the long boom of 1982-07:

Bush inherited the worst stock market crash since the Great Depression and a recession. However, the Bush Administration turned the recession into one of the mildest in U.S. history (which wasn’t a recession based on annual per capita real GDP growth), after the record economic expansion and structural bull market from 1982-00.

Over a five-year period in the mid-2000s, U.S. corporations had a record 20 consecutive quarters of double-digit earnings growth, two million houses a year were built, 16 million autos per year were sold, U.S. real GDP expanded 3% annually, in spite of 6% annual current account deficits (which subtracted from GDP).

The U.S. economy was most efficient, while Americans stocked-up on real assets and goods, and capital was built-up. It was one of the greatest periods of U.S. prosperity, the fourth longest economic expansion in U.S. history, and in a structural bear market that began in 2000.

****

The 2001-07 expansion was built upon the 1995-00 boom, when actual output exceeded potential output, along with the entire 1982-00 boom, and on top of a mild recession.

Living standards improved at a steep rate in the 2001-07 expansion, because the country was at or near full employment, while the U.S. consumed up to $800 billion a year more than it produced in the global economy.

And, you can’t blame the housing boom/bust cycle entirely on Bush. There’s lots of blame to go around, including for Clinton and Congress.

---

dilbert Dogbert:

PT, Can I have some of what you are smoking???

---

PeakTrader:

dilbert, you already smoked too much over the past six years.

If it makes you feel any better, Krugman was correct that we need a bubble in a depression.

You can praise the Fed’s QEs later.

---

The Rage:

That wasn’t the worst “stock crash” in American history, not even close. Thanks to the Y2K and speculation, the market was in nominal terms overvalued, but in real terms, not that big of fall. Bush overreacted to a correction as did all of Neo-Con-dom.

---

PeakTrader:

I stated it was the worst stock market crash since the Great Depression (up to that time).

The S&P 500 lost about half its value between 2000 and 2002.

Does it matter much if its nominal or real when you lose half your value?

I guess, you’re saying, for example, if your income rises from $20,000 to $100,000 and then falls to $50,000, it’s no big deal, because it shouldn’t have risen to $100,000 Smile

---

Updated Apr 2012

The “Misunderestimated” President:

Bush inherited the worst stock market crash since the Great Depression and a recession. However, the Bush Administration turned the recession into one of the mildest in U.S. history (which wasn’t a recession based on annual per capita real GDP growth), after the record economic expansion and structural bull market from 1982-00.

Over a five-year period in the mid-2000s, U.S. corporations had a record 20 consecutive quarters of double-digit earnings growth, two million houses a year were built, 16 million autos per year were sold, U.S. real GDP expanded 3% annually, in spite of 6% annual current account deficits (which subtract from GDP).

The U.S. economy was most efficient, while Americans stocked-up on real assets and goods, and capital was built-up. It was one of the greatest periods of U.S. prosperity, the fourth longest economic expansion in U.S. history, and in a structural bear market that began in 2000.

The Bush Administration was adept at minimizing the recession in 2008, including providing a tax cut in early ’08 for the Fed to catch-up easing the money supply, until Lehman failed in Sep ’08, which caused the economy to fall off a cliff. However, appropriate policy adjustments were implemented quickly.

If Bush could’ve been reelected and had his way, the U.S. would’ve completed a recovery in 2010, and we’d be in a strong disinflationary expansion instead of this on-going depression and “train wreck.”

******

The Republicans not only failed to defend the Bush record, they also failed to explain how the Democrats created the economic conditions that lead to the financial crisis.

People forget Bush inherited the worst stock market crash since the Great Depression (from 2000-02).

Yet, the 2001 recession was so mild, it wasn't a recession based on annual real per capita GDP growth (because of the Greenspan Fed and Bush tax cuts).

After a record 10-year economic expansion in the '90s and a structural bull market from 1982-00, the U.S. had the greatest years of prosperity from 2002-07.

U.S. corporations had a record 20 consecutive quarters of double-digit earnings growth, two million houses a year were built, 16 million autos per year were sold, U.S. real GDP expanded 3% annually, in spite of 6% annual current account deficits (which subtract from GDP).

The U.S. economy was most efficient, while Americans stocked-up on real assets and goods, and capital was built-up.

The Bush Administration was adept at minimizing the recession in 2008, including providing a tax cut in early '08 for the Fed to catch-up easing the money supply, until Lehman failed in Sep '08, which caused the economy to fall off a cliff. However, appropriate policy adjustments were implemented quickly.

If Bush could've been reelected in 2008, we would've had a V-shaped economic recovery, much like the Reagan recovery after the severe recession from 1982-83.

I agree with Paul Krugman that a housing boom was needed to raise actual output towards potential output.

However, once the country was at full employment, around 2004, lending standards should've been slowly tightened to sustain the economic expansion and prevent the financial crisis.

Bush Administration Tried to Reform Freddie and Fannie Five Years Ago
CBS News
February 19, 2009

Karl Rove, “We were briefed as far back as 2001 about the problems with Fannie and Freddie; in fact, we moved aggressively in 2004 to regulate Fannie and Freddie, actually got a bill through the Senate Banking and Finance Committee only to have it filibustered by [Sen.] Chris Dodd.”

Rove said Fannie Mae and Freddie Mac “accelerated their imprudent behavior after we attempted to regulate them. They bought almost as much mortgage debt from 2005 through 2008” as they bought in their first 30 years of their existence.

“In fact, in 2003, when we sent our first members of the Cabinet up to talk about this on Capitol Hill, Barney Frank had a hearing in which they basically beat up everybody we sent up there in pretty vociferous language. This is the famous hearing where one of the Democratic members literally says that he is ‘pissed off’ that the administration is even raising this issue,” Rove said.

Debate:

http://www.blogger.com/comment.g?blogID=28997633&postID=4701800078420351300
Back to top
View user's profile Send private message
Display posts from previous:   
Post new topic   Reply to topic     PeakTrader.com Forum Index -> Economic Review All times are GMT - 8 Hours
Page 1 of 1

 
Jump to:  
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum


Powered by PeakTrader 2.0.8 © 2001, 2002