One year ago I wrote a post entitled, seven years of the Bush economy.
Well, today it's time to update and close the book on it. Of course there are those who will point out that eight years ago today the economy was slowing down and heading towards a recession and they are right. But it is hardly like the economy that George Bush is handing the keys to, to Barack Obama is a model of stability. In fact if anything the numbers look much, much worse today than they did eight years ago. But so be it. Fairly or not, January 20th is more than just a symbolic date. It is the day in which total control over the Presidency passes in its completeness from one President to the next. And so, let's look at the same metrics we did a year ago: the stock market, the dollar/euro exchange rate, net job creation, the spot price of oil and the national debt.
The stock market closed on January 20, 2001 at 10,587.60. It's last close before January 20, 2009 is 8281.22. I will update this number tomorrow so we have consistency and post it as the final number for Bush (or start of Obama.) HERE IS THE UPDATE: IF I USED IT CONSISTENTLY WITH THE WAY I USED THE 1/20/01 CLOSE, IT WOULD BE 7949.09. BUT EVEN IF WE KEEP THE OLD NUMBER the stock market under Bush has fallen a net 22% over the past eight years. AND YES, IT DID NOW CLOSE AT 7949.09. FROM NOW ON IT'S OBAMA'S MARKET. If it's still below 8,000 by 2012 you are welcome to stuff this post back in my face. But I expect him to succeed and it will go up significantly from 7949.09 by then.
And 22% in eight years is enough that Bush apologists can't blame it on the 2002 recession, Clinton's economic policies or 9/11. The truth is, if you were heavily invested in the U.S. stock market in 2001, you probably have lost money. And the decision by Congress not to tie Social Security to the stock market looks to have been a very wise one. T-bonds may be boring, but they haven't lost money.
On January 20, 2001 it cost $.94 to buy one euro (in fact it got as low as eighty-three cents later on that summer.) Right now it costs $1.32 to buy one euro. True that this is better than the price of $1.45 that it was a year ago, but it is a fact that you would have made just better than a 40% profit over the past eight years if you had at the start of the Bush administration simply traded all your dollars in for euros and hidden the euros in your mattress. A lot better than losing 22 percent in the stock market.
Over the course of eight years, George W. Bush presided over the net creation of 3.8 million jobs. This averages out to less than 40,000 per month (vs. an average of over 200,000 per month over the preceding eight years.) Again, Bush apologists like to not count the loss of 2.8 million during the first two years of the Bush Presidency, and blame that on Clinton. But if it is then what would they say about current projections that the U.S. could lose even more than that many jobs over the next two years, and if it doesn't it will likely be due to government jobs created under the Obama stimulus plan? Again-- January 20 is the day of the handover. Any other date you choose to compare is arbitrary-- but then you take ownership of that much of the coming economy as well. Further, even using numbers from the truncated middle part of the Bush administration when we were not in a recession-- about 8.5 million created in four years, Bush still falls short of the monthly average over all eight years of the Clinton administration. No matter how you slice it, the Bush economy did very poorly in terms of job creation.
Price of crude oil: Was $25.98 per barrel eight years ago, and is $34.20 today. This is the one number where Bush is much better off today than he was last year. And if it had simply increased from $25.98 to $34.20 in eight years I'd be the first one to say the President Bush deserved credit for keeping oil prices under control. Only, he can't get credit for that since as recently as this summer it was pushing above $140 a barrel, and the resulting record gasoline prices delivered a hammer blow to an already soft economy over the summer. Further, much of the decline is credited to falling demand caused by the fact that millions fewer people are on the road going to work, because they don't have jobs to go to. The wild price gyrations have also played havoc with everything from the energy resale markets to automobile sales.
The national debt has increased from 5.8 trillion dollars to (including bailouts): 11.8 trillion dollars. In other words, it has more than doubled. Or in other words, Bush ran up more accumulated debt than every President combined from George Washington through his father (the reason I don't include Clinton in that is because the national debt actually experienced a slight decline under Clinton.)
Of course another dodge that Bush apologists often use is to argue that the President and his administration don't really have much effect on the economy. That is of course ridiculous. Even ignoring the fact that trillions of dollars in spending are controlled by the Government, some Government policies that influence the economy include tax policy, monetary policy, energy policy, trade policy, labor policy, regulatory policy and immigration policy. Funny to hear conservatives who scream about how bad tax increases, minimum wage hikes or pollution controls will be for the economy, suddenly switch gears when we are talking about Bush and saying that his policies had no effect on the economy. Clearly, they did, and clearly it was not the effect they had intended.
I did not include unemployment of course in the post a year ago and was (incorrectly) challenged on it. So I will mention it here: When Bush took office, the unemployment rate was 4.2% It is now pushing past seven percent. So Bush benefits by the fact that I didn't include it as one of my metrics.
The simple fact is that the Bush economy was spectacularly bad-- both from an historical perspective and when taken on its own. Of the five original metrics I used, only one-- crude oil prices-- looks good for Bush, and that only if you ignore the intervening history. And eight years is long enough that excuses aren't good enough. Any President can have a bad year or even a bad term, but this guy has owned most of the decade of the 2000's. And his economy has failed.