Beinhart's Body Politic: Capitalism 105

Bushenomics--As he is to war, so he is to money

Larry Beinhart

Supposedly we are in a sustained economic recovery and have been since 2002.

Part of this is Bush hot air and the Republican Noise Machine, which the media quotes verbatim.

By a certain measure, however, it’s real.

The economy has grown. Corporate profits are at an all-time high. Average income is up. There’s lots of money around.

But the recovery has some really strange features. Oddities never before seen in a recovery.

Jobs: During Bush’s first term the US actually lost private-sector jobs. It finally improved in 2005, and now job creation is almost keeping pace with the increase in population. Still, over all, it’s the worst record since Hoover, the fellow who presided over the onset of the Great Depression.

How do you have a recovery without creating jobs?

Income: Yes, average income is up during the tenure of the current administration, but the joke about average income is: Bill Gates walks into a bar. The average income of every person in the room immediately goes up 10,000 percent.

But median income, the amount that people in the middle of the group earn, barely budges. So let’s look at that figure. Median income is down. The average person makes less now than when Bush came into office.

Not only that, the downward pressure on wages is no longer just a blue-collar issue, it’s moved up to white-collar workers, the educated classes, even doctors.

How do you have a recovery when people are making less than before the recovery?

Cost of living: Key factors of the cost of living are much higher than they were six years ago. In particular, fuel is up 100 percent, higher education costs are up about 44 percent, health care premiums are up 80 percent, and affordable housing is scarce.

Normally, when the cost of living goes up, we have inflation. But we’ve had low inflation during the Bush years.

How can the cost of living go up while the cost of money stays low?

Here’s the most peculiar statistic of all. You may have been hearing that the Dow Jones Index is at an all-time high. It’s true. However, it is only 16 percent higher than the day George Bush came into office. By comparison, when Clinton left office the Dow was 320 percent higher than when he came into office.