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Vanity Fair - The Economic Consequences of Mr. Bush, by Joseph E. Stiglitz

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Emit Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 12:20 PM
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Vanity Fair - The Economic Consequences of Mr. Bush, by Joseph E. Stiglitz
Edited on Sat Nov-17-07 01:14 PM by Emit
From this month's Vanity Fair -- it's like all the things we read about on a daily basis here on DU rolled into one -- worth a read, but for folks following DU, none of it is surprising.

When we look back someday at the catastrophe that was the Bush administration, we will think of many things: the tragedy of the Iraq war, the shame of Guantnamo and Abu Ghraib, the erosion of civil liberties. The damage done to the American economy does not make front-page headlines every day, but the repercussions will be felt beyond the lifetime of anyone reading this page.


Remember the Surplus? ... The nasdaq fell 15 percent in the single month of April 2000, and no one knew for sure what effect the collapse of the Internet bubble would have on the real economy. It was a moment ripe for Keynesian economics, a time to prime the pump by spending more money on education, technology, and infrastructureall of which America desperately needed, and still does, but which the Clinton administration had postponed in its relentless drive to eliminate the deficit. Bill Clinton had left President Bush in an ideal position to pursue such policies. ... But the Bush administration had its own ideas. The first major economic initiative pursued by the president was a massive tax cut for the rich, enacted in June of 2001. ... these tax cuts, when fully implemented and if made permanent, mean that in 2012 the average reduction for an American in the bottom 20 percent will be a scant $45, while those with incomes of more than $1 million will see their tax bills reduced by an average of $162,000.


The administration crows that the economy grewby some 16 percentduring its first six years, but the growth helped mainly people who had no need of any help, and failed to help those who need plenty. ... Inequality is now widening in America, and at a rate not seen in three-quarters of a century. A young male in his 30s today has an income, adjusted for inflation, that is 12 percent less than what his father was making 30 years ago. Some 5.3 million more Americans are living in poverty now than were living in poverty when Bush became president. Americas class structure may not have arrived there yet, but its heading in the direction of Brazils and Mexicos.

... A budget surplus of 2.4 percent of gross domestic product (G.D.P.), which greeted Bush as he took office, turned into a deficit of 3.6 percent in the space of four years. The United States had not experienced a turnaround of this magnitude since the global crisis of World War II. ...


The Bankruptcy Boom ... Although it railed against entitlement programs for the needy, the administration enacted the largest increase in entitlements in four decadesthe poorly designed Medicare prescription-drug benefit, intended as both an election-season bribe and a sop to the pharmaceutical industry. ...

... the administrations tax cuts were meant to stimulate the economy, but this was never true. ... the job of economic stimulation fell to the Federal Reserve Board, which stepped on the accelerator in a historically unprecedented way, driving interest rates down to 1 percent. ... taking inflation into account, interest rates actually dropped to negative 2 percent. The predictable result was a consumer spending spree. ... Credit was shoveled out the door, and subprime mortgages were made available to anyone this side of life support. Credit-card debt mounted to a whopping $900 billion by the summer of 2007. ... As many as 1.7 million Americans are expected to lose their homes in the months ahead. For many, this will mean the beginning of a downward spiral into poverty.

Between March 2006 and March 2007 personal-bankruptcy rates soared more than 60 percent. As families went into bankruptcy, more and more of them came to understand who had won and who had lost as a result of the presidents 2005 bankruptcy bill, which made it harder for individuals to discharge their debts in a reasonable way. ...

And Then Theres Iraq ... the total costs of the Iraq war mount, even by a conservative estimate, to at least $2 trillion. To which one needs to add these words: so far.


.. The continuing reliance on oil, regardless of price, points to one more administration legacy: the failure to diversify Americas energy resources. ... the administration has pursued a policy of drain America firstthat is, take as much oil out of America as possible, and as quickly as possible, with as little regard for the environment as one can get away with, leaving the country even more dependent on foreign oil in the future...


Contempt for the World ... As confidence in the American economy has plummeted, so has the value of the dollarby 40 percent against the euro since 2001. ... Meanwhile, we have become dependent on other nations for the financing of our own debt. Today, China alone holds more than $1 trillion in public and private American I.O.U.s. Cumulative borrowing from abroad during the six years of the Bush administration amounts to some $5 trillion.


The Way Forward ... Extricating the country from Iraq will be the bloodier task, but putting Americas economic house in order will be wrenching and take years. ...


... What is required is in some ways simple to describe: it amounts to ceasing our current behavior and doing exactly the opposite. It means not spending money that we dont have, increasing taxes on the rich, reducing corporate welfare, strengthening the safety net for the less well off, and making greater investment in education, technology, and infrastructure.

When it comes to taxes, we should be trying to shift the burden away from things we view as good, such as labor and savings, to things we view as bad, such as pollution. With respect to the safety net, we need to remember that the more the government does to help workers improve their skills and get affordable health care the more we free up American businesses to compete in the global economy. Finally, well be a lot better off if we work with other countries to create fair and efficient global trade and financial systems. Well have a better chance of getting others to open up their markets if we ourselves act less hypocriticallythat is, if we open our own markets to their goods and stop subsidizing American agriculture.


Edited to add, and while you're there at Vanity Fair, for a laugh, if you can stomach it (he gets a body wax, and writes about the details :puke:), check out Christopher Hitchen's latest 2-part series on Hitchens's 'search for self-improvement.'

... I am a proud child of the National Health Service in England and remember feeling rather hurt when, while reading Gore Vidals novel The Judgment of Paris many years ago, I came upon a character who was described as having British teeth. As Dr. Lituchy readied me with a series of numbing injections, his partner came by to have a look. He wanted to see with his own eyes, he said, that my teeth really were as British as they looked in the before photograph. I duly beamed for him, and he reeled back briefly. Having become a citizen last April, I felt as if this procedure was part of my new passport to Americanization. ...

... The male version of the wax is officially called a sunga, which is the name for the Brazilian boys bikini. I regret to inform you that the colloquial term for the business is sack, back, and crack. ... Heres what happens. You have to spread your knees as far apart as they will go, while keeping your feet together. In this wide stance position, which is disconcertingly like waiting to have your Pampers changed, you are painted with hot wax, to which strips are successively attached and then torn away. Not once, but many, many times. I had no idea it would be so excruciating. The combined effect was like being tortured for information that you do not possess, with intervals for a (incidentally very costly) sandpaper handjob. The thing is that, in order to rip, you have to grip. A point of leverage is required: a place that can be firmly gripped and pulled while the skin is tautened ...

Hitchens displays his pre-makeover fangs for the camera. More photos of Hitchens's search for self-improvement.
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Benhurst Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 12:43 PM
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Edited on Sat Nov-17-07 01:21 PM by Benhurst

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Emit Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-17-07 05:10 PM
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