Democratic Majority Bad For Economy
June 6th, 2008 at 11:07pm Matt Margolis
The economy was doing a lot better before the Democrats controlled congress…
Pink slips piled up and jobs disappeared into thin air in May as the nation’s unemployment rate zoomed to 5.5 percent in the biggest one-month jump in decades. Wall Street swooned, and the White House said President Bush was considering new proposals to revive the economy.
Help-wanted signs are vanishing along with jobs, so the unemployment rate is likely to keep climbing, a government report indicated, underscoring the toll the housing and credit crises are taking on jobseekers, employers and the economy as a whole.
Adding to the pain, oil prices soared to a new record high, while the value of the dollar fell.
The Dow Jones industrials tumbled almost 400 points.
If you want the economy to move in the right direction then vote Republican in November.
Entry Filed under: Congress, Economy
27 Comments
1. JustAnotherTaxpayer | June 7th, 2008 at 12:27 am
Forget it, Mr. Margolis. No one outside the 25% of you who still think sacrificing a half trillion dollars and 4000 lives to the altar of an ego so huge, it could repeatedly assert making no mistakes as President in 2004 is what makes for great leader, believes your post.
US failure to prepare for the stuctural changes in the global marketplace now moving at breathtaking speed is the direct result of the hijacking of the republican party by socialist conservatives bent on insulating our wealthiest citizens from their mistakes. Dominance in our poloiticial discourse by this faction has rendered any attempt to restrain destructive excess by the financial elite, and look to the long term being of the middle class impossible. An impotent opposotion aided and abetted this process.
You can’t have this opposition remain powerless to stop Bush unilateral management of this war, keeping 150,000 trops in the field, and 180,000 mercenaries, at a staggering cost, then suddenly abdicate responsibility when domestic economic affairs tank.
What is happening now has been long in coming. Goldman Sachs analysts saw the oil spike coming as early as 2005 when republicans were talking about a “permanent majority” in Congress.
The reckless deficit spending, fueled by the dishonest socialist conservatives, obsesed with keeping power at any financial cost, believeing the almighty would preserve them, felt they could spend endlesly as “Deficits don’t matter.”
Name one significant change initiated by the dem majority that caused oil prices to double, gas prices to triple, home prices to plummet, etc.
Pre 2007 doesn’t count. Your party was in charge
up until then. And everyone outside that 25% knows it. The dems may not be good for much more than taking up space, but one thing is certain: such impotence makes responsibility impossible to place.
Events are moving beyond our control. T Boone Pickens, and Warren Buffet have sounded the warnings. How much more do you have to lose before you start listening to them?
2. Matt Margolis | June 7th, 2008 at 12:35 am
Wow, that was a truly ridiculous rant.
3. bagni | June 7th, 2008 at 12:41 am
markjority:
blaming the economy on a slight democratic slant in the congress
is a spatial spin job to the neptunian nth degree
to build controversy and comments
cmon…use some cosmic common sense
4. Kahn | June 7th, 2008 at 12:52 am
Criticize Congress? No!
They got us out of Iraq like they promised.
They solved the Social Security Problem.
They solved Health Care.
They voted down nuclear energy, wind power, and most new drilling in the country. (How could a global oil crisis possible affect us?)
They worked to stop global warming by limiting every energy source except coal. Because they knew that coal was wayyy clean.
They didn’t waste time investigating baseball players.
No. No problem with Congress. Obviously none.
5. Jeremiah | June 7th, 2008 at 1:18 am
WAIT!!! I see a picture, in the desert, far, far away….people with white towels on their heads, making money spin…
Those Arabians must sure be smiling from ear to ear….building some of the finest buildings in the world……Just think…every time you fill up at the pump, and just think while your pumping that gas about some of the things you would like to do to your house, like repair the roof or some new windows, or build a new deck, a side-walk, some new steps, or put vinyl sideing on your house ….. and when you do that, just think of all those new buildings their building in Saudi Arabia, almost indestructible, the finest anywhere, beautiful design…fit for kings and queens….while you barely are able to keep one payment up.
You can thank the Democrats for that, my friends.
Resources everywhere, right here, and not as much as a peep until we start to try to use those resources.
6. winnowhead | June 7th, 2008 at 1:26 am
What a joke Margolis. Do you not know how to structure a persuasive argument? Or are you just lazy?
BTW, for reference:
http://www.washingtonmonthly.com/archives/individual/2005_05/006282.php
7. JustAnotherTaxpayer | June 7th, 2008 at 3:00 am
Mr. Margolis,
Ridiculous, like beauty, is in the eye of the beholder. To less abstract issues, you did not answer my challenge to name one action initiated by the dems that caused the economic catastophe we now face, nor did you try to expain how Goldman Sachs could have forseen the oil spike, or why Pickens(One of Bush strongest defenders) and Buffet do not see the current crisis ending anytime soon.
Most importantly, why the republicans, firmly in control of all branches of govt. not take the actions Bush is advocating now to alleviate or(then) even prevent the current crisis.
Its over Mr, Margolis. The stimulus package is out, the feds not going to drop the dollar any more, Europeans are going to up their interest rates, and the Iraqis aren’t going to lift a finger(or give a drop of oil) to help us out of our troubles anymore than a welfare cheat.
Perhaps a more concrete activity than ruminating upon my post might make the word ridiculous less abstract. It seems to me that you should attempt explaining your position to someone whose lost substantial equity, or their job, or their home or all three. You could tell them how they are better off with Bush tax cuts that allow loser CEOs of co’s like Countrywide, Bear Stearns, and Wachovia who, after destroying their companies, get to keep a much larger part of their severance.
I think the responses you get will surprise you as well as disabuse you of any notion of the abstracteness of ridiculous.
PS While your at it, ask them who they are more afraid of: Bin Laden or the banker who holds the mortgage.
While there are no doubt a few who say Bin Laden, most people will tell you otherwise.
Let us know how it goes.
Have a nice day!!!
8. bozo the neoclown | June 7th, 2008 at 6:21 am
“Criticize Congress? No!
They got us out of Iraq like they promised.
They solved the Social Security Problem.
They solved Health Care.
They voted down nuclear energy, wind power, and most new drilling in the country. (How could a global oil crisis possible affect us?)
They worked to stop global warming by limiting every energy source except coal. Because they knew that coal was wayyy clean.
They didn’t waste time investigating baseball players.
No. No problem with Congress. Obviously none.”
Couldn’t have anything to do with the president gone veto crazy or the MINORITY in Congress being obstructionists now could it?
9. Danish Artist | June 7th, 2008 at 7:28 am
bozo (how accurate!),
“Couldn’t have anything to do with the president gone veto crazy or the MINORITY in Congress being obstructionists now could it?”
Uh, could it have anything to do with NOT PROPOSING PROMISED LEGISLATION?!?
Where is the proposal for “common sense legislation” for affordable energy/oil & gas”?
Where is the proposal for pulling out of Iraq, instead of “non-binding resolutions”. “no confidence votes” and irresponsible arbitrary pull out dates?!?
Where are the proposals for fiscal responsibility, saving Social Security, education and Medicare, instead of earmarks and pork?!?
Where is one promised proposal other than petty politics
Since day one, the Pelosi/Reid Congress has done nothing but work on taking over the White House in November. Passing weak BS legislation that they knew (and wanted) to be blocked/vetoed?!? Why solve attempt to solve anything, when they could use that as a weapon in the elections?!?
Pursuing their power grabs at the expense of the poor and middle class?? How truly pathetic.
10. Marty13 | June 7th, 2008 at 7:37 am
JustAnotherTaxpayer writes a thought provoking response and Matt responds with…..
“Wow, that was a truly ridiculous rant.”
Com’on Matt, aren’t yeah even gonna try to respond to JATs post? What’s next, the “your mama is sooooo ugly she………” reply.
Matt, you made the original declaration, defend it.
11. Carlton Pryor, Lead Economist, TED-OG | June 7th, 2008 at 9:15 am
Mr. Margolis,
Thank you for this opportunity. It appears to me that once again Americans have devolved into partisan finger pointing when economic cycles are responsible. The cycles of boom and bust as many an armchair economist likes to call them are the reason why the US economy is slowing; simply put economic growth can only be sustained if there are contractions from time to time. There are many ways that a contraction can be made to be less of a shock to the consumer as there are many ways those shocks can be deepened.
The president generally has more tools at its disposal than Congress in the American system to draw the markets to a reasonable braking before accelerating again. The President has not only his economic advisors but the Sec’y of the Treasury and the Fed Chairman who can do the things that would limit the Recession or Economic Slowdown, the terms do not matter really save to those whose partisan pride is at stake, and take a little of the heat off the Average American.
You wrote a mere three months ago that the President was responsible for 52 consecutive months of job growth many of those months while the Democrats controlled Congress. This proved then that you know nothing of economics despite having graduated from someone’s university I presume. But it isn’t the economists who pay your salary it is those who want to hear that their fears of certain tradition values being threatened and that “liberals” want to make them pay exorbitant taxes to fund disastrous policies.
Well that is just a cartload of worthless rags because by your own words on this blog the President is to be thanked for job growth when the Democrats control Congress. For the same reason that Women of ill repute would be frowned upon as teachers pundits should not splatter their partisan invective in matters economic.
If President Bush wants to heal the American economy it would be as simple as buying dollars with a feverish desire on global markets in an effort to spur the dollar back to ¥ 114 or higher and send the € to below € 1.40. After this Messrs Bernanke and Paulson must have lunch as decide to raise the Prime rate by one hundred basis points. You would see then a rush for the rest of the sub prime paper and Alt A paper holders rushing to tell the truth to the public before the hedge funds to which they are beholden drag them into the streets and shoot them, figuratively of course. There is another USD 600 Billion in worthless commercial paper that Lehman, Goldman, Merrill, Wachovia and Bank of America have no idea how to hide from their next annual report to shareholders and the SEC. The sooner they come clean and write down all of the paper they are holding that is leveraged by more than a ratio of 6:1 then they will do those in the markets a service.
12. js | June 7th, 2008 at 9:47 am
does anyone note the liberal scent of stupidity here?
its pretty obvious….loyalty that exceeds the senses…..ever heard of all the rats going down on a sinking ship??….thats exactly whats happening here….at the last minute…they will be trying to jump…only to find that the waterline on the hull is not very far away….
congress’s failure to act, in more ways than one..is the sole cause of our current condition today….the charlatains with empty heads told you rats that they were going to do something, and you elected them…even though they didnt tell ya how they was gonna do it…and now…you try to blame anyone and everyone on our current condition…except for the people you elected based on thier claim that they would do what they did not do….the people responsible….
its not about veto’s….bush veto’s legislation because of the earmarks…not because of some deep seated desire to destroy the US Economy…but to live up to his word….his word he have well before the idiots took control of congress….
13. Chris | June 7th, 2008 at 10:09 am
I remember back during the midterm elections Democrats bashed the economy and said gas prices were too high… so, they got elected… and what now??? unemployment rises, and gas prices soar.
oh, and we’re still in Iraq.
The democrats have lead the worst congress ever. Since they have been back in power they’ve shut out Republicans from the legislative process, and then they are unwilling to compromise on legislation.
The Republican majority actually got a lot accomplished, and passed plenty of bills in a bipartisan manner. The democrats have stalled the process, letting the economy move in the wrong direction… and doing nothing about it.
14. Matt Margolis | June 7th, 2008 at 10:58 am
Carlton,
First, based on the blog your name is linked to, it is clear you are not the person to be whining about “partisan finger pointing.”
Of course the economy is cyclical. It doesn’t take an economist to understand that after the long period of economic growth we experienced that things would have to slow down. Hence, why liberals are absolutely wrong for a) blaming the slowdown on Bush, and b) exaggerating the state of the economy.
But, it cannot be denied that Democrats claimed they would/could keep gas prices under control… and they haven’t. What have they done about it? Nothing. They’ve been in control since January 2007, and they’ve really just been sitting on their hands.
As for you claim that much of the economic growth occurred while the Democrats were in the majority. That’s not entirely true. They did not have a bicameral majority when the Bush tax cuts were passed, and their majority in the Senate was razor thin, and was the result of Jim Jeffords going from a Republican to an Independent and caucusing with the Democrats.
Since Democrats have more significant majorities in the House and Senate today, and given we’re nearing the end of Bush’s second term, they’ve been less open to compromise, and more interested in partisan grandstanding and supporting bad economic policies, while do nothing to fix the problem.
The economic slowdown was inevitable. How bad it has to be depends on the actions of Congress.
15. Magnum Serpentine | June 7th, 2008 at 11:09 am
Our economy has gotten worse because the obstructionist republics have blocked every single bill the Democratic party has sent to the floor that was designed to help the economy.
the obstructionist republics voted against tax credits for high gas prices, for regulations on gas prices and for investigations into gas prices.
obstructionist republics… Bad for the economy.
16. Carlton Pryor, Lead Economist, TED-OG | June 7th, 2008 at 11:32 am
14. Matt Margolis | June 7th, 2008 at 10:58 am
I agree the slowdown is not the fault of President Bush but more the fault of several banks and other eneterprises who have failed the American public miserably with their lack of economic stewardship. [Of course that is a topic for me at my own site] On the other hand, the economy for the American on the ground so to speak is far worse than the mainstream media is reporting. Just up the street from my country’s embassy the price of petrol is USD 4, 49 for RON 100 which you call 93 Octane or Super.
The cost is an economic stressor on the average man with limited means because as a portion of the daily expense of living, the cost of petrol could be ignored, virtually, right up until the cost of crude oil passed USD 2 per gallon.
The only other point that I have is that the American people will continue to pay higher prices for all forms of energy because the producers of crude, the refiners, the brokers and the bloke that owns the petromart station know that there is one thing the American people will not do even with the price as high as USD 6 per gallon and that is riot or disturb the peace because of high costs, or worse sit out from work in protests.
I also made no claim that the Democrats in Congress were responsible for much of the economic growth enjoyed in America post the 2001 recession. What I said was that you had taken the view that when the economic figures were good Bush was to thank and now that the cycle has turned the Democratically controlled Congresss is to blame. This is an ill reasoned argument because as I put to you Bush has more tools at his disposal to help the American consumer recoup buying power than the Congress no matter who is in power.
17. neocon | June 7th, 2008 at 11:43 am
While fuel & food prices rise, the Pelosi and Reid led houses are actually debating a bill (Lieberman-Warner) that would worsen the problem.
Unbelievable. Those two are the worst elected politicians that I can ever recall.
peace, neocon
18. HarkeysBar | June 7th, 2008 at 1:01 pm
They inherited it from the do nothing Republican congress.
19. Tractatus | June 7th, 2008 at 3:00 pm
What a joke Margolis. Do you not know how to structure a persuasive argument? Or are you just lazy?
It’s probably both; he doesn’t know how because he’s lazy. When all you do is preach to the choir, you hear nothing but amens, so you never learn how to form a real argument.
Of course, even by his internal “logic,” this doesn’t work. Remember that great period of economic expansion we had under Clinton that went away when Bush took office? Somehow, that was still Clinton’s fault, yet the same metric doesn’t apply here. What a predictable bit of dishonesty.
Note that winnowhead’s link gets no responses. The wingnuts haven’t figured out how to spin their way out of that bit of truth yet.
20. Dennis | June 7th, 2008 at 6:31 pm
http://www.washingtonmonthly.com/archives/individual/2005_05/006282.php
REPUBLICANS vs. DEMOCRATS ON THE ECONOMY….Did you know that Democratic presidents are better for the economy than Republicans? Sure you did. I pointed this out two years ago, back when my readership numbered in the dozens, and more recently Michael Kinsley ran the numbers in the LA Times and came to the same conclusion.
[reference the link for the charts - meanwhile, Mr. Margolis, the floor is yours...]
21. Chris | June 7th, 2008 at 10:29 pm
I’m willing to bet that none of the trolls here made any attempt to look at the source data from that link or find any criticisms of it. A simple google search would make you trolls think twice befor posting links to “studies” that simply reinforce what you want to believe.
22. phnx | June 7th, 2008 at 10:56 pm
Dennis,
Two words: Jimmy Carter
Under Carter inflation and interest rates, both topped 18%, and unemployment reached 7.9. Gasoline was in scarce supply and lines were very long. So much for Democrat Presidential economic briliance.
What is far more relevant is the economic policy of each of the candidates.
Individual tax rates
Obama will reinstate the individual income tax rates established in 1994.
While the difference between the highest tax rate in 1994 (39.6 percent) and the highest tax rate in 2008 (35 percent) is less than 5 points, that figure is misleading, because tax brackets increased faster in 1994. For example, in 1994, the maximum rate on taxable income started at $250,000, while in 2008 it doesn’t start until $357,700.
Investment income
Long-term capital gains and qualified dividends are now taxed at the rate of 15 percent, while short-term capital gains and interest income are taxed at marginal income tax rates, a maximum of 35 percent. Thus, there is currently an arbitrage of 20 percent on after-tax yields, favoring stocks over bonds.
Obama will tax dividends at marginal income tax rates and will raise the tax rate on long-term capital gains to 1994 levels (28 percent). When confronted during the last debate with historical evidence that increasing the tax rate on capital gains decreases tax revenue, he stated that it was nonetheless necessary to achieve fairness.
Payroll taxes
American taxpayers pay a Social Security payroll tax on earned income at the rate of 12.4 percent, plus a Medicare payroll tax on earned income at the rate of 2.9 percent. Self-employed individuals pay the entire 15.3 percent, while employees split the tax equally with their employers.
The amount of earned income subject to the Medicare tax is unlimited. The amount of earned income subject to the Social Security tax is limited. However, that limit has been increased every year. For example, in 1994 you paid $7,514 (12.4 percent times $60,600), while in 2008 you will pay $12,648 (12.4 percent times $102,000). Thus, your maximum Social Security payroll tax has been increased by 68 percent since 1994.
Obama would remove any limit on the amount of earned income subject to the Social Security payroll tax. This would result in a large tax increase on taxpayers making more than $102,000 per year. When combined with average state and city income taxes, a taxpayer making more than $250,000 per year would pay a tax rate in excess of 60 percent on earned income.
Energy excise taxes
Obama proposes an oil windfall profits tax. When last enacted by Congress in 1980, (remember Jimmy Carter??) this policy proved to be a disaster, decreasing supplies and increasing prices, and was repealed in 1988.
Corporate tax rates
All western nations have reduced their corporate taxes to stimulate their economies. US corporate taxes are already the highest of any developed economy.
Obama wants to increase corporate tax to achieve social policy objectives. An increase in corporate tax will dry up investment money required to stimulate the economy.
Obama’s tax policies are a recipe for economic disaster.
23. Kahn | June 8th, 2008 at 12:32 am
bozo the realclown -
Bush hasn’t vetoed a social security bill. There never was one.
No veto of war funding bills. All Congress has to do is not pass one.
We are not drilling in ANWAR or off the coasts and we are not adding new nuclear capacity. Bush didn’t veto anything to make those things happen. And by the way - THOSE two things actually could help the economy.
And I don’t remember Bush demanding an investigation of baseball. Or, well what would he even veto to do that?
Put down the kool-aid and think - you clown (your wods, not mine).
24. Rana Quijotesca | June 8th, 2008 at 2:30 pm
Matt-
Most of the problems that the economy is facing now stems from two trends that started under a Republican Congressional Majority: the unsustainable increase in home prices (fueled by loosening of mortgage restrictions and low interests rates–thanks Greenspan) and the rise in oil prices, exacerbated by war in the middle east (a comment neutral to the current wars in the middle east, but they have raised oil prices).
For someone who claims to know something about Economics (referring to your comment about economic cycles), you don’t apply your argument both ways. If the economy is cyclical, then the cycle either a) wouldn’t be influenced by Democrats in such a short time or b) would be set by activities well in the past.
Just think, if Republicans hadn’t rolled back CAFE standards, then there would be less demand for fuel and lower energy costs… There are two parts to the Supply and Demand model… try focusing on both of them…
Oh, so you goons stop misusing the word:
–Does that sound like liberals or conservatives in this country to you?
A little aside, on the recent post (a few days ago), I quoted Jeremiah, in context (comment 27), saying that interracial marriages were disordered, drawing the obvious conclusion as to Jeremiah’s bigotry. However, my comment was quickly deleted, saying that I “Grossly misrepresented the opinion of another commenter.” Not seeing how quoting someone in context can be misrepresenting their views, I emailed the website (almost a week ago now) asking them to explain their reasoning or to reinstate the comment. They have not since replied.
How is quoting someone in-context misrepresenting their views? Why was my comment deleted?
25. Matt Margolis | June 8th, 2008 at 5:44 pm
“Does that sound like liberals or conservatives in this country to you?”
Liberals.
26. phnx | June 8th, 2008 at 9:22 pm
Notice that there is no response to the analysis of Obama’s tax plans. Rather than engage in an actual debate the leftists prefer to repeat talking points and sling mud.
Let me rephrase the analysis and dumb it down to terms you leftsits can actually understand:
Obama bad. Obama tax policy bad for economy. McCain good.
27. Chris | June 9th, 2008 at 12:21 am
Gee, we start shedding jobs when we raise the minimum wages. What a surprise!