In memory of 9-11, I started a look back at the last 10 years yesterday. I didn't feel like yesterdays run from 2000-2007 would cause that much of a stir. We've had a little time to cool down. When I was blogging through these things at the time I got some pretty strong reactions.
Today's post I suspect will be much more sensitive, not because it deals with more momentous topics. What could be more momentous than 9-11 and the wars in Iraq and Afghanistan? It is because we are still living through it and emotions are still charged. I don't know if I'll write a 15 or 20 year look back, but today's post will not be particularly controversial in 5 years, because our emotions will have moved on. This is a great lesson to learn in the midst of political heat.
So I present my sense of the last 5 years or so. And so that you can read my feelings, I am trying not to write them in with emotion, but in an attempt to be as objective as possible (knowing that no one can be completely objective).
In 2008, America entered into its worst financial crisis since the Great Depression. Bush was still in office. When voting today we will have a tendency to blame Obama since he is the one in office right now, but he cannot be blamed for causing the current economic crisis, although you might accuse him of worsening it or not helping the recovery enough.
Which of these you think is correct will depend on your sense of whether his stimulus package helped, hurt, or didn't do anything. Certainly the stimulus package added a significant amount to our national debt, so those who view our current state through this lens see Obama as worsening the crisis. Others say it didn't help or didn't help much.
These are more matters for the experts than for people like you and me. There is no question that the economy has improved significantly from what it was in 2008, although the recent debt ceiling crisis and downgrade of the US credit rating has left us with a bit of a roller coaster these last weeks. And of course President Bush passed a couple stimulus packages like this, so to distinguish themselves from Obama on this issue, the Republican party has had to move to the right and oppose a position it once had.
But I'm getting ahead of myself. Pretty much everyone agrees that the "Great Recession" that came on in 2008 was a result of the collapse of the housing bubble. People had been saying it was coming for years. Although it happened on Bush's watch, and although I'm not willing to completely absolve his administration of blame, something much bigger than his presidency stands behind this crisis.
Materialism. I was tempted to say "greed," but I do not mean to use a word that might allow us ordinary people to absolve ourselves too easily. Depending on your political flavor, you will tend to blame one end or the other. One side wants to blame Fannie Mae and Freddie Mac--and thus blame poor people who wanted to live in a house but couldn't afford one. The other side wants to blame greedy traders and hedge fund brokers who bet against the market and, most significantly, bundled up massive amounts of debt and then played with them like they were a volley ball.
One side would say our problem was that we were not living within our means. I believe this is indeed true. Those who are militant capitalists tend to say only this. But it was also, in my opinion, a good example of what happens when capitalism is left uncontrolled. We did not and still do not have a good sense of the kinds of regulations we need in this electronic age to help capitalism do what it is supposed to do without causing these sorts of crises. I vigorously disagree with that economic philosophy (libertarian, Ron Paul) that says the problem is that we have regulations at all. History, in my opinion, begs to differ.
I think it is significant that it was a Republican President who triggered all the TARP bailouts. To me, this--along of course with the majority of economists--demonstrates their necessity. "Too big to fail" was something the Bush administration understood as reality. In the end, the bailouts did not end up causing as much debt as initially thought. GM and Chrysler paid their loans back. Some of the banks paid back significant amounts.
The consequence, very interesting to watch, is that in order to oppose the bail-outs, Republicans have had to move to the economic right of President Bush. The result is a quite dramatic shift in the Republican party these last three years toward libertarianism, which historically of course is a quite different political party.
Obama's first year in office involved continued work to pull our economy out of its nose dive. Obama, with the Democrats having taken both houses in reaction to the Iraq War and economic crisis, passed a stimulus package in February to try to bolster the economy. We will have to let the economists debate whether this is the correct approach. Major economists like Martin Feldstein and Paul Krugman urged it. It was not some Democratic desire to spend, spend, spend. It was pushed by a dominant economic perspective--one that President Bush and the Republican party of the first decade of the 2000s accepted.
Ironically, the death of Ted Kennedy kept a Democratically controlled House and Senate from passing the kind of health care bill they had been trying for 50 years to pass. But they were able to pass a modified health care plan that involved the free market. Individuals would be required to buy health care and the resulting system would make it possible for most Americans to be covered.
The Democrats were not able to get a "public option" in which the government would provide health care to everyone. The compromise was a mandate for all Americans to buy health care, much as Republican presidential candidate Mitt Romney did in Massachusetts. The result is that Republicans have had to move further to the right in order to oppose "Obamacare," as it is derisively called. What used to be libertarian values have gained dominance in the Republican party.
Many have done so by a "strict constructionist" reading of the commerce clause of the Constitution after many, many decades of a broader interpretation. The clause has been used for 70 years to allow for things such as this mandate in the health care plan. But idealists in the Republican party are now--somewhat ironically--finding in the current economic crisis reasons to try to turn the American economic system back to the time before the New Deal, which was brought on by the Great Depression.
2009 also saw the rise of the power of the "Tea Party," a group of libertarians who resonate strongly with the revolutionary actions of various colonists in New England against English taxation in the lead up to the Revolutionary War. The group strongly opposes government "intrusion" into local life, as well as taxation--particularly taxation at a different rate for larger incomes than for lower ones.
The Republican party recognized the power of this group as Republican candidates with this flavor were elected in troves, while traditional Republicans were voted out. The result was that the Republicans retook the House of Representatives with a vengeance, and not with traditional Republicans, but Tea Party Republicans.
American anger against Obama's health care overhaul was perhaps the major presenting reason for the massive vote of Democrats out of the House. But it was probably also the perception that the Democratically controlled Congress used political manipulation to get it through, despite strong objections from a very vocal part of the populace. Now, a strongly controlled Republican House came into office with common goals--to reduce the size and power of the federal government and to lower the overwhelming amount of American debt.
The result was a loggerheads over budget and the ensuing crisis over raising the debt ceiling. While the Tea Party did not get as much as it wanted, the resulting deals tipped very heavily toward their boundaries rather than those of President Obama, who himself was strongly criticized by his own party for giving away the kitchen sink. Traditional Republicans like John Boehner found themselves unable to broker deals that prior Republicans would have considered quite pleasing.
The inability of Congress to get things done was viewed very negatively by the American people. Congress' approval rating dipped to the lowest in its history and Obama's also dipped to his lowest ever. Standard and Poor for the first time in history downgraded America's credit rating, partially because the debt was not lowered more, partially because of the inability of Congress and the President to get necessary things done.
As I write today on September 11, 2011, we enter into an election season in which Obama faces a difficult road to re-election, and all the leading Republican candidates are courting Tea Party values. Rick Perry, if elected, seems to want to return America back to some of its pre-Great Depression economic structures. But if this look at the last 10 years says anything, it says that a very, very lot can change in a year's time.
We'll see what happens...