In the wake of Trump’s electoral victory, commentators of all
political persuasions are castigating the Democratic Party for ignoring the
concerns of rural voters, the flyover states, and working-class Americans in
general.
The irony is that it was the Democratic administration of
Barak Obama that relieved the gravest concerns of these constituencies, who
lost jobs and homes in the wake of the 2007-2008 Bush Financial Crisis, and
regained them under the Obama Recovery.
If concerns remained, it was only because the Democratic
Party and the campaign of Hillary Clinton failed to deliver this winning economic
message. Left to the mercies of a lying
demagogue, it is no wonder that ordinary Americans believe they are worse off
because of “liberal” Democratic policies.
The George W. Bush Crash was the worst financial crisis
since the Great Depression of the 1930s.
Because of deregulation and lax oversight by the Republican
administration, investment houses lied about the riskiness of their securities,
covertly traded unrated securities in the shadow banking system, and accumulated
debt without regard to risk. Risky
mortgages were pushed on ordinary consumers, who piled on more debt, and risky
securities were represented as gilt-edge to unknowing consumers and managers of
public finances. Then the crisis hit:
· At the height of the crisis, in September 2008,
there was a bank run on money market funds that threatened to collapse the
entire US financial system.
· Treasury Secretary Hank Paulsen asked Congress
for a $700 billion bailout for the Wall Street banks.
· By the time the markets had stabilized, US
unemployment doubled to 10.1%, and median household wealth fell by 35%.
· Housing prices dropped 20% from their 2006 peak.
· People lost their homes when they could no
longer pay their mortgages.
If Americans have economic concerns today, there is the cause. If Americans’ financial well-being has
stagnated, it is because they have been catching up from the Bush Crash.
The story is a simple one: Republicans deregulated the financial
system, Wall Street bankers made money, and ordinary Americans lost their jobs
and their homes. To add insult to
injury, Wall Street was bailed out while the ordinary taxpayer paid the bill.
The report of the U.S. Financial Crisis Inquiry Commission
says that “the crisis was avoidable” and that it was caused by these
failures of Bush-era oversight:
·
Widespread failures in financial regulation
·
Dramatic breakdowns in corporate governance
·
Too many financial firms acting recklessly
·
Excessive borrowing and risk by households and
Wall Street
·
Key policy makers ill prepared for the crisis
·
Systemic breaches in accountability and ethics
at all levels
It has taken until now – eight years – for the economy to recover
from the Bush Crash of 2008. And how did
we come back? It was the Democratic
administration of President Barak Obama that brought
us back from the brink, and held things together while the banks were nursed
back to health and employment recovered.
It was the greatest economic comeback since the end of the Great
Depression.
Did we hear about this from Hillary? Did she position the Democrats as the
champions of ordinary Americans? Did she
take a clue from Bernie’s broader appeal?
Whatever the outcome in the Electoral College this time,
remember that a majority of voters chose a more enlightened and democratic
way. At the next election, a progressive
Democratic message will give voters a clear choice.
But you need to make sure that Americans hear the message, care about it, and vote for it.
