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George Bush Caused The Great Recession - NOT!
One of the most misguided themes that I hear from liberals and the media is that George Bush and the Republicans caused the Great Recession. In fact, a journalist interviewing me yesterday made that point. I corrected him. That point was also buried in an email that we received from somebody who, very politely, seemed to be trying to convince us that our Republican ways were all wrong and that more government intervention in our lives was the way to go. Below is my response to him, and that contains the same information I gave to that journalist when he asked me, "Didn't Obama inherit the recession from Bush?" I didn't have time to answer every point that person addressed in his email to me, but I picked out some very important ones that I thought needed to be challenged. ___________________________ From: Stafford Jones [mailto:chair@alachuarepublicans.com]
Sent: Sunday, May 15, 2011 5:26 PM
To: 'XXXXX'
Subject: RE: Ideas and Opinions
Mr. XXXXX, thank you for your comments. It will come as no surprise to you that I don't find much to agree with in your comments. I am going to address a few of your major points: An unsettled populace because of the Vietnam conflict has nothing to do with the overall quality of life in the U.S. The fact that LBJ pursued a "guns and butter" strategy, meaning that he escalated a war and greatly expanded the welfare state at the same time helped to drive up the debt and debase our currency. At least, then, we were still partially on the gold standard, which limited some of the damage he could do. No, the decline in the overall quality of life is that the federal government has made larger and larger swaths of people more dependent on the nanny state and less dependent on themselves and their own ambition. For a brief period of time, and after Jimmy Carter had brought this country to its knees, Ronald Reagan gave us a glimpse of ourselves, again. Even with a democratic congress, he put in place tax policies that allowed this country to grow its way out of deficit spending. There was a small, quick recession during George Bush's tenure, but the country quickly returned to sound growth. To his credit (and that of a Republican congress) Bill Clinton pretty much let things be so that the economy would continue to grow. You say capitalism is good so long as the country regulates it to the benefit of everybody. Let's examine a recent example, then. Some complain that George Bush is responsible for the "great recession." Not true. Some people claim that it was the greedy banks and that we must regulate them, more. That isn't true, either. Bill Clinton's administration pushed the banks (even going so far as to sue) to force them to make more mortgages available to people that couldn't afford them, to begin with. The two GSE's (government sponsored entities) Fannie Mae and Freddie Mac told banks to make every mortgage they could, and they would buy them or back them. Government interfering with the market disrupted the natural supply and demand signaling processes causing the housing market to inflate like a balloon. But wait, there is more. To add insult to injury, The Commodity Futures Modernization Act of 2000 (voted for by more Democrats than Republicans, and voted against by more Republicans than Democrats - and signed into law by Bill Clinton) created new financial instruments called Credit Default Swaps and derivatives that allowed banks to hide all the bad loans that the federal government had sued them to make. By about the end of George W. Bush's second term the problem was so large that it couldn't be hidden anymore. To his credit, George Bush's administration saw the problem in about 2003 and asked congress to take a hard look at the instability in Fannie Mae's and Freddie Mac's balance sheets. Still, by about the end of his second term, there were so many bad mortgages hidden in financial derivatives at investment banks, that the system completely collapsed in on itself. Mr. XXXXX, I am sure you mean well, but the state of our country is not because the federal government hasn't done enough regulating for the common good. The state of our country is what it is because the federal government has gone way too far and completely destroyed the natural supply and demand signaling processes and because we have made people dependent on the government instead of being independent and resourceful, for themselves. I don't have time to put it here, but I could write another dozen examples just like this. Again, thank you for your comments. Stafford Jones
Chairman, Alachua County Republican Party | 
