Decade in the Red: Trump Tax Figures Show Over $1 Billion in Business Losses

Sorry but it is true. Obama pulled us out of the Bush depression.

 

The Great Recession happened at the end of 8 years under GW Bush and was a result of his economic policies enacted by the GOP notably another round of "trickle down economics" and large expenditures for two needless wars.

 

Which President Created the Most Jobs?

Which President Created the Most Jobs? Updated February 19, 2019

01 Bill Clinton (1993-2001): Most Number of Jobs Created.
02 Franklin D. Roosevelt (1933-1945): Largest Percent Increase.
03 Ronald Reagan (1981-1989): Second-Largest Job Creator, Job and Percentage-Wise
04 Jimmy Carter (1977-1981): Fourth-largest Job Increase
05 Harry Truman (1945-1953): Fourth-largest Percent Increase

06 Barack Obama (2009-2017): Special Mention

President Obama created 8.9 million jobs by the end of December 2016, a 6.2 percent increase. There were 152.3 million people employed at the end of his term. That's compared to 143.4 million working at the end of the Bush administration.

But that doesn't give the total picture. The economy lost 8.5 million jobs as a result of the 2008 financial crisis. It kept shedding them until December 2009. Since that low point, Obama created 16 million jobs, a 11.6 percent increase. If measured that way, Obama was the third-largest job creator in terms of numbers.

Obama attacked the Great Recession with the American Recovery and Reinvestment Act. It created jobs through public works. Many of those jobs were in construction. That successfully reduced the unemployment rate. But that meant Obama increased the debt by $8.6 trillion, a 74 percent increase. That drove the debt-to-GDP ratio to 104 percent.

It didn't stimulate demand as much as creating the same number of better paying high-tech jobs. In fact, jobs created after the last few recessions have led to greater income inequality, as re-hired workers became willing to take jobs that paid less. The high level of long-term unemployed and underemployed meant that trend only continued.

Job creation would have been stronger during Obama's term if Congress hadn't passed sequestration. In his last FOMC meeting, Federal Reserve Chairman Ben Bernanke noted that these austerity measures forced the government to shed 600,000 jobs in four years. In the prior recovery, the economy added 400,000 jobs during the same period.

11 George W. Bush (2001-2009)

President Bush created 5.8 million jobs, a 4.2 percent increase. He struggled with two recessions. He lost 3.6 million jobs in 2008, his last year in office. The job gains occurred before that, as he recovered from the 2001 recession. He responded to it with stimulus checks and the Bush tax cuts. But tax cuts are not the best ways to create jobs. He was helped by low interest rates from Alan Greenspan's expansive monetary policy.

 

If Obama hadn't bailed us out the Great Recession would have spiralled into a depression.

 

I agree that subprime mortgages were the initial cause of the recession.
The Great Recession of 2008: What Happened, and When?

2006. How the Subprime Mortgage Crisis Caused the Recession

In 2006, the subprime mortgage crisis erupted. On November 17, 2006, the Commerce Department warned that October's new home permits were 28 percent lower than the year before.

At this point, the mortgage crisis could have been prevented. But the Bush administration and the Federal Reserve did not realize how grave those early warning signs were. They ignored declines in the inverted yield curve. Instead, they thought the strong money supply and low-interest rates would restrict any problems to the real estate industry.

They didn't realize how reliant banks had become on derivatives, or contracts whose value is derived from another asset –– essentially betting that these assets will perform well. Banks and hedge funds sold assets like mortgage-backed securities to each other as investments. But they were backed by questionable mortgages.

These interest-only loans were offered to subprime borrowers. These high-risk people are most likely to default on a loan. The banks offered them low interest rates. But this “too-good-to-be-true” loan type resets to a much higher rate after a certain period. Home prices fell at the same time interest rates reset. Their defaults caused the subprime mortgage crisis.

Banks had sold too many mortgage-backed securities than what could be supported by good mortgages. When home prices started falling in 2007, it signaled the onset of the real estate crisis.

Banks felt safe because they also bought credit default swaps. They insured against the risk of defaults. But when the MBS market caved in, insurers did not have the capital to cover the CDS holders. As a result, insurance giant American International Group almost went belly-up. The federal government saved it.

Banks relied too much on derivatives. They sold too many bad mortgages to keep the supply of derivatives flowing. That was the underlying cause of the recession. This financial catastrophe quickly spilled out of the confines of the housing scene and spread throughout the banking industry, bringing down financial behemoths with it. Among those deemed “too big to fail” were Lehman Brothers and Merrill Lynch. Because of this, the crisis spread globally.

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But why were the big banks so involved in these risky assets? It was the repeal of the Glass-Steagall Act in 1999 which allowed them to use depositor's money gambling on risky assets. While I do give President Clinton some of the blame it was the Republicans who pushed the repeal through Congress.
This 1933 Law Would Have Prevented the Financial Crisis

Repeal
On November 12, 1999, President Clinton signed the Financial Services Modernization Act that repealed Glass-Steagall. Congress had passed the so-called Gramm-Leach-Bliley Act along party lines, led by a Republican vote in the Senate.

The repeal of Glass-Steagall consolidated investment and retail banks through financial holding companies. The Federal Reserve supervised the new entities. For that reason, few banks took advantage of the Glass-Steagall repeal. Most Wall Street banks did not want the additional supervision and capital requirements.

Those that did became too big to fail. This required their bailout in 2008-2009 to avoid another depression.

 

But that doesn't give the total picture. The economy lost 8.5 million jobs as a result of the 2008 financial crisis. It kept shedding them until December 2009. Since that low point, Obama created 16 million jobs, a 11.6 percent increase. If measured that way, Obama was the third-largest job creator in terms of numbers.

 

How Barack Obama rescued the US economy
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The starting point must be with Mr Obama’s inheritance: the economy was in free fall in early 2009. As the report notes, perfectly correctly: “It is easy to forget how close the US economy came to an outright depression during the crisis. Indeed, by a number of macroeconomic measures . . . the first year of the Great Recession . . . saw larger declines than at the outset of the Great Depression in 1929-30.” Responsibility for the successful recovery does not rest with this administration alone: the administration of George W Bush was responsible for the immediate response (though bearing some responsibility for the severity of the crisis); the US Federal Reserve acted effectively; and Congress passed important legislation. Yet, shockingly, most congressional Republicans opposed all significant monetary, financial and fiscal actions taken to deal with the crisis.

The Obama administration implemented a number of important fiscal measures, notably the American Recovery and Reinvestment Act of 2009. It also provided strong moral support for the Fed (including the reappointment of Ben Bernanke, who had been President Bush’s nominee). The administration also restored the financial sector faster than expected and carried out a highly successful rescue of the car industry.

Meanwhile, Republicans decried the fiscal stimulus, complaining about the huge fiscal deficits caused by the crisis. Yet it was as absurd to complain about deficits then as it is to slash taxes now, when the economy seems close to full employment. Some Republicans claimed Fed policies risked hyperinflation. Most opposed the re-regulation of the financial sector and savaged the bailout of the car industry. Yet President-elect Donald Trump might not be in a position to bully automakers today if they had not been rescued back then. In all, given the starting point, the performance of the economy has been remarkable. The unemployment rate has consistently fallen faster than expected. US business has also added 15.6m jobs since private-sector job growth turned positive in 2010. Real wage growth has been faster in the present cycle than in any since the early 1970s. In the third quarter of 2016, the economy was 11.5 per cent bigger than at its pre-crisis peak and real gross domestic product per head was 4 per cent above the pre-crisis peak, while that of the eurozone was still below it. Household net worth has also reached 50 per cent above its 2008 level.

 

Are you even aware that Clinton put a work requirement on welfare?