The following is in response to Gary Halbert’s commentary, The Economy: Worst Five Years Since the Depression, which appeared on February 13:
I am sick of reading articles like this. It seems slanted to the “right” with half-truths and incomplete analysis, and does not place responsibility where it belongs. I read a lot of Republican talking points in it, and I expect less of that in financial writings like this.
The solutions to our economy are not simple or easy, especially when our elected officials will not work together to solve long-term issues. They seem to have more incentives for party loyalty than for the good of the US. That contributes to our problems, and the deficit is just one example of how serious issues are manipulated to fit political goals.
To me, it is the wealthy and what they take from the US that is the real tragedy, not what goes to the poor and middle class. Daily, the rich manipulate the laws and markets to skew wealth their way and avoid taxes. Mitt Romney helped prove that. Gary and most Republicans won't touch this, even though they know that the tax codes and markets are rigged in favor of the rich. Agencies like the SEC and FINRA are convicting crooks daily for their misdeeds, but that does not seem to happen in Washington and on Wall Street.
Gary, I share some of your fears and concerns, but your article lacks balance and objectivity. Faster economic progress would result if all elected officials worked together, but Republicans have worked against Obama on virtually everything he has proposed. Some data demonstrate that Congress has been less effective in the past four years than in recent history, and no president can overcome that type of opposition. So, we should not be surprised if growth was slower than desired when we chose not to work together for growth. Here are some of the shortfalls that I view as important:
- Republicans claim to love small government so we can spend less on it, but they blame the president for the state of the economy, as if the government should be responsible or was the cause of the problems. For the most part, neither is true. Obama gets the blame from Gary for the results that the economy did not achieved, but no credit is given for improvements made thus far. Gary says little about the stock market recovery and the restoration of trillions of dollars of lost wealth. Yes, there have been some bad loans made to companies, and the deficits and debt are problematic. In general, though, the economy has improved in the past four years. Another example is the success of US business, as represented by cash on the balance sheets at record levels. The case could be made that Obama has been much better for big businesses than for the unemployed and middle class.
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With all of the talk about jobs, Republicans have made few efforts to help create them, and cling to the myth that government spending does not create jobs. Obama’s cuts in spending have resulted in the loss of federal jobs. Ditto for lost jobs among at the state level due to cuts in spending. Gary, why don’t you address the inconsistency of spending cuts if your goal is to improve employment for the middle class? I don’t believe they go together, and I challenge you to show otherwise. Under President Bush, I suggest budget cuts did not occur because jobs would be lost faster and would have hurt his chances for reelection. A primary reason for cutting the budget now, under Obama, was to reduce his changes for reelection, not to fix the economy. That was a Republican talking point.
President Bush deserved some credit for his efforts as president, but most of these disasters that got us here occurred on his watch. He wasn’t personally responsible; he was just in charge during years of poor decisions and dishonest tax policies. The tax cuts never produced the jobs or economic growth that was promised – only bigger deficits and more debt.
Comparisons of growth in the recent five years to prior economic recoveries are incomplete in the article, because Gary does not assess the challenges inherited by Obama in 2009. Some people say that it was the worst economic period since the Great Depression. Many Congress people watched the disasters happen under President Bush, and now want to cut spending for social programs to fix what their dishonesty and bad decisions created. Dishonesty is a key to me, because some of the same false statements about the so-called benefits of tax cuts for the wealthy are still common in Republican rhetoric. The tax cuts were bad government decisions, then and now, when it comes to the debt and deficits.
Why didn't Wall Street use its own wealth to bail out the banks and the financial markets when the securities that they created went bust? Why didn’t the US government get stocks in the major banks instead of loaning them “free” cash to restore their balance sheets? And now that banks are healthy, why is it so difficult for homeowners and small businesses to get lower-interest loans, which were inferred after the giveaways to the banks? Less access to capital has certainly slowed the recovery of small businesses and homeowners. This is still a major problem that has slowed the recovery and could have been mentioned.
That is not to say that Obama has been great as president, but he did not cause this mess and has worked harder than Gary suggests getting congressional support to fix the economy.
- Presidents have little spending authority, so their direct impact on the deficit is limited. Congress approves spending, and Gary conveniently bypasses their duty for responsible budgeting. Just look at the Defense budget. Each year under Obama, Congress has voted more defense spending than was requested, with no consideration for how it would be paid off. That is bad government, to me, but Republican districts seem to benefit a lot from defense spending, so cuts have been slow to occur.
- Gary does not mention the irresponsible decisions that got the US into this mess. After all, eight years before Obama came into the office, there was a balanced budget on a current year basis and a prosperous economy. The president and Congress started two wars that cost billions of dollars daily. In addition, they misled the nation with the deception that economic prosperity would increase from two massive tax cuts. Well, now we know the result. The truth is that the deficit numbers were worse than reported, because some spending was off-budget to make deficits look smaller. The wrecked financial markets resulted in millions of job losses, and all of this occurred before Obama took office in 2009. Gary uses the worst financial year under Bush to add to his analysis of Obama, and reach his conclusion about how bad the past five years have been. I expect that we all agree that we have a challenged economy, but the blame placed is not fair or objective. Private industry deserves some credit for bad decisions, too.
- When will each of us take some blame for this economy? Americans love to spend, and buy whatever we view as important, but when the bill comes, we conveniently pass it to the next person. That is what Gary has done, and that is what Congress has done for years. The financial sector, of which Gary is a part, certainly contributed with its fraudulent securities and false financial statements that overvalued securities. Not one responsible financial executive has been brought to trial or gone to jail for the crimes that their businesses committed. I guess, though, that we should blame government for that, too.
- Before the 1960s, all Americans had a sense of duty to help pay for wars. Wars were for the benefit of all of us, so why not pay more taxes to pay the bills for our security? Gary, why aren't you taking all of us to task, especially those who lobbied for and received those big tax cuts at the same time that they were waging wars around the world? After all, it is the defense spending that has been the single biggest addition to government spending in the past 10 years. I believe all Americans should be taxed more, to pay for the wars. Fair is fair.
- I appreciate that Gary did not blame Obama for the 40%+ with no net worth. Actually, this is what a capitalist system can do without regulation. Gary, who has been fighting the financial regulations that may have prevented some of these calamities? Yes, I hear you, it is big government again and big spending to staff these positions. But, it would have been an ounce of prevention for the dollars lost in the bailouts and bankrupt financial institutions that the government insured. Our laws permit the rich and influential to take advantage of the weak, for their greater wealth. Out tax system in the past 10 years has shifted wealth dramatically toward the rich and away from the middle class. Mitt Romney and the 1% have tax loopholes which average Americans do not have, and it permits them to keep more income and pay lower taxes. For these reasons, Gary, why should we be surprised with the shift in wealth? We are getting the results what we designed in our tax systems. Politicians will not say that, but they are not taking steps to change it. Rather, they place blame, as Gary did in your article, to deflect attention and responsibility.
Gary, I believe the American economy is right where many influential Americans want it to be, so that they get richer. I don’t think that is popular to say, though. Paying one’s fair share in taxes is not popular these days. People who make millions will complain about their taxes being too high, even though tax rates are at much lower levels than in the past. It is popular Republican talking points to complain about taxes and that we don't need to pay for so much government services. The deficit would be lower if we cut the government spending. But, these same persons want to spend on what is valuable to them, such as defense and wars. That is what Congress has done for much of the past decade, and it helps to explain why there have been so few gains in the past five years. It sounds great, politically, to complain about unemployment and the trials of the middle class, but Congress does little to solve this. Republicans seem to oppose anything that involves spending to benefit the middle class.
Until each of us begins to share some of the responsibility that Gary so readily leaves at the feet of the president, there is little chance of success for us as a country. But, if persons like Gary, with the access to the wealthy, were more balanced and objective, and would tell more of the truth, then there might just be some hope for us after all.
Gary, I believe that readers of financial materials deserve balanced analysis based on truth. Your article did not offer as much as I desire to see. When you don't tell the truth about the causes of the problems in the US, you should not expect to see solutions and improvements, because our focus is on the wrong things. Look at the valuable wasted time in Congress on presidential appointments, but where are the hearings on economic improvements? The House of Representatives passed dozens of bills to limit women’s health options in the past four years, but how many bills were passed to improve the lives of the middle class? Not nearly as many.
Gary, my guess is that you are happy with the results of the economy overall, and it is just convenient “cover” to complain about the trials of the middle class. You don’t intend to do anything about them. That seems to be the Republican way of getting rich and staying in power in Washington. It seems to drive readership too, so maybe that is the reason that I object to some key aspects of your article.
The author, who asked to remain anonymous, is an executive with a financial services firm
