Why is Unemployment so High? – Original Post
(This is the original post – Why is Unemployment so High? Published on 8/17/2010. Due to high demand, this post has been revised. Visit this link to view the current post.)
Each of us is inherently locked into our own universe. In terms of how we view the overall state of our economy, our perspective can often be skewed by our own current circumstances. Even our own interpretation of history can be tainted by how we interact with events in our life.
For example, if you happen to be a Washington Elitist Politician, your perspective on the “state of the nation” is somewhat different from that of the average working American. You didn’t “feel” the recession and probably still don’t “feel” the depression. To you, it’s just a numbers game. A bunch of statistics printed on a piece of paper. In fact, the only thing that you actually feel is the heat coming from the little people who put you in office. And let’s face it; all you really care about is saving your own ass.
On the other hand if you are someone who actually works for a living, you have a somewhat different view. In 2007, everyone could see that the real estate bubble had popped. Home values started to decline and it was front page news almost every day. But this alone was not enough to concern most people. Even if you had recently purchased your home, a decline in value is really not that much of a concern. After all, most people purchase a home with the intent on living there for several years – at least. Even for those who had adjustable rate mortgages, the effects were not so life changing to cause alarm. Discomfort yes – but not alarm.
For most Americans, the first sign of the recession came in the form of super high gas prices which hit just after the real estate bubble had popped. All of a sudden, you began to actually feel the pain of income loss. As you were forced to pay higher and higher gas prices, you began to cut back in other areas of spending. First, discretional spending went away. You couldn’t afford to buy those new shoes, or buy that new 12hp self propelled lawn mower you had been eyeballing.
If you happened to own an SUV (who doesn’t?) you felt the pain a little more than others. It wasn’t until gas prices hit about $3.50/gallon that things started to really unravel. SUV sales sank like a rock – causing immediate layoffs in sales as well as production of large automobiles. Additionally, defaults on auto loans went through the roof, causing layoffs in the banking industry. This was the real start of the recession.
In any other time in our history, the damage to our economy caused by these high gas prices would have been limited to just the Auto Industry and Auto Financing. Just as it was during the 1970’s, when gas prices spiked to a record setting $1.10/gallon. This time however, we had the benevolent Barney Frank (D-CA) who oversees Fannie Mae (a government-sponsored enterprise chartered by Congress with a mission to provide liquidity, stability and affordability to the U.S. housing and mortgage markets.) – who insisted (through the force of law) that banks give 100% financing mortgages to people who could never have afforded to buy a house otherwise.
Despite three separate attempts by President George Bush between 2001 & 2006 to audit and overhaul Fannie Mae, Barney Frank insisted that there was no reason for concern. He personally assured the American people that Fannie Mae was on sound financial footing. On the other side of the coin was the now retiring senator Chris Dodd (D-CT) who chairs Freddie Mac, another government program which does the same thing as Fannie Mae – except for renters. Together the two of them killed every attempt by President Bush to reform their institutions. Had those institutions been reformed, we would not be having this conversation today. If there are any two people on this earth who share the most responsibility for our economic mess, it is Barney Frank & Chris Dodd.
Unfortunately the gas crisis and real estate crisis hit at the exact worst possible time – an Election Year. The Liberal Freaks saw an opportunity to gain control of the White House by exaggerating the dip in the economy. With the help of allies in the media, they pounded the television and airwaves with anti-Bush rhetoric. It didn’t matter that Bush was not on the ballot. By creating a panic, and associating that panic with Bush – they essentially hung all Republicans with a scarlet letter. It was a media blitz like never before seen in politics.
Nancy Pelosi & Harry Reid moved quickly to get the first stimulus passed and signed by President Bush. They wanted something that they could hang Bush with. They knew that it would never do anything for the economy, but by creating a panic they could force Bush to sign it. They would put Bush in an impossible situation. If he didn’t sign it, they would hang him with a stigma of being anti-American and get the willing media to portray him as un-American and un-caring.
It worked. President Bush signed the bill and stated that he “gave in on free market principles in order to save the market”. Of course this is idiotic, but without knowing what the Democrats had in store for the future he probably didn’t realize just how much of a mistake it would be.
The Democrats have done a remarkable con job on the American public. They have been able to get people to forget that when President Bush left office the unemployment rate was only 6.5%. People have forgotten that the Stock Market hit an all time high in the last year of his presidency. In fact, for the first 7 years of the Bush Presidency – our economy was better than at any time in American History.
But that is not what the news media tells you. They tell you that it was “Eight Years of Failed Bush Policies that got us into this mess”. Evidently in Liberal (dog) Years, One Actual year = Eight Perceived Years. The reason they say this is because they need people to believe that the only way to save our economy is to accept the socialistic agenda that they are pushing.
Take a real good look at the chart above. It is no coincidence that unemployment went up when Obama was nominated. Nor is it a coincidence that the unemployment rate jumps every time the Democrats pass more spending programs.
If you have never run your own business please take a moment to read and understand this. Employers have families that they care for – just like you. They are in business for one reason – to provide for their family. Yes, they often enjoy their work as well but the reason they own that business is to provide income for their family. When your employer sees that someone like Barack Hussein Obama, the most Liberal Freak on the planet (next to Nancy Pelosi) has a chance of becoming the President of the United States – they go into a defensive position.
This was absolutely obvious in the polling leading up to the election. Almost every time that a new report came out which showed that Obama was gaining ground – the stock market dropped. Conversely, when polls came out showing that he was losing ground – stocks rebounded. Why?
Because businesses (employers) know that Liberal policies will mean higher taxes, higher costs and lower profits. While some business owners may be more reactionary to conditions most actually plan for the future. They look at their books and say to themselves, it’s time to cut back. Plans for expansion are put on hold. Staff is cut. Cash is horded. They do this not because they are mean people. They do this in an attempt to save their business – and their family.
So when the Democrats started yelling, “FIRE” back in 2007 in order to gain a political advantage, they started a panic & stampede that led to the collapse of our economy.
Ask yourself this: Despite all the rhetoric – were you better off 3 years ago than you are today? Did you have a job 3 years ago? Did you have a house? Were you worried about losing everything you own? How was your 401k doing back then? Were you scared to death about your health insurance? Did it ever occur to you that you could go to jail for “Tax Evasion” for NOT buying health insurance? How many people do you know that were unemployed 3 years ago? How many do you know now? Did you ever think that unemployment would ever reach 17% in some states?
Three years ago – did you ever even consider that our Nation would be in the condition that it is today?
It’s not Bush’s fault – it’s the Liberal Freaks in Washington who started this mess. You have a chance to put an end to this madness in November. Don’t blow it like you did in 2008. You can still save your family and your lives if you chose to vote these freaks out. Every, Last, One – of them.