President Obama Touts the Anemic Jobs Recovery

I have to give President Barack Obama points for this, not many politicians would publish something so truthful about their time in office.

Who do I blame for that big jobs hole, the Great Recession of 2007-2010? It's a bipartisan list:

George Bush - Recession proved too big for the buck to stop with one President.
Henry Paulson - Collapse occured on his watch as Treasury Secretary.
Dick Cheney - He reinvented deficit spending with his trademark recklessness.
Don Rumsfeld - Cost of bailing him out of Iraq was the catalyst for the fall.
Nancy Pelosi - Power of the purse could not have been in worse hands.
Barney Frank - His blustering lack of financial industry oversight was criminal.
Chris Dodd - He was paid off and moved to Iowa to campaign for President.
Harry Reid - Signed all the checks and didn't provide any balances.
Ben Bernanke - Saw this coming all the way and failed to act.
Alan Greenspan - Cheap money was the bad wiring that sparked the fire.

That's 4 Republicans, 4 Democrats, and 2 central bankers.

We must remember that the cause of the Great Recession was essentially a systemic problem with a few big over-extended Wall Street investment firms, which dragged down the otherwise sound U.S. economy. The resulting financial crisis had its biggest effect in housing, where crazy lending fueled a bubble that was bound to burst. And automotives, where most consumers cannot buy the product without credit.

Public anger directed at the 2008 bank bailouts is misplaced, in my judgment, mistaking the symptom for the disease. The real failure was letting the financial system get to the point where bailouts were so desperately needed. Action should have been taken in the summer and fall of 2007. Preventive steps could have been taken in 2005 or 2006.

Barack Obama the candidate seemed to get it when he campaigned against the Bush deficits in 2008. But we now have a situation where the U.S. debt has been run up to $49,500 per person and $137,000 per taxpayer, twice where we were in 2004, 2.5 times where we were in 2000. Paying off that debt, hell just paying on the interest alone, is going to be a drag for the next 30 years.


Addendum: It wouldn't be fair to the politicians not to also comment on the private sector firms:

Sowood Capital - This hedge fund you've never heard of closed shop after losing 50% of its $3 billion capital in July 2007. It should have been the canary in the coal mine.

Bear Stearns - Its failure due to subprime lending losses in early 2008 was just the tip of the iceberg. Shareholders got 7.5 cents on the dollar.

Fannie Mae and Freddie Mac - These GSEs were designed to buy off politicians and leave the tab to taxpayers, history lessons from Newt Gingrich notwithstanding.

Countrywide - Passed out loans to politicians so it could pass out liar loans to borrowers and pass these off to unsuspecting investors.

Lehman Brothers - Its bankruptcy in September 2008 triggered the biggest selloff in history. Over the ensuing six months, stock markets around the world lost $33 trillion.

AIG - Regulators forced out the CEO in 2005. The insurance company still had to be rescued by taxpayers in 2008 with shareholders getting 1 cent on the dollar.

Merrill Lynch - It's forced sale by Henry Paulson to Bank of America for a sweetheart price got the BOA CEO fired for excessive patriotism.

Madoff - A handy scapegoat whose unrelated Ponzi scheme was just a drop in the bucket. He was sentenced to 150 years in prison.

Citigroup - Too big to fail but not too big to flail. The TARP bailouts were essentially designed to hide that Citigroup was insolvent, and maybe still is.

Chrysler - Holds the distinction of being bailed out twice, by George Bush in December 2008 and by Jimmy Carter in 1979. It's now owned by the Italian company Fiat.

General Motors - Lost money in 2007 only to see its sales plunge 45% in 2008. Steve Rattner, Obama's car czar who "saved" the company, has since been dogged with "unrelated" corruption charges.

MF Global - New Jersey Democrat Jon Corzine caught short speculating on European bailout prospects with other people's money in October 2011, way after Dodd-Frank was supposed to prevent such things.

It is surprising looking back at this list how few of the firms were banks. Investment banks, yes, but traditonal banks, no. Only two nonfinancial firms got bailouts. It is a testament to the culpability of the politicians that nobody, besides Bernie Madoff, has gone to jail.