Dow is back to where it began under Bush and still falling

Remember all of the hype during the Bush years about how well the market was doing, as if that was proof that America was doing well? Guess what? On Clinton’s last day, the Dow closed at 10,587 and the S&P500; at 1,342. And the numbers yesterday? The Dow closed at 10,609 and the S&P500; is now 1,156. Your 401K? How’s that doing? We know by now that the Wall Street hotshots have made a killing in the last eight years thanks to the McCain-Gramm-Bush economic policies that created havoc. For average Americans who have been counting on their retirement money to grow, tough luck. Americans assumed – wrongly, of course – that somehow we still had basic regulations on Wall Street and that we would be protected. The GOP crowd told us that sure, it’s all fine because “the market” would take care of things and we would be fine. Gambling is OK when you have millions and billions but when you have to scrimp and save every penny, you deserve much more. The Republicans all lied so their friends could have high times.

What makes all of this an even greater concern is that even with the Bush-McCain economy tanking, we are not at the end nor is the end even close. This analyst believes we are only 40% through the market capitulation. The direction of the market is pointing towards much more volatility, with more failures and more bailouts. Another very bad sign – similar to what we saw last year when British bank Northern Rock failed – is that banks have stopped lending to each other. This suggests a system that is locking up, even though taxpayer dollars have been repeatedly injected into the banking system. The banks are getting “free” money (at 2% when official inflation is closer to 4%, real inflation is much closer to 10%) from the taxpayers but they are too busy covering their own bad positions, they don’t care about money movement.

When we get through this, and we will eventually, we have to re-think our current system. “Too big to fail” failed us in the Great Depression and is failing us yet again. (Common thread here…Republican economic theory.) Market consolidation is where we are headed in the near term but long term, that system can not bring us back to this same problem again and again. We need a common sense approach and not a fool talking gibberish to cover up his close ties to the creator (and coward who hides from it) of this mess, Phil Gramm. (h/t to Jerry O for pointing out the zero growth on the Dow under Bush.)

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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