A year ago, the U.S. stock market was at a 12-year low. President Barack Obama had just taken office, in the middle of the worst economic collapse since the Great Depression. At the time, there seemed to be no bottom to the disaster, and increasing numbers of people were losing their jobs every month. People were scared to spend, banks to lend, and businesses to invest.
Well, we're still in recession, and unemployment is still sky-high, so people aren't happy. But as far as I can tell, we couldn't have hoped for such a quick turnaround, not in our wildest dreams. Although health care reform is still stalled, President Obama got a stimulus package through Congress almost immediately. OK, I would have preferred fewer tax cuts and more spending on education, scientific research, and 21st Century infrastructure, but politics is the art of the possible.
From that low on March 9, 2009, the Dow Jones Industrial Average is up 61%. That's in one year! My own investments have increased 76%. (Luckily for me, I scraped together every bit of cash I could - not nearly enough - and invested it right at the bottom, just because I felt that panic had set in. As Warren Buffett says, "be greedy when others are fearful.") You can bet that I'm feeling better now than I was a year ago!
Unemployment is still very, very high, but that's a lagging economic indicator. It tends to be one of the last things to pick up when a recovery begins. (The stock market, on the other hand, is a leading indicator. It typically moves first.) When President Obama took office, we were losing more jobs every month than we had lost the month before. Unemployment was accelerating. Almost immediately, though, that turned around. We were still losing jobs, but fewer and fewer every month. That was really quite remarkable. It's not nearly enough, since stopping the hemorrhaging is never enough, but these things take time. This was a huge disaster, and we went into it with record-breaking deficits and two ongoing wars.
I've heard it claimed (by people who've recently proven they couldn't be trusted to manage a 4-year-old's piggy bank) that since most of the stimulus money hasn't yet been spent, we didn't need it. How dumb is that? People don't make economic decisions based entirely on current circumstances, but on their expectations for the future. If they'd dumped money out of helicopters a year ago, fearful people wouldn't have spent it all. They'd have saved as much as they could (just as they did with tax cuts). With the stimulus spread over a few years, businesses could be more confident of future earnings, not just a one-time windfall, so they'd be more likely to hire someone new, or at least not fire as many people as they would have otherwise.
Now it pains me to say anything good about the Bush Administration, but I've got to give credit where credit is due. The TARP program - the so-called bank "bailout" - was developed and pushed through Congress by the Bush Administration in 2008, before Barack Obama took office. OK, sure, it was the least they could do, after the mess they'd made of everything. And it could have been a lot better. However, it did keep our financial system from melting down entirely. Without that, we'd really be in a world of hurt today.
I know TARP is not very popular today. Heck, John McCain is even trying to pretend that he didn't know what it was when he voted for it! (Heh, heh. I don't know how he expects to look good from that admission, even if anyone is dumb enough to believe it.) Partly, I think that people are just confused about the whole thing. They keep hearing that the banks were "bailed out." Well, the stockholders - the owners of the banks - certainly weren't bailed out! But it's true that a lot of high-paid bankers got to keep their jobs, thanks to us,... and they certainly didn't deserve their good fortune!
However, I've never been in favor of cutting off my nose to spite my face. It wasn't fair, certainly not. By any standards of fairness, almost all of those bankers should be unemployed right now. But so what? We had to rescue our financial system, or we would have been back in the Great Depression again. Yeah, it's the same old story: capitalism for the poor and socialism for the rich. It shouldn't be that way. But when faced with absolute catastrophe, you have to do what you have to do. Fair or not, it was necessary. We'd be better off now putting standards in place to prevent it from happening again, not whining about how unfair it all was. Yes, we all know it was unfair. Get over it!
As I say, that was the "loyal Bushies," and I've got to give them credit for it. They could have made it lots better, no doubt, but compared to everything else they attempted over eight years, pretty much all of which was an absolute, unmitigated disaster, you really have to think of the TARP program as their greatest achievement, their crowning glory, the one thing that was actually fairly OK - or, at least, necessary.
I don't know where we go from here. With the Tea Party loonies scaring the GOP out of what little wits and morals they've got (and the Democrats still with no spines), I'm less and less confident we'll move forward, certainly not in the bold ways we need to move forward. We've been on the wrong path for decades now, culminating in the eight disastrous years of the Bush Administration, the worst in U.S. history. We need major reform, and no matter what we do, it's going to take time. Frankly, I'm just worried that we Americans have simply become too dumb, too ignorant, too gullible, too short-sighted, and too cowardly to face the truth and do what is needed.
But all in all, this past year was encouraging. It could have gone a lot worse.
Ahead on the 5/22 Maddow show - Tonight's guests include: Wesley Lowery, reporter for the Boston Globe, live from Orlando Jeh Johnson, former Pentagon general counsel Rep. Carolyn Maloney...
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