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EDITOR: I must answer my friend Greg Post’s response to my letter answering the question “Are we better off than four years ago?” In my original Letter to the Editor, I shared the evidence that demonstrated how my family was definitely better off. Greg responded with a lengthy letter addressing national issues. If you look to the big picture for the nation, the answer is that we are absolutely better off! I am an historian, so here is a history lesson about the last four years. I also have a degree in Economics from Stanford University and will use my expertise to point out how the indicators show how the economy is moving steadily toward recovery.
“Four years ago” would put us roughly at Sept. 1, 2008. George Bush was President. Between Sept. 1, 2008 and Jan. 7, the date of Obama’s inauguration, the following happened:
1. We had two wars still going full bore, and not too well at that. Both wars were “off budget” — that is on our credit card.
2. During September 2008, AIG, the world’s largest insurer, went under, as did Lehman Brothers, Bank of America, Merrill Lynch, Chase and a host of others were teetering on the edge of bankruptcy.
3. Stock prices were plunging, as were 401(k)s … (My retirement account was being devastated.)
4. The federal budget was snowed under by deficits caused by a Medicare prescription benefit of $800 billion (unfunded), two wars ($900 billion per year-unfunded) and a $3 trillion tax cut (unfunded).
5. On Sept. 25, 2008, Henry Paulsen, Bush’s Secretary of the Treasury, went to Congress and asked for a bank bailout. John McCain interrupted his campaign to lobby his colleagues to vote for the bailout. Every Republican, and a few Democrats voted against it.
6. Sept. 29, the stock market fell over 800 points! (My retirement account was cut in half … along with the accounts of many of my fellow Americans.)
7. Oct. 1 — Congressional Republicans come to their senses and vote for the bailout. Bush signs it into law and banks are loaned hundreds of billions — no strings attached, you may recall.
8. October and November — Banks hoard the Fed loans and refuse to loan to businesses. Without money, businesses lay people off, unemployment soars to 10 percent. Both my sons-in-law and grandson were laid off … for eventually two years.
9. Without liquidity and loans, the real estate market also tanks.
10. November and December — Things went from bad to worse.
Please note carefully — all the above events occurred under Bush (including everyone’s 401(k) going into the dumpster).
Feb. 2, 2009 — Obama takes office. He inherits the Bush budget until Oct. 1, 2009 (that’s how the federal budget works — every new president inherits his predecessor’s budget — and deficits).
The economy could have improved sooner and faster. Classic economic measures that have worked in the past have been blocked by the Republicans. For example, the Republicans blocked a larger stimulus package from being passed, which inhibited the recovery. Republicans blocked the legislation which would have provided employment for veterans returning home from the Middle East. While free enterprise jobs are on the rise, austerity measures at the state and local levels have led to the hundreds of thousands of public employees being added to the unemployment rolls, elevating the unemployment rate.
El Dorado County is a perfect example. Many government workers are now unemployed due to cuts in Placerville, El Dorado County and the state of California … and these workers have cut their own spending on “Main Street.” This has really damaged so many of our small businesses.
Increasing police and fire positions in El Dorado County would make us safer and stimulate our economy. This would be a classic Keynesian move that would stimulate the economy and bring in increased tax revenue that would help cut the deficit. Again, such efforts along these lines have been blocked by the Republicans. We are less safe and businesses are struggling as a result.
It is clear we do not have a full recovery for all, but we are headed in the right direction. All the economic trend lines are headed in the right direction toward a full recovery for the nation. Unemployment is steadily improving, manufacturing is up, we are becoming more energy independent than any time in recent history, and interest rates are at a record low, making capital available to businesses.
Small businesses can take advantage of many new tax reductions under the Obama administration. Sales of homes nationally are on the rise and property is beginning to appreciate again … meaning equity restoration is beginning for many families. Many families have refinanced their homes, cutting their housing costs. New government-sponsored loan modifications are starting to save families from foreclosures. Several free trade agreements have been successfully negotiated recently. Our economy is outperforming Europe! Capital from around the world is looking to the U.S. as a safe haven.
Thankfully, everyone in my family is back to work. My retirement account is back in good health … and I am enjoying retirement helping care for my grandchildren and doing local volunteer work. I see life improving for families around my neighborhood, our community and across the land. So many peoples’ prayers are being answered.
Are we better off now than four, or five, or six years ago? We sure are. God Bless America!
GEORGE SABATO
Placerville
The Mountain Democrat does not necessarily condone the comments here, nor does it review every post. Read our full policy
DarrinOctober 16, 2012 - 10:41 am
Great letter. Thanks Mr Sabato. It is fascinating to see the lack of response from the usual suspects on this letter. When irrefutable facts and figures are submitted the attacks are mitigated. Good to see some folks can have a disagreement but still be civil to one another without resorting to name calling. Until now...
James E.October 16, 2012 - 10:51 am
Perhaps someone could send a copy of this letter to Mitt, Paul, and the Republican Committee of El Dorado County. A little dose of real might help all three.
DB SmithOctober 16, 2012 - 12:20 pm
Why don't you send the letter James E.? And while your at it send extra copies to the millions of people on Welfare and Unemployment and they can call you and Mr. Sabato back on their free Obama cell phones to tell you how good things are going for them. And now the American taxpayer just lost $249 Million bucks for yet another failed solar company. How many people will get laid off from Johnson Controls? I'm glad Mr. Sabato, his family and his neighbors are doing so well and are better off. They could be the exception.
James E.October 16, 2012 - 12:35 pm
Is that DB Smith again? No, just the wind.
DB SmithOctober 16, 2012 - 12:59 pm
Now come on James E.. You wanted to see me after the election, you wanted to con me, you wanted to ride in my elevator, you wanted to sit in my car w/me, you wanted to borrow money from me and now you want to throw me to the wind. What kind of Dem/Lib crap is that? Typical. You should get that ear buzz checked out sir.
DB SmithOctober 16, 2012 - 2:13 pm
Hola votantes Latinos. Le pido que por favor tome tiempo para ir a las cabinas de votos en noviembre 6th a emitir su voto en esta eleccio'n muy importante. Obama Presidente ofrecio esperanza y cambio en 2008 pero nuestras esperanzas han sido destruidas y los cambios no han sido buenos. Debes darte cuenta de que el Presidente y su administracio'n han hecho nada de importancia para la presencia de Latinos aqui' en Ame'rica. Todo lo que los Demo'cratas y liberales no es pander la ilegal emigra por lo que pueden ganar votos. Asi' que le pido que por favor considere votar por Romney/Ryan para que podamos todos tenemos m'as puestos de trabajo y ver nuestras comunidades prosperan nuevamente y podamos mantener la cabeza alta. Federico Garcia Lorca dijo una vez, "la ma's terrible de todos los sentimientos es el sentimiento de la esperanza habi'a muerto".
James E.October 16, 2012 - 3:16 pm
Again, DB Smith or just the rustle of the leaves outside my window? As I listen to those low sounds, I'm reminded of West Point where, if a cadet violated the corps norms, they were forever silenced. Well, not forever, but only spoken to strictly on official business. And, as there is no official business on the MtDemocrat site, forever silenced and relegated to vague sounds on the wind.
DB SmithOctober 16, 2012 - 3:35 pm
Another cop out James E.. What are you charging me? Lying, cheating, stealing, no toleration? This sounds exactly what you and your Dem/Lib Party population is doing. You act as if you are the great decision maker. We are not at West Point but here in little old Placerville. And if we were at West Point I would abide by the rules. If you could be more specific in your vague charges sir I would gladly respond. Swish.........
RichOctober 22, 2012 - 8:06 am
DB Smith seems to be overwhelmed with right wing dogma, get a grip girl……..
Thomas GibneyOctober 22, 2012 - 8:07 am
Wasn't there a Dem Congress in the last years of George Bush....??? In the last three years I have personally not been able to aquire a decent permenant job I also note many a small business evaporating...but maybe I see things differently. Glad to see somebody is doing well, perhaps my rose colored glasses are a bit dirty...?
robertdnollOctober 22, 2012 - 8:32 am
i knew we could visit fantasy-land at Disney world,i didn't know you could live there
Evelyn VeerkampOctober 22, 2012 - 9:20 am
Mr Sabato writes (unsupported) that manufacturing is up. However, in September the LA Times wrote "Decline in factory jobs clouds employment outlook", citing the Labor Dept report of 15,000 jobs lost the prior month. Earlier in the year the ITIF had published its 78-page document, "Worse Than the Great Depression: What Experts Are Missing About American Manufacturing Decline". Though I've not provided the links (comments with more than one link are rejected) both articles can be found simply by doing a search on their titles.
Things have gotten better for Ray NuttingOctober 22, 2012 - 5:50 pm
Well, things have gotten better for Ray Nutting, when he was elected for his first term to the El Dorado County Board of Supervisor he was making around 30 thousand a year. Now he makes three times what a supervisor in Nevada County makes, which is a lot more than 30K, so things are getting better.
JackOctober 22, 2012 - 5:55 pm
Col James: Republicans don't deal in 'facts' as you and I, physicists and philosophers understand them. Their only way to deal with facts is to go for the personal attack or to nitpick selectively while missing the big picture. Or, as Mitt and ryan did, they just lie through their teeth, pandering to folks like DBSmith who would not know a fact if it hit him in the face.
Nathan EdgecombOctober 22, 2012 - 8:02 pm
It's always intersting to read how someone thinks we are better than we were 4 years ago given the way in which George Bush completed his second term in office. However let's not forget what has transpired since that time. Let's start $4.00/gallon gas, which yes is partly by the speculaotrs but in reality is being driven by the lack of drilling permits being issued. Let's talk about crony capitalism, namely Solyndra, and most recently A123. Let's talk about Libya and the intelligence failures by this administration. Let's talk the lack of transparency in gevernment being shown by this administration and by al means let us not forget Brian Terry and the fisaco that is Fast and Furious. Oh yes, we are most certainly better aren't we?!
DB SmithOctober 22, 2012 - 8:18 pm
Here's a couple of facts for ya Jack. Romney wins and Giants win. Man ~ what more could you want? We got a whole lot of happy folks here. Chill out dude!
James E.October 22, 2012 - 8:23 pm
If Mitt is elected gas will be $1.00 a gallon and all major oil companies will operate at a loss. Sure. Plus, I only watched the debate for a moment as the ball game had priority -- I did enjoy my peek when Mitt made the point that we have fewer naval ships than we did in 1917, and the president had to educate him that we have naval ships (aircraft carriers, undersea boats) that are matched to national strategic objectives and it's not a boat number game. Mitt used a tired talking point and got slam dunked decimated on his naval experience. Giants are 8-0, bottom of the 8th.
James E.October 22, 2012 - 8:51 pm
Giants win third in a row -- World Series on Wednesday.
TerryOctober 22, 2012 - 9:11 pm
Mr. Sabato, I am glad your family is doing at least as well as they were four years ago. However, for someone trained in economics you seem to ignore all the major statistics. Food stamp usage is up, millions are still unemployed or underemployed, young graduates are in significant debt with no or little job prospects, business capital is still hard to find, our economy is growing at a very meager rate, etc. Yes, the stock market is almost back but is still below its former highs and that is not adjusted for inflation. Food, gas and healthcare prices are up. Housing is down, which is good if you are a buyer or renter but stinks if you are a seller. Mr. Sabato, I suggest you further enhance your economics education by reading the book “Unintended Consequences” by Edward Conard. It spells out how we got in this mess, what we have done wrong and how to get out of it. Virtually everything the current administration has done has either not helped or has made the situation worse starting with your favorite, Keynesian economics. We had a bank crisis that was triggered by the real estate bubble bursting. The banks could have weathered this without assistance but it was followed by a run on the banks to the tune of $1.5T. This is what TARP was engineered to stop. This run was not by individuals as we are protected by FDIC insurance but was by large institutional (domestic or foreign) investors, unnamed. While the short term crisis has been contained and the banks have mostly paid back the money, this structural problem has not been addressed. As such the banks are now reluctant to resume loaning short term risk averse capital (our bank deposits, those of pension funds, and those of foreign countries) to entities requiring long term risky investments. These are the investments that fund innovation and drive our economy. Hence the economy remains stagnate. This is a structural problem that stimuli cannot address. Also if you look at the stimulus program that did pass, you will find that most of it did not go to capital improvement projects but to shoring up state and local governments and their associated pension funds or was wasted on pet congressional projects that had little to do with future economic growth. Corporations are again profitable because they took the opportunity to shed the dead wood, be it employees, departments, products, etc. However, I have not seen government, federal or state, do likewise. Our federal government continues to grow. Our state government has trimmed some but the significant restructuring and elimination of duplication has not been done. In closing, I am glad you and your family are doing as well as four years ago. Many Americans are not. Our economy over the 20 years previous to the bust grew significantly faster than Europe and Japan. However, the current economic policies have and will continue to put us on a path to stagnation.
Jack MartinOctober 23, 2012 - 1:57 pm
Are we better off? Here's some low hanging fruit for your consumption, from http://www.usgovernmentdebt.us/fed_us_real_gdp_chart_09_k.html#view In this present economy, we bottomed out in 2010 at $12.615T in GDP. That's when we hit "Recovery Summer", remember? Yeah those were the heady days... So our GDP in 2011 was $12.982 T, for an anemic (but welcomed) increase of 2.91 %. We continued to soar into 2012 with lofty economic expectations but found that our real GDP had actually begun to slow again. We saw a GDP of $13.351 T, representing an increase of 2.84% over 2011. Projections for 2013 are presently at $13.727 T, representing a blistering increase of 2.81% over 2012. 2.91, 2.84. 2.81....see a pattern here? OK, OK, if you're an Obama voter, I suppose you don't, but the rest of us do see this pattern and more importantly, we are going to change it.
prime timeNovember 17, 2012 - 1:21 pm
Silver & Gold – Debt Collapse
prime timeNovember 17, 2012 - 1:25 pm
VTB Capital to start issuing 'golden bonds'