How George W. Bush and Barack Obama Destroyed the Black Middle Class

In June, a poll conducted by the largest social network for African Americans, BlackPlanet.com, and NewsOne.com of 1,100 African Americans, revealed that 88 percent of them believe the economy has been better under President Obama than former President George W. Bush. The truth of the matter is that both Bush and Obama have basically, through their expansionary economic policy, destroyed the black middle class.

Since 2005, the wealth of African Americans — who now have the highest unemployment rate at 16.2 percent — dropped 53 percent from $12,124 to $5,677. The median wealth of white U.S. households in 2009 was $113,149, compared with $6,325 for Hispanics and $5,677 for blacks, according to the analysis released Tuesday by the Pew Research Center.

When President Bush took office, unemployment stood at a respectable 4.6 percent. Next, Bush put in place a tax policy that favored the rich and created a national debt that will probably have grown 70 percent by the time the current president leaves Washington. Now we have a swelling cascade of mortgage defaults; a record near-$850 billion trade deficit; oil prices that are higher than they have ever been; and a dollar so weak that for an American to buy a cup of coffee in London or Paris — or even the Yukon — becomes a venture in high finance.

Despite their political differences, both President Bush and Barack Obama have employed the same fiscal policy, since both were confronted with recessions. But unfortunately, their expansionary economic approach did more harm and impacted African Americans disproportionately. First, it increased the federal debt. Obama’s fiscal year 2012 budget proposed a $1.07 trillion deficit, even though the recession was over and first budget in fiscal year 2010 ran the highest deficit ever — $1.6 trillion. Prior to Obama, Bush’s last budget, for fiscal year 2009, started out with a $500 billion deficit. However, Treasury Secretary Hank Paulson’s TARP plan was added to it, not to mention the $500 billion deficit to fund the war on terror.

During the administration of George W. Bush, the U.S. economy started a downward trend. Consequently, those hurt the most were blacks, since the average black household lost over half its wealth between 2005 and 2009. Black homeownership hit an all-time high in 2004, with 50 percent of African Americans owning their homes, according to census data. Presently, the black homeownership rate is 45 percent, with around 8 percent of African Americans who bought homes from 2005-2008 losing them to foreclosure, compared with 4.5 percent of whites, according to an estimate by the Center for Responsible Lending.

For millions of African Americans, under Bush and Obama, the reality is that unemployment is still rising and job loss is pushing many back into poverty at historic levels.

In 2004, the median net worth of white households was $134,280, compared with $13,450 for black households, according to an analysis of Federal Reserve data by the Economic Policy Institute. By 2009, the median net worth for white households had fallen 24 percent to $97,860; the median black net worth had fallen 83 percent to $2,170.

Yes, many will point to Obama inheriting the Bush economic mess as a reason to defend the current president. But the truth is that he, in concert with Bush, contributed to the growing black unemployment rate and the reduction of the black middle class.

2 Scoops Please: When a double dip recession is a depression

Congress and most politicians are not in the real world. They do not cut their grass, go to PTA meetings at public schools or wash dishes. Rather, they have lifelong guaranteed pensions and health insurance, there children attend private schools and to top it off they take a five week vacation and Obama celebrates his birthday by raising millions of dollars for 2012. These folks are not like us, but I have said this before as well as that there is no difference between democrats and republicans. I mean more than 40 percent of senators are millionaires with democrats comprising four of the top five and more than 230 members of congress are millionaires.

I hate to say it (not really but I warned folks three years ago that we were in a depression, that the fat lady had not started to sing and the vultures were circling. All was based on the premise that our solutions from a federal standpoint are topical and isolated, ignoring that we are not in a closed economy as we believe, but rather a global economy. Keynesian approaches cannot work as they did in the times of FDR for we are no longer on a gold standard and because spending is moot since most dollars will go to foreign debt holders who will spend the money abroad and not here to create jobs in the US.

First no matter what we do or don’t do via political dysfunction cannot the escape from the fact Europe is financially crisis from the run on banks in Greece or the observation that Italy from September 2011 will be broke to the fact that the risk related to both Spain is and Italian government bonds is unsustainable and unbailoutable (if such is a word). This is essential to understanding the US economic crisis because 25 percent of our exports go to Europe and a large corpus of our business operates out of Europe. Making money in Europe has sustained us but it may be over because nations with bond yields above 6 percent in two days market terms (Italy and Spain) will eventually destroy the European economy. Not to mention none of our debates, even the recent debt ceiling debacle do not deal with this or address what is at issue – long term economic growth.

The danger zone confronting Europe is hitting America. Pundits fear the ubiquitous double dip recession but the truth is that we are passed such and already in a depression. Our structural weaknesses accumulated during the boom years are still not being addresses. The U.S. is headed not just for double dip recession but rather a full-blown depression. Obama, following the bush inept plan to grow the economy only temporarily interrupted by a bunch of stimulus which ultimately weakened the economy further (2 million more unemployed since it started).

So to understand this, go to your local ice cream parlor, if you can afford it, and order two scoops of ice cream, and see how long it take for both to merge into one. Yes a double dip recession does equal a full blown depression.

Is Economic Collapse a Certainty? You do the Math