The Moonbats, unsurprisingly, miss the point.
Wages are affected by Supply and Demand, just like any other good or service. When the government damages the conditions for economic growth so that there is an Excess Supply of Labor, Wages are not going to increase.
You want higher wages, free up the economy to grow so that there is more demand for labor...instead of spending $4.8M per job to create a paltry 3.5K of Green Jobs.
Since 1980 America has steadily deregulated the economy, "freed it up" to set the markets free. This reached its current apex in the early 2000s under george bush who went on a deregulation binge especially with the financial industry. So markets had never been freer in the first decade of this century than they'd been since the 1920s. And exactly what happened? Bush got the worst job growth of any president. Also, too. Since we started deregulating corporations have foun d less and less demand to cater to and invest to meet. They're steadily accumulated money and are sitting on uninvested trillions of dollars. This accumulation of cash continued all through the GW Bush years, the period when markets have never been freer. So, bearing this in mind, why wasn't there massive job growth in the 2000s when markets had never been freer in living memory?
Obamacare is deregulation?
Please show me some of the deregulation that occured in the financial industry under Bush.
Was Sarbanes-Oxley the deregulation you were thinking about?
BTW, Obama has the worst job growth of any President.
Bush deregulated the mortgage industry pretty much entirely. one of the major changes was that he changed the rules so that banks and mortgage originators no longer had to hold mortgages to maturity and could sell them immediately. This allowed the newly unregulated mortgage providers like Countrywide and Ameriquest to go on a huge lending spree and immediately sell their mortgages on to Wall Street firms who sliced and diced them and turned them into securities. The same securities that went toxic and blew the global financial system up in 2008. Here's a 2003 press conference that announced the deregulation of the mortgage industry :
See the guy on the left of the picture? The guy holding the chainsaw to the stack of regulations? He spent his career as a Washington lobbyist for banks and financial firms. he basically spent his entire career lobbying Washington to "cut red tape" for his clients and set the markets free to bring us all unparalleled prosperity! In a stunning fox/henhouse move when he took office in 2001, Bush put guys like this in charge of all the various bank regulators. The chainsaw guy was actually responsible for regulating AIG. AIG, the firm that cost taxpayers so much money when the Bush administration socialised their losses, were based in New York and london so naturally th chainsaw guy had them overseen by one guy working from an office in the midwest, when a firm like that would obviously need dozens of regulators to be effectively regulated. AIG decided they didn't want to let him through their front door and called the chainsaw guy to call him off.
The Bush SEC, also run by a guy similar to Chainsaw man, allowed Wall Street securities firms like Goldman to lever up the debt: assets ratio from an historically safe 10:1 to 30 and more :1. These guys argued that because they were sitting on tons of newly-created rock-solid AAA-rated mortgage securities made from all the new mortgages that were being writtten that they were far safer than before and so could take on huge increases in risk, and the SEC said OK. This allowed them to really rack up a really impressive level of losses in just a few years.
Now those mortgage securities wouldn't have been a problem if they hadn't been able to get a AAA rating. To turn these crappy mortgages into AAA-rated paper would be impossible as the people responsible for rating them would never issue AAA ratings to crappy mortgages once they analysed the loan tapes and the other paperwork, right? You know what's coming next, yes, ratings agencies had been left to self-regulate too. Analysts were actually fired if they refused to rate stuff they knew was garbage. Here's one small piece of evidence that became public knowledge a while ago, an IM conversation between two analysts :
Rahul Dilip Shah: btw -- that deal is ridiculous.
Shannon Mooney: I know right ... model def does not capture half of the risk
Shah: we should not be rating it.
Mooney: it could be structured by cows and we would rate it.
News Headlines
Here's another one :
Oct. 22 (Bloomberg) -- Employees at Moody's Investors Service told executives that issuing dubious creditworthy ratings to mortgage-backed securities made it appear they were incompetent or ``sold our soul to the devil for revenue,'' according to e-mails obtained by U.S. House investigators.
The e-mail was one of several documents made public today at a hearing of the House Oversight and Government Reform Committee in Washington, which is reviewing the role played by Moody's, Standard & Poor's and Fitch Ratings in the global credit freeze.
Credit-Rating Companies `Sold Soul,' Employees Said (Correct) - Bloomberg
So now it was possible to create AAA-rated paper, the same credit rating s US bonds and stuff banks could describe as Tier 1 capital on their balance sheets, out of million dollar mortgages made to unemployed meth dealers. And then you had huge side-bets on these garbage securities via derivatives like credit default swaps which ended up a far bigger market than the value of the actual securities themselves.
The vast majority of bad lending wasn't even subprime. Losses from prime loans have already dwarfed subprime losses and there's huge amounts of prime defaults yet to come, an impending commercial real estate crash not too far off as well. Subprime was just the canary in the coalmine and a handy way for the right to blame the meltdown on ethnic minorities.
But when mortgage companies went on a lending rampage of lending to people who shouldn't have had mortgages, people who were previously known as "renters", there was a mechanism to prevent it happening. We'd already had something very similar in the 1920s so a bunch of FDR-era regulations and regulators existed to prevent any wide-scale predatory lending from happening again. I'll let the New York AG take up the story there :
Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders. Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks. These and other practices, we noticed, were having a devastating effect on home buyers. In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.
Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners. In fact, the government chose instead to align itself with the banks that were victimizing consumers.
Predatory lending was widely understood to present a looming national crisis. This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government. Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices. Several state legislatures, including New York's, enacted laws aimed at curbing such practices.
What did the Bush administration do in response? Did it reverse course and decide to take action to halt this burgeoning scourge? As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.
Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.
Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC). The OCC has been in existence since the Civil War. Its mission is to ensure the fiscal soundness of national banks. For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function. But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.
In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.
But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.
Eliot Spitzer - Predatory Lenders' Partner in Crime
And so on. There's endless more stuff but I think I got most of the really big ones there.
Which scenario do you reckon will create more jobs? 'Trickle Down' is a scam.
