Dear editor:
I rarely agree with Larry Bauer on anything political, but he makes one statement in his letter of the Jan. 2 issue that is correct when he states, "A real good economy, 3-5 percent growth, produces prosperity." The rest of his letter oversimplifies the economic issue.
As per his usual deriding missiles, again he blames President Obama and his eight years for the problems of Social Security and Medicare, as if those problems suddenly took root in President Obama's tenure, and for what he calls an "anemic" economy. Bauer does not present any details of the background for the "anemic" economy that President Obama inherited.
If one recalls the facts, in 2007, the stock market had risen to an all-time high above 14,000. Then it began falling to 13,000, to 10,000 and by October of that year, 8,000. Folk nationwide started asking for their money, only to discover several "big" banks could not pay. Bear Stearns was about to collapse and Merrill, Lynch and Lehman were not far behind. The U.S. Senate concluded the crisis was the result of "high risk, complex financial products, undisclosed conflicts of interest, and the failure of regulators, the credit rating agencies, and the market itself. Banks were simply lending to those who could not afford the loans.
The repeal of the Glass-Steagall Act in 1999 (creating the so-called too-big-to-fail banks), coupled with the Commodity Futures Modernization Act of 2000 (ensuring the deregulation of over-the-counter derivatives) both contributed greatly to the crisis. The government, then in the Clinton administration, gave the banks the permission to do the things that led to the 2008 financial collapse. Under President Bush, later, the government condoned these activities and eventually bailed out banks under TARP (the Troubled Asset Relief Program), dealing with the worst financial crisis since the Great Depression of the '30s.
GMC was also in a severe bind, but with government help it overcame and now is leading the big three USA auto producers. (There had been a precedent for this bailout with the 1970s Chrysler failure with Lee Iacoco as CEO.)
Yes, Mr. Bauer's description of the present economy is in part valid: It is not back to 3 percent or more; however, the unemployment rate is the lowest since the end of World War II, and so-called "food stamp" sign-ups are the lowest in three years. As far as the increase of the debt is concerned, much of that is due to the wars begun under the Bush administration, and now the fight against ISIS. Unlike Mr. Bauer and many GOP enthusiasts, our Medicaid and "food stamp" programs are not the cause of our debt. Those have been "red herrings" for years and will continue to be.
John W. "Doc" Crawford
Hot Springs
Editorial on 01/15/2017