‘Where are the jobs?’
To the Editor:
I would like to answer Sharon Owens’ question in West Newsmagazine on Aug. 29, (“The Bush tax cuts (for the job makers) have been in effect for 10 years, and I would like to know, ‘Where are the jobs?’”)
The Bush tax cuts created 6 million to 9 million jobs between June 2001 and January 2008, depending on which set of figures are used. I assume you know there was a housing bubble that burst in 2007/2008, causing, in Obama’s words, “the worst financial crisis since the Great Depression.” Although Mr. Obama likes to say he inherited the crisis from Bush, the facts tell a different story.
The Community Reinvestment Act of 1977, during the Carter administration, urged lenders to make loans in low- and moderate-income neighborhoods to eliminate redlining. This was the beginning of the government push to put more and more people in home ownership.
Then Clinton launched the National Partners in Home Ownership in 1994 to get 70 percent of the population to own homes by 2000. The government pushed lenders to make riskier and riskier loans to people who could barely afford them.
Many loans were made to people who could barely afford them, and many loans were made without the lenders asking for financial information about their ability to pay or even if they had a job. Because they were making huge profits and bonuses, the lenders kept making more and more very bad loans.
Fannie Mae and Freddie Mac, also making huge profits and bonuses, bought up most of those loans and packaged them for sale to Wall Street investors. These investors believed the bundled mortgages they bought were safe investments based on erroneous ratings put out by the rating agencies. Then, the homebuyers who shouldn’t have been homeowners began defaulting on their loans in the hundreds of thousands, and the house of cards collapsed, resulting in the aforementioned financial collapse and the loss of billions of dollars and millions of jobs.
So, you see the loss of jobs that you were wondering about was the result of the government pushing more and more low-income people into homes they couldn’t afford, not because the Bush tax cuts didn’t work.
The Bush tax cuts were working and would have continued to work except for the collapse of the housing market. I would recommend reading “Reckless Endangerment,” a book that explains in depth why we’re in the financial mess we’re in.