George W. Bush has been an exceptional leader. Setting aside the foreign policy legacy, no president in the last sixty years has left a comparable economic record. He'll be the first leader in the last 60 years to leave the stock market lower than when he took over on January 19, 2001 -- the S&P is down 28% since then. Bush's closest competitor is Richard Nixon, whose stock market still managed to eke out a 0.6% annual gain.
And the fiscal situation is equally remarkable. The budget deficit will hit a new record, possibly as high as $1 trillion in 2009. The national debt will be $11.3 trillion, up 126%. The dollar would be about 48% weaker based on today's exchange rate -- it was 92 cents to the Euro when he took over. And based on today's price, oil would be triple the $24 it was when he took office (one piece of good news is that this is half of its July peak of $147 a barrel). No other president can match his record.
But these statistics don't tell the story of what kind of holiday Americans will experience after we choose Bush's successor. Thanks to the financial crisis, people will spend less on family gifts and they'll struggle to heat their homes while still feeding their families and taking their medicines. How so? Nielsen reports that 35% of U.S. consumers expect to spend less this holiday season than they did last year, 6% expect to spend more, while 50% of consumers expect to spend the same amount as last year.
Gas cards will be big holiday gift items -- 12% of consumers expect to spend more in convenience stores, likely related to a rise in pre-paid gas cards as gifts this holiday season. Shoppers will flock to grocery stores, super-centers and mass retailers and most of these will offer deals to attract their business. But department stores and electronic retailers will have a more difficult time -- 28% of consumers expect to spend less in these stores this year.
Fuel costs are up and many families in cold regions are going to have to choose between keeping warm and other necessities like eating and medicine. In Maine, for example, home heating oil is at $3.62 a gallon this week compared to $2.70 in October 2007. Filling a standard, 275-gallon heating oil tank last October cost $745. Filling it this week will cost 34% more, or $995.
The recession diet is in full effect. People are cutting back on going to restaurants and avoiding vacations that involve air travel. People can save money in many different ways -- cutting up their credit cards (which charge double digit interest rates), car pooling, taking public transportation, canceling vacations, buying clothes at thrift shops, and buying more pasta and less meat and fresh vegetables.
A sign of the times -- pawn shops, which charge 20% a month interest rates, are booming -- some growing profits at 39%.
Does Bush care? I don't know. But he sure thinks we're lucky that he's in charge.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.
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Reader Comments (Page 1 of 1)
10-15-2008 @ 3:13PM
ww551 said...
worst president ever and he made history first retarded guy to become president
10-15-2008 @ 5:20PM
Kent said...
I'm afraid both George H.W. Bush and George W. Bush are not economists and financial leaders. Both suffered recessions in their administrations. We are paying for it now, literally.
10-15-2008 @ 6:20PM
william lindblad said...
You forgot Herbert Hoover.
James Buchanan is still in last place and If George Pickett (Pickett's charge) had pulled the trigger when he was Captain Pickett the whole world would be different. Amazing, but true as Pickett was a Union Captain and in this capacity, could have won the Civil War - for the South.
I don't know why you keep blaming Bushy when Barney Franks & co. was supposed to be watching the store?
When the hell are these yardbirds going to call up the head of OFHEO? Bet they don't. Bet he has too much on them. If yo want to be critical, let's get them all. Bushy got in there on a line of B.S. and Obama is going the same route. Lot's of idealistic ideas but where is the loot to come from - China? No chance they are getting tired and only intervening to save their own hides.
10-15-2008 @ 6:45PM
Bruce B. said...
Did Congress, the House or Senate not have something to do with this mess. Look at these idiots, do we really think that only the President is to blame. Learn how the Government actually works before making stupid comments.
10-15-2008 @ 8:02PM
luke said...
Peter,
Are you writing a business article or are you moonlighting for Obama and Acorn? You and the biased media types are the problem with the country. No wonder people can't make informed decisions. Thanks for your objective commentary and also for your other article on doomsday-October 21st. If you want to campaign for someone go hand out some flyers and attend some rallies. Everyone knows Bush is the worst president we have had in living memory and we don't need a business blogger to tell us that. You are so subtle in your bias that it make me ponder who has the lower IQ, you or W.
10-15-2008 @ 11:37PM
Jesse said...
HAHA!!! I think America is getting off on watching these scumbags in charge of our country **** up. We gave the administration more of our money to squander while we sit here are argue with each other when some people making negative comments about Bush ARE THE SAME A$$HOLES THAT VOTED FOR HIM TWICE!!! If you have voted for Bush you're either dilusional, retarded or religious. The first two are stemmed from having religion beat into your hollow minds. Maybe you were just easily manipulated due to your close-mindedness. Either way, you people are responsible for this travesty in our freshly soiled history. This large dump that Bush and his cronies have been taking on us for sooooo sooooo long will finally end soon. Let's not make the same mistake THREE TIMES! And believe me when I say that the 3rd time won't be so charmful.
10-16-2008 @ 1:22AM
Paul A said...
PEOPLE!!! We elected a man twice who did not know social security was a federally funded program when he was campaigning in 1999. All you uneducated morons who voted for him deserve every last thing you are getting down to your foreclosed homes and higher gas prices. I have no sympathy for you and never will. You are just as much to blame for this fiasco as anyone.
10-16-2008 @ 1:26AM
edneedstoknow said...
Well, he certainly set a new standard. He didn't get my vote either time, but I haven't been on the winning end since Nixon, and he did what he promised and got us out of Vietnam.
The invasion of Iraq ruined our world image, is putting us deeply into debt, and was started when the reps were in control. I'm no fan of congress, but they were lied to about wmds, and our so called intelligence. The presidential appointments have proved to be a disaster on all fronts. I suspect he was warned about the bank issues long ago, but finally asked enough people that he found one to tell him it would all be ok. Historians will have a great time determining his place in history. The rest of us get to live it.