Some Context on Stagnating Wages

If you watch the Democratic Convention for more than five seconds, you are bound to hear a speaker attack George Bush's economic policies as resulting in "stagnating wages". Is this really a fair criticism? Investor's Business Daily blows the lid on that misleading and unfair charge.

As this chart clearly shows income has been rising for most of Bush's term. In fact, claiming that wages have fallen through his term is now a lie. Furthermore, claiming that wages have stagnated doesn't put some very important history into context.

What happened was that income fell dramatically in Bush's first two years in office. What happened to cause this dramatic drop. In fact, Bush entered office to one of the most dire set of economic circumstances EVER. From March of 2000 through December 2000, the internet bubble's burst caused 3 trillion dollars in paper losses in the stock market. Within nine months of taking office, we had 9/11. Nearly one million jobs were lost in the three months immediately following. Furthermore, within months of 9/11, Enron started a domino effect of companies having to admit that they doctored their books all throughout the nineties.

What this means is two things. First, it is a miracle that income figures aren't worse. Second of all, income figures were inflated throughout the nineties by a speculative internet market and major companies cooking their books. Yet, not only will Democrats take credit for the fairy tale of the '90's but they will use that fairy tale to blunt Bush's performance in this decade.

The ironic reality is that the only reason our economy didn't go into a deep depression as a result of the perfect storm of economic trouble handed to Bush is the well timed tax cuts he orchestrated. In fact, the tax cuts worked so well that the public has lost sight of just how dire things are. As such, the ridiculous charge that it is somehow Bush's economic policies, and not economic reality, that caused so called stagnating wages gains legs. Democrats pretend that it was their policies and not a speculative market and outright fraud that caused most of th prosperity in the '90's. Then, they turn around and use that fraud to blunt Bush's economic policies.

It's as though they expected income to continue to rise even though paper thin companies were no longer making folks millions left and right. Furthermore, without the benefit of fraud from Enron et al, income was still supposed to rise. Not only did all of these activities make millions of folks millions of dollars but they furthermore lost all of these folks millions more right as Bush was taking office. Is it any wonder that income was stagnating?

Of course, taking away 2001-2002, the two years the economy needed to recover from the excess, income has risen just as steadily as it did in the nineties. Now, granted much of this rise occurred because of an equally speculative real estate market. Yet, that is not the argument they make. Democrats won't even recognize the outstanding growth the economy had. They dismiss it. They have to because acknowledging also leads to the acknowledgement that the lionized policies of Bill Clinton were nothing more than a mirage as well.