In June, a poll conducted by the largest social network for African Americans, BlackPlanet.com, and NewsOne.com of 1,100 African Americans, revealed that 88 percent of them believe the economy has been better under President Obama than former President George W. Bush. The truth of the matter is that both Bush and Obama have basically, through their expansionary economic policy, destroyed the black middle class.
Since 2005, the wealth of African Americans — who now have the highest unemployment rate at 16.2 percent — dropped 53 percent from $12,124 to $5,677. The median wealth of white U.S. households in 2009 was $113,149, compared with $6,325 for Hispanics and $5,677 for blacks, according to the analysis released Tuesday by the Pew Research Center.
When President Bush took office, unemployment stood at a respectable 4.6 percent. Next, Bush put in place a tax policy that favored the rich and created a national debt that will probably have grown 70 percent by the time the current president leaves Washington. Now we have a swelling cascade of mortgage defaults; a record near-$850 billion trade deficit; oil prices that are higher than they have ever been; and a dollar so weak that for an American to buy a cup of coffee in London or Paris — or even the Yukon — becomes a venture in high finance.
Despite their political differences, both President Bush and Barack Obama have employed the same fiscal policy, since both were confronted with recessions. But unfortunately, their expansionary economic approach did more harm and impacted African Americans disproportionately. First, it increased the federal debt. Obama’s fiscal year 2012 budget proposed a $1.07 trillion deficit, even though the recession was over and first budget in fiscal year 2010 ran the highest deficit ever — $1.6 trillion. Prior to Obama, Bush’s last budget, for fiscal year 2009, started out with a $500 billion deficit. However, Treasury Secretary Hank Paulson’s TARP plan was added to it, not to mention the $500 billion deficit to fund the war on terror.
During the administration of George W. Bush, the U.S. economy started a downward trend. Consequently, those hurt the most were blacks, since the average black household lost over half its wealth between 2005 and 2009. Black homeownership hit an all-time high in 2004, with 50 percent of African Americans owning their homes, according to census data. Presently, the black homeownership rate is 45 percent, with around 8 percent of African Americans who bought homes from 2005-2008 losing them to foreclosure, compared with 4.5 percent of whites, according to an estimate by the Center for Responsible Lending.
For millions of African Americans, under Bush and Obama, the reality is that unemployment is still rising and job loss is pushing many back into poverty at historic levels.
In 2004, the median net worth of white households was $134,280, compared with $13,450 for black households, according to an analysis of Federal Reserve data by the Economic Policy Institute. By 2009, the median net worth for white households had fallen 24 percent to $97,860; the median black net worth had fallen 83 percent to $2,170.
Yes, many will point to Obama inheriting the Bush economic mess as a reason to defend the current president. But the truth is that he, in concert with Bush, contributed to the growing black unemployment rate and the reduction of the black middle class.