It's hard to know how to say farewell to an administration as awful as George Bush's. Do you boo its members as they leave Washington? Do you cheer their exit and do a little dance of glee that they won't be around to spin gold into excrement anymore? Or do you sit down and quietly try to work out the scale of the damage they left in their wake?

I guess I will be doing a little of all three. And as a journalist, I'll also be slightly rueful. After all, for someone interested in social justice issues, there was never a shortage of topics to write about these past several years.

Chief among Bush's peculiarly twisted domestic legacy is an unprecedented collapse in the earning power of ordinary Americans – not just the poorest of the poor but huge swathes of the country's working and even middle classes.

After 9/11, the economy contracted for a year. And after the housing collapse, which ruined the economic stability of millions of households, the economy began shrinking again. At first the shrinkage was slow – slow enough that there was considerable debate for the better part of a year as to whether the country was actually in a recession or not. Then the shrinkage assumed a galloping pace once Wall Street collapsed this past summer and autumn.

In the last months of Bush's presidency the economy contracted by a magnitude not seen since the Great Depression. Many economists are now predicting at least 9% unemployment by the end of 2009, with additional millions not included in the unemployment data because they have given up looking for jobs. With the decline in tax revenues and the government bail-out of Wall Street and Main Street, President-elect Barack Obama acknowledged that the federal deficit will balloon to over $1tn this year as fallout from the Bush years. That's an unfathomable level of borrowing, and one that could exceed – as a percentage of the GDP (7%) – the debt carried by the US government during the second world war.

But even during the brief boom years sandwiched in between the two recessions, real median income in America declined even as productivity and company profits soared until last year's financial collapse. That has never happened for as long as income has been tracked by the government.

In addition to decreasing wages, health benefits and pension guarantees were slashed for many workers.

In small towns like Longview, Washington, thousands of people who thought they had pensions coming their way lost their pensions and health insurance when companies declared bankruptcy. They did so largely with the support of the administration in Washington, which encouraged companies – from Bethlehem Steel to major airlines like Delta and United – to restructure through declaring bankruptcy and then shedding their pension and healthcare obligations.

Although the Pension Benefits Guarantee Corporation partially covered the lost pensions, the healthcare guarantees went the way of the dodo. In town after town, old men and women returned to work, usually in low-paying jobs, just so they could cobble together money for their medicines.

Partly this has to do with globalising trends that would have hit certain sectors of the economy hard no matter who was in charge. The newly deregulated, interconnected world is increasingly modelled as a winner-take-all game. America's steel industry, for example, would have probably been in trouble no matter who was in the White House. The same goes for the inefficient car manufacturers, with their ill-thought-out business models and vast pension and healthcare bills.

But these trends have been magnified by deliberate policy choices. Such choices include Bush's anti-union policies. Thousands of workers have been fired under his watch for trying to organise, even though such dismissals are, in theory, illegal. Bush refused to countenance a minimum wage increase for the first six years of his presidency. He opposed workplace regulation, and his administration lauded mega-companies like Wal-Mart that were spectacularly successful in large part because they kept their employees' wages and benefits scandalously low.

By contrast, wealthy Americans did extraordinarily well under Bush until the financial implosion. The tax cuts he pushed through handed vast sums of money to the very wealthiest people on earth. The campaign to end the estate tax would have solidified a hereditary moneyed class in much the same way the legal structures protected the old aristocracies of Europe in centuries past. And as many commentators have noticed, so much money flowed up to the very richest Americans that the country attained a level of inequality not experienced since the giddy 1920s.

Bush knew well whom his policies benefited. In fact, at a gathering of the rich and famous, he joked – with a startling demonstration of tin-ear rhetoric – that these people were "my base".

What can you say about a president who stands by while millions of people see their livelihoods destroyed and their old age security shredded, yet abases himself in front of the most affluent and privileged of citizens? Dubya's presidency was more than a blot on American history. It was an ugly, vicious chapter. More than Harding, with his crony politics and his corruption; more than Hoover, with his incompetent response to economic crisis; and more than Nixon, with his cavalier disregard for the rule of law, Bush damaged America's social fabric.

An epitaph for Bush's years in office? He took what worked and broke it. He took what didn't work and made it worse.