"My administration will be absolutely committed to the future of America's middle-class and working families," Obama said Sunday.

It better be.

more whistling in the dark. i'm reminded by all this talk of a joke from the Cold War years:

in the event of nuclear attack, children, go immediately to your desks, put your heads between your legs, push them down further and around a little bit, and kiss your little asses goodbye.

"...Any Democrat or Republican that tries to put a stick in the spokes of this wheel is going to have problems in the next election,"

Yeah, like they really had problems over their failed promises from 2006! I notice we are still in two, official, illegal wars, spending and printing money like its going out of style on the _WRONG_ people... I also notice that the same crooks that run the government are still there after one of the most important elections of our lifetime. Yeah, I'm sure the Dems and Reps are really scared of consequences of putting a stick in the spokes. Especially when they know that the people will forget about their double dipping and dealing in about a few weeks, which will be well after the mainstream media ceases to report on it. I expect to see campaign speeches that end with "*cough*suckers!*cough*".

Throwing money to stimulate the current consumer economy will not work this time. We are faced with the reality that 70% of the 137 million people who work in this country are tied to the consumer economy--that's 96 million people. With global warming, resource depletion, etc., we know we can't keep this level of consumption ---so whether we spend a billion or 10 trillion when Obama comes in--if its to fuel this old economy, it won't work.

We need to start now to transition into a Full Spectrum economy--a 6 sector economy that measures and values/monetizes the current 3 sectors--markets, government and illegal (drugs, prostitution, etc.) and add the household, unpaid volunteer and natural sectors. This expanded view would enable a vibrant economy that recognizes the realities of the 21st century world we're going to need to live in.

The reality that unbridled free markets is one of the primary reasons for the devastation of our economy does not matter to greed-merchants like Obama. He chose a whole economic team, literally to a person,of deregulators and free-traders to manage his economy. Like Madoff and the rest, these thieves, including Obama, are out to enrich themselves and will simply talk about how long it will take for the economy to right itself. They're like the Savings and Loaners of the 80s and the rest of the Rubinomics/Reaganomics/voodoo economics thieves, enriching themselves using policies that transfer the greatest amount of wealth from the poor and middle class to the wealthy in the history of the US.

And the media will play their role, blabbering on-and-on, making it appear impossible to resolve, picking out individual villains and condemning any resolution coming from social democracies while more of the middle class and poor in the US fall further and further into economic hell as Obama claims he can't afford universal health care and adequate retirement benefits.

bakunin2 Obama is part of the establishment that has gotten us into the mess we're in now. He has received much of his campaign money from the people who have brought us into the present crisis. He will be offering only programs that are bandaids to the deep systemic problems that are hobbling our economy and society. We need nothing less than a huge uprising from the American middle classes and poor to take power away from the corrupt politicians and corporate CEO's who have brought the country to its knees. But unfortunately the middle classes are not prepared to make the personal sacrifices that a mass movement would require nor do most in the middle class and poor class have the awareness to understand what has brought them to their present situation. The corrupt elites in this country have succeeded all too well in disempowering the majority by a sort of non-surgical mass lobotomy via a government and corporate propaganda onslaught, eliminating the critical, skeptical abilities of most Americans and therefore giving themselves carte-blanche to do as they please. Don't expect any elected officials in Washington to be a help except independent Bernie Sanders and Dennis Kucinich. They and a few others are the only "representatives" who dare to speak the truth about what is going on in this country. But when they speak the truth it doesn't get reported in the mainstream media, so the masses remain confused and uninformed. The big test will be health care reform. The only reform that makes economic sense is to have a single payer system for the majority of Americans. That would reduce costs and extend universal coverage. But Senator Kennedy, Daschle, and Obama will not offer single payer coverage. They will offer insufficient coverage with high deductibles extended through private insurers as in Massachusetts. This will only make the middle classes poorer and won't offer any significant health care security.

I don't really understand economics and I don't have a quick fix to save the economy. But I'm willing to trust Obama and I'm willing to trust that he is surrounded experts who know how to handle this better than any of us. Anyone here with a P.H.D in economics? Didn't think so.

Also consider this, Bush and Obama could not be more dissimilar to each other. They are polar opposites. Bush serves the interests of "his base" which are the economic elites. Obama serves his base which is the middle class. If they both agree we need a bailout, I think we should listen.

How do you prevent a boom and bust economy? Ask the Swiss who have never had one.

A free market? This is a society that enslaves the poor and the middle class into debt slaves with 600% pay day loans. The sponsors of such loans have billions of dollars to lobby congress to allow this practice. So much for all of the banks being broke I suppose.
The only reason congress and the President want to bail out the banks and others is because of the huge contributions they make to the campaigns.
The ceos of the companies say the executives and administrators deserve bonuses and high salaries because they will leave and seek employment elsewhere? Exactly who and where are they hiring non-producers and sleepers who cannot make the company money.
Yet when the union workers want a decant salary and benefits this is called entitlement.
Where is the difference? One produces paper lies and the other produces cars the consumer cannot afford to buy.
Even toyotas sales are plummeting and they do not pay as high costs for labor.
Another lame argument by big business and lazy government who cannot make money and must borrow from overseas and want the poor and middle class to pick up the tab.

"We're going to take to the streets if Republicans will try to block this," Gerard told reporters.

This UAW statement will be tested... they better be ready. Rebublicans want to test how much damage they have done to UNION's over the past 50 years. Unions are not working now , they might as well go on strike to build up their base again.

I personally think , messing with UNIONS will be a big mistake by the Rebublicans.

toophat for you!

Hey realwealth,

Are you telling me that out of 300 million people in the U.S., only 137 million are employed and contribute to the econ? Wouldn't that really be effectively 60% real unemployment then? (not just 6%; those still picking up unemployment that the gov Unemployment number includes.)

Please tell me this is wrong......

If true, I don't think the foggy bottom will appear in the market until after 2009.....

We're screwed.

"Brother can you spare a dollar?"

joehope:
I'd bet you that there are Economics PHD's reading this thread.Having said that-it's Friedmanite PHD's that were most responible for the slide into our bleak situation now.
I have one year of required college level econ.,and 40 years later I vividly remember what B.S. it was.The first class the prof was glibly talking about "utils".So sexy! Utils were the jargonistic expression for usefulness.The remainder of the the 2 required semesters weren't much better.And this was at the moderately progressive UofWisconsin.Imagine the boatloads of self-serving B'S' at the influential UofChicago.

"The bailout hasn't succeeded. The problem is the diagnosis of it as a 'financial crisis'. It is a toxic stew of subprime mortgages that is the problem, and its consequences are to poison the well of finance. Pouring capital into the banks doesn't fix it," Jamie Galbraith, an economist at the University of Texas, told reporters recently"

****************

Baloney. This is only partially correct and a negligently incomplete analysis. The "well of finance" was not poisoned by just subprime mortgages. The "well of finance" was poisoned by subprime mortgages which originators sold in bundles to banks, which banks then repackaged these risky bundles of loans into falsely valued securities (because the value was based on all the borrowers being able to afford to pay the exploded ballooned rate that would occur in three years from origination) which were then marketed by the brokerage sub-divisions of these banks.

For about three years it worked and we had a "housing bubble". Then (predictably) the time for adjusting the loans interest rates upward came and the borrowers could not afford to pay the increased monthly payments. When the borrowers started defaultig on the loans the securities based on those loans had nowhere near enough income to justify their value and started to collapse.

This whole mess will continue throughout the entire term of Barack Obama as every quarter a whole new pile of these subprime loans come due for upward adjustment. Default will lead to further security decline in value and the stock market (along with the economy) will continue to contract.

This entire mess was facilitated by the revocation of the Glass-Steagal act by the Gramm-Leach-Blilley Act and the "Financial Services Modernization Act" passed by the Republican dominated Congress and eagerly signed and endorsed by the Clinton Adminsistration (otherwise known as Bush-Lite.) The revocation of these legislative abominations and the reenactment of Glass-Steagal ought to be in the first 100 days agenda of the Obama administration.

Poet

Instead of trying fix the country, macro, by giving a trillion dollars to politicians to squander, Obama should take each individual county in each state and assess what each needs, micro, to be jump-started economically. With a mandate that all monies allocated only create jobs in each county to whom they are given, an orchestrated wave of stimulus would sweep across America, with a mandate that these jobs be Green, we would be moving even further forward.

How, exactly, each county spent it's monies would be determined by the people in town hall and community meetings within 90 days.

The 'rush' to give a trillion away sounds precipitous, our crisis could wait a few months rather than a few days after Obama takes office to be addressed by the people as well as the new president.

My name is Philip Copeman and I am writing from Cape Town South Africa. You can find more of my small business blogs at www.turbocash.net

I love the Spirit of Common dreams and wait everyday for the newsletters to arrive. The liberal principles expounded by the American left have dominated my thinking for the last 30 years. It can sound unfair and heartless for me to be commenting from outside the US, but as the fate of the US economy has such a large effect on the rest of the world economy, our destinies are entwined.

I grew up as a white South African in the Apartheid period. We did not understand it as children, but we were given economic privilege in spades. Better security, better education and better health care. By the time that we understood this, it was the most difficult thing to unwind. Even the liberals amongst us, came up with the most convoluted arguments to sustain our position. Logic and rationality will not help to persuade people to give up privilege.

137 Million Tax payers out of 300M Americans? The situation is much worse than than that. When you look at the numbers - around 20M pay 80% of the US tax. The bottom 50% or around 150 Million people, not only don't contribute little to the economy, they TAKE from the economy. Even the humblest American living in a trailer park, expects the state to give personal security and health care. It is a bitter pill to swallow, that for most Americans, being there is simply a burden to the state. This is one of the reasons that you have the toughest immigration laws in the world. Just get into America and the system will pay for you to stay on.

This tax skewness is also prevalent in Africa, but the difference here is that if you don't pay tax in Africa, you live in a shack, have no electricity, little education, find criminals run your district and absolutely no chance of finding a decent doctor and you have a life expectancy under 60. Like us Whites in Apartheid times, in America 150M have grown up used to the fact that they can use more than they make. The majority contribute little to the tax system, but still demand free education, security and health care, at a level not seen anywhere else in the world. They vote a landslide to the party that promises this to them. We talk about America as the land of freedom and opportunity, in reality you live in the worlds largest welfare state.

This welfare state is financed by two numbers, the Federal Deficit, now approaching a Trillion Dollars annually, and the balance of trade which is over $600M against the US. This deficit is so large that is now takes up over two thirds of the total worlds savings to keep irt in balance. This all means that not only are the top 20M American tax payers funding your lifestyle, so are the rest of the worlds savers. Thats right, the rest of the world pays for your privileged lifestyle! What you have heard from them over the last few months is that they don't want to do it anymore.

Now scream and shout about mismanagement, stick a cracker under your Presidents ass, make your Treasury borrow from your children, get your Fed to debase your currency, but you cannot get away from the fact that as a Nation you consume more than you produce. Fix this and you only then can you fix the economic problem.

I doubt that this dose of reality will make much sense to most of the 150M Americans living on these borrowings, it didn't make sense to us white South Africans, living off Apartheid.

philipdc:

you may not believe this but it makes perfect sense to me - always has! In fact, it makes perfect sense to poverty-stricken citizens on the Rez, Inner Urban Areas, Slums or on small family farms, where struggling to survive is an everyday occurrence.

BTW: Obama isn't going to change anything, he's not Moses or Jesus so there'll be no rescue because he's in the grip of his paymasters, and where they'll take this is as far asunder as long as they can screw the pooch on this embroglio.

Nobody says that we might be running out of resources. The ability to pillage is not as easy.

Obama has a mountain to move. He definitely has the support, but he has the mountain of ignorance brought on by the Reagan years and the support of the GOP who believe their only way to stay in power is to have masses of people that are dumb as sheep. Their hate media network especially in the South East has served their cause well, that is until they found they stole everything in the cupboard.
Obama must dump in 2 trillion and re regulate the energy, banking and media industries.
He must move to fund Solar Energy, and Alternative Power sources. The Fossil Fuel Consortium, Exxon's Chevron's and alike are still in power. Once we have a clear and defined path to energy independence and regulate the Criminals in the banking and energy industries, American will have a chance. It will never be the same after the Criminal Bush Regime and their Plundering of our Country and Constitution.

When the big banks swallowed the small town banks we were told it would be better
for us. They lent money to Mexico and lost it. They stole the rest of the money
by their greedy commissions and fees. We should bankrupt all the banks that are
in trouble and start all over again with local owned banks with enough collateral
from the Federal government. Obama must remove himself from the Ivy League
politicians that are involved in the Wars and the stealing of our banking system.
Most of us elders lived through the depression and know that the WPA and the CCC
did not solve the depression. It was when the Japs invaded Pearl Harbor and
FDR mobilized our industry to produce tanks, bazookas, rifles, artillery pieces,
trucks for combat, destroyers, landing crafts, even gliders. Obama is simply
to young and inexperienced in this past story to understand the seriousness of
what Bill Clinton and the Bush family have brought unto us. The sellout of our
industrial base to China VIA Walmart has destroyed this country.
Who will tell us? Who will come to our rescue? The Ivy League be damned. Man
the torpedoes. Let's get rid of Globalization, the Chinese and the Japs are still
not involved in forcing deomocracy all over the Globe. Our interests should be
in the salvation of our country, and forget all the phony attempts at democracy
in the oil producing countries. The Clintons have become Multi-Millionaires
as a result of the sell-out of our country. Will we wake up in tme?

""We are experiencing a fundamental collapse of the basic mechanisms of trust and exchange at the heart of the credit system," Galbraith said."

To revive the credit system is fairly simple, but economically painful. Require all financial institutions to "mark to market" all of the toxic paper. Of course, this will set off a huge number of large firms to go bankrupt; but is not this what capitalism and the invisible hand require.

All the leveraged unregulated derivatives will become to nothing. But, the ones who made this financial mess should be required to pay for the clean up, too. The tax payer should not clean up the mess of the financial system ruling elite.

But, we are suckers who voted to retain the same people who are instrumental in making this mess.

Here is a plan to save the US economy: each person in the US old enough to enter into a legal contract will go outside and pick up a rock, any rock. Then each will go to a neighbor who has also picked up a rock and they will enter into contracts to sell each other these rocks at a set price of one million dollars per rock. The money will be as a loan with an interest rate which will not start to accumulate for the first year and then will be allowed to roll over until 2030. Minimum payment on the loans will be one dollar per year until 2020 when they will ajust upwards. Then, all of these contracts will be bundled into securities and sold to people all over the world. People in other countries will happily buy all these securities (after doing due diligence) because the US is the richest country in the world and these investments must therefore be safe. With all of the money from all over the world the people in the US will then buy products from all over the world. People in the US will be happy. People all over the world will be happy. Happy days are here again the sky is bright and clear again. Let's sing a song of cheer again. Happy days are here again.

I'm going to enjoy watching the capitalist monster drown. It will hurt but I have hated it since the day I understood it.

As others noted, you can't save the economy by borrowing more money. This is not 1932, where they went into the depression with very high corporate taxes and high taxes on the wealthy. In case folks haven't noticed, we have been deficiting spending our way to an $11 trillion debt (which is about $35,000 each of us owes. To continue to deficit spend in hope of a different outcome is insane.
The root cause of the mess is our greed and addiction to consumerism. This consumerism has created inflation that has been masked as wealth. It also has created enormous rape of the earth and waste of its resources.
No-- no bailout for the corporations. Let them fail. It is the only way the economy will readjust.
Yes, that means the middle class will feel pain. Well, maybe they will finally stop their greed and exploitation of the earth and the non-white people in other countries. And maybe they will finally demand that the truly wealthy pay their fair share of the taxes and pay their full share of the destruction of the environment. The middle-class has done well and has contributed to this problem. Why should they be bailed out? Why are they the focus of Obama's compassion.
The government should not protect and prop up the status quo. The economy is not a thing, not a system--it is not even real. It is a belief system and the beliefs that support it are in error.
Time to let it collapse and build a new economy based on different beliefs--that how we spend our money is connected to the earth and the quality of life the living earth.
We need a new phisophy that values sustainability and the good of all over the wealth of a few. We need to stop worshipping wealth as the greater good.
Keynes and Marx cannot help us now. They are ossified ideologies. We need to move to something new that will help us transform our planet so we can all survive--and where we can experience a higher quality of life based on relationships rather than on all our stuff. We have to stop this reverance of wealth.
Let it collapse. It is the only thing we can do that makes sense.
Our efforts should be focused on the redesign of a new system that will work for all.
Whether Obama understands this remains to be seen. I am hoping he will surprise me but I wouldn't make any bets.
Spending trillions--is he going to cut defense?
Does he have any sense about how long it takes to gear up? Does he know how likely the money will just disappear into someone's off shore account, like the money for the financial bailout did? Do we ever learn?

oldcreditiste says: Much has been said and written about the Economic downturn, use what euphemism you prefer, and some about the measures to cure it, but nothing about the fundamental point on which the ECONOMY turns. The MONEY SUPPLY is the FINAL COMMON PATHWAY which controls the economy. Nobody says anything about it.
In the 1930's it went down and stayed down, until the war. Rising money supply will lead to inflation, all else being equal, and falling money supply will lead to depression, all else being equal.
Banks [and borrowers] create money out of thin air but need an amalgam of faith, hope, and greed to do so. The government,if it has the will, can create money. They print it on metal or on paper as every one knows. The credit money that the banks create is much the largest part of the money supply, over 95% in Canada. Virtually 100% in the United States. ["The method by which the Banks create money is so simple that the mind is repelled' J.K.Galbraith]
The money supply can be increased by the Banks by making loans. If they cannot or do not the Government can increase the money supply by spending the money into circulation or by giving it to people. The banks may not be able to make the money circulate but any fool with half an eye can see that the people, and especially the poor, will spend the money that they can get their hands on.
If the money supply is to be increased to 'fight the recession' is it better to give it to the banks or give it to the people. The banks may be hoarding money but the poor and the middle class will not do this.

Does anybody see what I am driving at?