Maybe we'll be OK "if government does nearly everything right". Except the government is still made up of the two parties that did nearly everything wrong.

And the party that is responsible for most of the wrong doing is dedicated to the failure of its former appeaser party.

That should work out well.

better yet.....call it the great suppression.

Obama is to be commended for the many reversals of Bush policy he has undertaken during the first 50 days, however, in view of the enormity of the great collapse his actions to date can only be characterized as re-arranging the chairs on the deck of the Titanic.

Obama has made zero headway in dealing with the BIG ICEBERGS that need to be dealt with soon, or the ship known as America will sink to the bottom.

The biggest iceberg is the financial industry that remains just as out of control and unregulated today as it was when it caused the collapse. Effective re-regulation must include all of the New Deal regulations that were dumped during the past 30 years, plus regulation to deal with all of the new financial products that have been introduced since the New Deal. Of the trillions of private investment dollars now waiting to be invested, none will be invested until the financial sector is under control. It will take $5 of private investment for every $1 of government stimulus to stop the economic freefall now in progress. Obama's nebulous rumblings about "consolidating oversight" indicates that he is in denial that the need for re-regulation exists. Can you say "one term" Mr. Obama ???

The Healthcare industry is another big iceberg. The 2003 pharma extortion bill needs to be repealed, and private medical insurance needs to be phased out or American business (not just auto makers) will never again be competitive with foreign companies. Not only is the pharma problem off Obama's radar, big pharma is getting bigger everyday...Merck buying SP last week, Roche buying Genentech this week... They want to create companies that are too big to fail, thereby making them eligible for even more corporate welfare. Obama has also taken single-payer insurance off the table, thereby assuring that the medical insurance industry's license to steal will have no expiration date.

Jim Shea
Dave Dubya's comment contains more wisdom in fewer words than anything I've read in a long time.

I supported Obama and would like to continue to supporting him. But he is much too timid and needs to show some of the audacity he spoke about in his book. His financial advisors are the same people who helped us get into this mess. And his taking "single-payer health care off the table" means that the health-care mess will continue. The Bushies have put us into an incredibly deep hole, and only bold action can get us out.

>> if government does nearly everything right, and soon.

The first rule of holes - when you're in one, STOP DIGGING!

It's called the GREAT RECESSION and justifiably so. What worries me is that the 2nd phase of this unfolding disaster is a Hyper-Inflation. Food costs are still rising and fuel is also inching back northward as well. Medical costs of all varites are simply unhinged from any reality. Ins. costs and taxes are also going up. Obama's stimulus in the face of these 800 pound Gorillas is like a fart in a wind storm. Oh, and add one more 2,000 pound Gorilla that is still growing Defense and you have a near perfect storm. T
The BV$H crime syndicates goal was to return America to it's pre-middle class days ( pre-WW2) and it's safe to say he accomplished his task. America is indeed in a worse place then it was in 1932. Kuttner also forgot to mention the fact that in 1932 we still made and grew most of what we consumed in thie country and we also produced most of our own energy as well. Today, we import our fuel, food and much more. This is why no jobs are being created anymore. Hell,we even import a big chunk of our workforce.
America is rapidly declining because the 5% that own most of the countries resources cares nothing for the remaining 95%. America to these people is just another place.

Well, in place of a war, to relieve the depression, we can have it's equivalent - a massive industrial conversion to build a zero carbon electric power system, and very low carbon transportation infrastructure.

Fat chance. And our current war-machine-without-a-cause doesn't seem to be helping much either.

---USAn---

the problem we're facing isn't a dying economy, it's a dying planet due to our economy...

we must cease to be children leading children, and begin thinking and acting as adults...we must stop chemically altering the living planet to create product...we must reclaim responsibility for our own thoughts and actions, our own minds and bodies, our own education and security...provide our own water, food and shelter, dispose of our own waste...we must live small, in harmony with the planet and the myriad creatures...

marijuana, music, mating...conservation, cooperation, community...

"To cure the housing collapse, government should directly refinance mortgages, rather than bribing banks to ease terms."

Exactly.....and the government, not the Federal Reserve, should also assume the profits from the loans they refinance!

According to the (Privately-owned) Federal Reserve’s website, their duties fall into four general areas:

1. Conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates.
2. Supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers.
3. Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets.
4. Providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system.

As we can all see, they have FAILED at everything!

I read an article that suggested that people that bought houses they couldn't afford and there are many in the current foreclosure mess should be allowed to finish the foreclosure process.

That not too many Americans that can't afford a 700,000+ house need bailing out.

That perhaps allowing housing to find its proper value level will answer the need for affordable housing.

That rewarding bad behavior while punishing good behavior is not that good an idea.

This of oourse has some obvious flaws. There are some folks that were defrauded into sub-prime, some who are no fault because of medical bills, etc.

Another reason we are in worse shape is that this virtualization of the economy has infected our political and social culture. Image replaced substance for so long -- Obama only being the most successful charlatan in this past farcical electoral cycle.

To paraphrase Marx, "All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses, his real conditions of life, and his relations with his kind."

Unfortunately, we have to take our blinders off (or maybe, put our sunglasses on) to face this reality. Sadly, I think we will sooner see the barbarism from the populist right given the fact that our society is so atomized and that the media corporations have unleashed demons on the public with their hate radio and television to control us.

http://www.youtube.com/watch?v=tweMZR4IVDo

But today, thanks to "securitization" of loans and the ability of insiders to create exotic and unfathomable financial instruments, the speculative system makes buying stocks on margin look like child's play. In the aftermath of the crash of 2008, the process of sorting it all out and getting banks functioning again is something that markets simply cannot do.

We are not even clear who owns what. The wise guys on Wall Street invented a doomsday machine from which there is no market escape.

In 1929 when the stock market crashed, the banking system was relatively healthy. Bank customers played these speculative games and took the losses, not banks. This time, the banks drank their own Kool-aid.

Many, many thanks for this cogent, succinct explanation of what's happening now and will most likely happen in the near term. Warren Buffet said (and whether it's true or not is immaterial) that he never invested in these "unfathomable financial instruments" because he couldn't understand what they were. After shedding almost its entire manufacturing base, this was the inescapable conclusion to economic life in the United States - we have been reduced to a nation of snake oil salesmen, every single one like the characters in Glengarry Glenn Ross, peddling one bullshit scam after another until the system became so hollowed out we are now nothing but an extravaganza of fraud, cynicism and criminality. We have become the economic version of a Rube Goldberg contraption. We could recover from this and come out of it for the better. That, however, requires a degree of honesty and regard for the commonwealth that neither the Republicans, the Democrats nor the Masters of the Universe are capable of.

We'd better dust off our Whole Earth Catalogs.

Ya know. Our government getting dumb and dumber is getting to be beyond outrage. In any case, the collapse is just ongoing so we're now in the middle of the test on who will survive and who won't. I think the results will be stark clear by the end of this year if not earlier already.

At risk of drawing down noise about religion, there is a fully prophetic element to where the era of empire has brought us - the loss of the 'way' or Tao - and the concept of the common good.

I happened to read an interesting take on the parable of Christ in Gerasa (Mark 5). It is about the externalization and distortions of memetic violence and a variation on the 'scapegoat' - the externalization of what is wrong in society by criminalization, demonization rather than remediation.

Christ arrives in Gerasa and is approached by a man who lives between the living and the dead near the catacombs of Gerasa. He is considered mad, tears his fetters, harms himself with rocks, asking that Christ not torment him. He refers to himself as Legion ("because we are many") and plagued by an unclean multiple spirit. The unclean spirit is called out of him (named). The multiplicity of unclean spirits ask to be allowed to go into a herd of pigs - which it does - and pigs immediately charge over a cliff into the sea and drown.

The herdsmen for the pigs run into Gerasa and tell the city folk who come running to see whats up. Seeing the man no longer hounded by the multiplicity of unclean (whats a good modern day term?), clothed and in his right mind, they are terrified and tell Christ to leave.

"Legion" was kept near yet ostracized. He'd be useless if he were dead - hence between the living and the dead - a crazy making situation - but essential for Gerasene unity in their unwillingness for remediation. First thing they needed to do was stop their multiple unity in ostracizing the man (political demonization). Instead they asked love and wisdom (Christ) to take a hike. The man made the change himself through love and wisdom.

Similar to Lao Tzu legend of his writing the Tao te Ching before dropping out to go live with the 'barbarians' (as his fellows of the royal court had demonized the 'others' of the day). Both spoke in poetry/parables, describing dynamics and naming conditions rather demonizing - something we've had a belly full of - and perhaps one of our greatest challenges.

"Like in the present decade, the Federal Reserve helped to enable the game, with low interest rates and few rules."

We should know every detail of Federal Reserve activity, agreed. Sen. Bernie Sanders still needs a bill number in the Senate to audit the Fed and Rep. Ron Paul's bill to do almost the same is HR 1207 in the house.

If Americans are not stupid - then why do they keep voting for 'the lesser of two evils' - as if there were never anyone else on the ticket? Hell, in local elections, most candidates have NO opposition! Guess that means that most Americans are quite satisfied with their pile of shit - and willing to keep right on eating it. Just look at all the crazies on this site that blame Ralph Nader for the Bush coup - not that Al Gore would have been a better option! All of them could have voted for Nader - how could anyone be worse than a DFL or GOP candidate? That's impossible.

So enough of this bull about 'all the money' in campaigns - we don't need campaign-finance reform or term limits - that won't solve stupidity and ignorance or apathy. As long as offices are filled because no one else even bothers to run, there is NO HOPE. And therefore, no solutions to our predicament. You have to get politicians out of government - COMPLETELY - or there will never be any social progress. Only fascists - because apparently, that's what most people want. Grow up and face the truth - too many on CD are in denial.