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TechnoratiWhose Economic Recovery?
Has The US Economy Really Been Pulled Back From The Brink?
"When I spoke here last winter, this nation was facing the worst economic crisis since the Great Depression," he told Congress and the people at home. "We were losing an average of 700,000 jobs per month. Credit was frozen. And our financial system was on the verge of collapse."
"But," he went on, "thanks to the bold and decisive action we have taken since January, I can stand here with confidence and say that we have pulled this economy back from the brink."
Applause. Applause. Applause.
Are we back from the brink? And what brink is that? On Labor Day, HBO featured a powerful documentary about a GM Plant in Ohio that was shutting down. It showed the workers, teary eyed and forlorn, making the last truck on "their" assembly line. Their faces told the rest of the story as they asked themselves and each other, "What do I do now? What happens to my family and my life?"
They had no answers, and neither, alas, does Barack Obama.
A "jobless recovery" will not give these workers the money to buy into even the cheapest health care coverage, public option or not.
Look around Mr. Obama: the unemployment rate in real terms is over 16%. The consumer economy is shattered. The commercial real estate market is imploding, and, yes, more foreclosures are on the way according to the Washington Post:
A new report foresees another wave of foreclosures, as option adjustable-rate mortgages -- an entire class of specialized home loans -- will soon reset to higher payments. Estimated to jump by 63 percent on average, the higher rates will likely push many of the already-strained loan recipients over the brink. The loans, also called pick-a-pay loans, are a prime example of the risky lending techniques that created the housing crisis: Borrowers were allowed to pay back the loan with as little as they wanted each month, though that meant many paid less than the interest due...the report says the fallout from the loans could be felt for years, especially in states already hit hard by foreclosures.
Just who is back from the brink?
If you listen to the Fed, the glass is more than half full. If you listen to economists like Simon Johnson, it's way more than half empty, as he wrote on Baseline Scenario:
In the absence of effective financial regulation - i.e., both during the 1920s and again since 1990 - the Fed has operated in a manner that encourages the formation of sequential bubbles. This destabilization of our financial system is not a minor matter; the damage caused - human, financial, social - is already enormous.
And we are very far from being done.
Don't take my word for it. Lou Jiwei, the chairman of China's sovereign wealth fund said recently, "It will not be too bad this year. Both China and America are addressing bubbles by creating more bubbles and we're just taking advantage of that. So we can't lose."
Yes, We Can... Lose, that is, Mr. Lou. And Yes We Are, Mr. Obama. The problem is that we are still in some Bernanke fantasyland, thinking that if we keep saying everything is ok, it will be.
Here's Washington's blog on real unemployment as opposed to what the Bureau of Labor Statistics is saying:
... Paul Craig Roberts - former Assistant Secretary of the Treasury and former editor of the Wall Street Journal - and economist John Williams both said in December 2008 that - if the unemployment rate was calculated as it was during the Great Depression - the December 2008 unemployment figure would actually have been 17.5%.
Williams says that unemployment figures for July 2009 rose to 20.6% According to an article summarizing the projections of former International Monetary Fund Chief Economist and Harvard University Economics Professor Kenneth Rogoff and University of Maryland Economics Professor Carmen Reinhart,... unemployment could rise to 22% within the next 4 years or so.
Hello, Mr. President? Why can't you bring to the discussion of the economy the same passion and fact-based arguments that you brought to the health care debate?
Why can't you propose serious reforms on the financial sector? Why can't we jail the financial criminals?
The answer seems to be that Wall Street will be a far more tenacious and resourceful enemy than the health care industry perhaps because they already own much of the Congress.
Remember Senator Dick Durbin's comment, ‘the bankers run the place."
Alan Blinder a former vice-chairman of the Fed fears that pressure for financial reform is losing steam in part because of the power of what he calls "The Mother Of All Lobbies." He writes, "in the case of financial reform, the money at stake is mind-boggling and one financial industry after another will go to the mat to fight any provision that might hurt it."
Obama acknowledged we are not out of the woods yet. (What woods?) But what are the likely consequences? How long can people live without anything coming in? How long can we live on upbeat projections?
"There is no doubt class antagonism is stewing," says the editor of the blog Naked Captalism. He expressed a fear of a reaction that will go way beyond flag-waving tea parties:
... I am concerned this behavior is setting the stage for another sort of extra-legal measure: violence. I have been amazed at the vitriol directed at the banking classes. Suggestions for punishment have included the guillotine (frequent), hanging, pitchforks, even burning at the stake. Tar and feathering appears inadequate, and stoning hasn't yet surfaced as an idea. And mind you, my readership is educated, older, typically well-off (even if less so than three years ago). The fuse has to be shorter where the suffering is more acute.
One is reminded of the title of that movie, There Will Be Blood. Rather than show contrition or compassion for its own victims, Wall Street is hoping to jack up its salaries and bonuses to pre-2007 levels. The men at the top are oblivious to the pain they helped cause. They are getting away with the crime of our time.
And the people - The People - who potentially can challenge all this by action on the ground are being mesmerized by the false hope that recovery is here or right around the corner. How long before they realize you can't eat optimistic speeches?
22 Comments so far
Show AllIf they play in DC, don't buy their product.
And the next time someone tells you how all those lazy poOr are stealing from the rich, quote them this:
According to a new study, the average low-wage urban worker earning $339 a week is cheated out of $51 of that amount by an employer committing one or more workplace violations -- such as paying less than minimum wage, refusing overtime pay, requiring off-the-clock work or preventing workers' compensation claims. Whether damning proof of the government's inability to adequately enforce labor laws or evidence of a need for stronger standards, the report offers insight into the working lives of an often under-the-radar demographic.
The study, funded by the Joyce, Haynes, Ford and Russell Sage foundations, is based on interviews with 4,387 low-income workers --39% unauthorized immigrants, 31% authorized immigrants and 30% U.S.-born citizens -- in the first half of 2008.
NOW MULTIPLY $51 BY 50 OR 60 MILLION AND TELL ME AGAIN HOW THE "RICH" ARE NOT STEALING FROM THE POOR WHILE OUR CORPORATE GOVERNMENT DOESN'T DO JACK!
Absolutely. And the whipping boy for all this is -- drum roll -- public school teachers. You see Americans just aren't smart enough to fill the amazing jobs that none of us have heard the specifics about. So get cracking teachers and kids and invent some new "internets" to put a chicken in every pot!! And to those who can't cut the mustard, hey, it's a world of scarce resources so someone has to go without (and in the meantime can I buy your life insurance policy?) So, if you're an unemployed accountant, programmer, or engineer, or trades person, then hit the books, slackers. Oops forgot to mention, once you finish your course of study, please have five years experience and hope whatever you learned is still required.
"Mr. President, have pity on the working man." -- Randy Newman
With the people who have exhausted unemployement Checks,
and part time workers, we are close to 20% unemployed.
All this began with Bill {Bubba play-boy} Clinton who sold out our industrial base to China along with the double dealings
of former Sen Phil Gramm and Sen Dodd.
We the working classes have been sold out and doublecrossed
big time by our spineless money hungry politicians mentioned
above. The party of the working classes, is now in the hands
of Obama who doesn't seem to have a clue.
Forcing us to buy health insurance will not recover what we
have lost with the Chinese and Walmart Problem.
The Ivy-Leaguers, Bushees, Gore, Clinton, Obama, have served
notice that they are bought and sold and the country is
going down the drain. Who will tell the people?
Hello, Mr. President?
"**#!!!". Get off the phone, Rahm. I want to talk to the other president.
Hi President Obama, did you grow that lobster you had for dinner in your garden?
".......???"
Well, lobster from a garden has about as much to do with reality as banking and wall street claims of saving the economy have to do with health care.
".......!"
Oh, we get it all right, Mr. President.
Minor correction - Sen. Durbin said, "Frankly, they OWN the place." They hired BO and company to run it for them, which is why there will not be any 'reform' of the 'financial industry.'
If you were the owner of the place, would you hire managers who planned on 'reforming' you? Ha. And ha.
Meanwhile, DS adds to the daily count of pieces laying out the problem - again - without even the slightest hint of how 18 million jobs might be magically created ASAP - again...
Nobody, it seems, has an answer to that one...
Maybe progressives and other concerned citizens would better spend their time working on strategies to deal with the owners on Wall Street rather than with the hired help in Washington. We know that the twits in Washington are little more than ciphers, so why do we waste so much time focusing on them?
"Hello, Mr. President? Why can't you bring to the discussion of the economy the same passion and fact-based arguments that you brought to the health care debate?"
Danny, are trying to slide a premise by us? Or, are you simply lacking the ability to see that Obama is missing some serious facts in his "fact-based arguments" about the health care debate?
Isn't it obvious, Danny? Obama IS bringing the "same passion and fact-based arguments" to the economy debate as the health care debate ---- not by creating a REAL debate of the "facts", but by being able to FRAME the debate into the narrow confines of the capitalist status quo, which then ensures that his policies will continue to reward the corporate culprits who cause the problems.
Dennis Kucinich's email today says it well... "The President opened his speech speaking of how we have solved the economic crisis - how? By rewarding those who caused the crash! Is this the way we solve the health care crisis? Rewarding the insurance companies? Helping insurance and pharmaceutical stock to soar, propping up markets while skimping on health care? The very same system which caused the health care crisis is being rewarded with the guarantee of tens of millions of new customers mandated - by law - to have health care. The latest plan rewards the very companies that have denied treatment, denied care, denied drug coverage while their profits grow daily."
I would correct one statement in the email from Dennis: not "mandating everyone to have health care", but mandating everyone to purchase insurance. That's an important distinction, since the "reform" isn't going to prevent many of the egregious abuses, including rescission and skyrocketing costs.
The Senate Finance Committee hearings were a travesty of democracy where the people's lobbyists for single payer - doctors and nurses - were being arrested for showing up and the insurance industry execs were dictating what they would and would not allow in the bill. The committee members could not have been more deferential in their treatment of these executives. But after all, they came bearing gifts. Millions and millions of them.
So far, the little people are not without power. They can refuse to vote for any politician who accepts any corporate money. Unfortunately they aren't paying attention to who is being bought. And it will only get worse until they do.
When the people fear their government there is tyranny,
when the government fears the people there is liberty.
~ Thomas Jefferson
I agree with your correction!
"How long before they realize you can't eat optimistic speeches?"
You can, however, eat what you grow in your garden...
eventually, whether pro-actively or re-, the individual will bend down, pick up the various pieces of his whole life that he has continually, with encouragement, laid at the feet of various others, and, for the first time, bear the burden of himself by and for himself...attitude is everything...a feeling of belonging to a larger, meaningful movement including many like-minded others helps...so does marijuana...
we must change the way life's basics are funded, that no one goes without air, water, food and shelter, no matter the economics...private property must go...shared resources, sustainably managed, are the only answer...
Global Start Date: September 22, 2012...agrarian, acoustic life...let's get those gardens growing!
Who are you saying is "mesmerized"?
The unemployed people I know are DEFINITELY not taking it lightly!
There is no economic "recovery".
Except for one: the rich are getting richer.
It's far too obvious to ignore or be soothed by the MSM's happy news to the contrary.
... I am concerned this behavior is setting the stage for another sort of extra-legal measure: violence. I have been amazed at the vitriol directed at the banking classes. Suggestions for punishment have included the guillotine (frequent), hanging, pitchforks, even burning at the stake. Tar and feathering appears inadequate, and stoning hasn't yet surfaced as an idea. And mind you, my readership is educated, older, typically well-off (even if less so than three years ago). The fuse has to be shorter where the suffering is more acute.
I would say that while the above is a good start it would be better to send these traitors along with their lobbyists and congress whores etc to the Dick Cheney Home for Wayward Terrorists where some real pain could be inflicted.
PS I'm personally fond of the idea of putting their heads on pikes along Wall Street.
Defacing pikes is un-american. These are wall street types so they should be given the appropriate "business model". You see, the human body is composed of Carbon, Hydrogen, Nitrogen, Oxygen, Phosphorus and Sulfur. We need to sell derivative futures on these commodities at a target price. We then warehouse the broker and CEO dead bodies in the New york stock exchange until our target price is achieved. They would applaud our entrepreneurial skills and innovative financial engineering instruments. All hail capitalism.
"Suggestions for punishment have included the guillotine (frequent), hanging, pitchforks, even burning at the stake. Tar and feathering appears inadequate, and stoning hasn't yet surfaced as an idea."
All of the above!!!!! And after liquidating them, their assets can be liquidated and provide health care for all of the US.
Those people define themselves by what they own. Rather than attacking them first, attack what they own. Burn their cars. Deface their property. Smash their windows. Keep it up and they'll get the message, and you'll do less jail time. Take away their property and you take away their peace of mind. Make them live in fear and then we'll see how long they hold to the idea that wealth protects them and makes them special.
The people in charge who can investigate and prosecute these financiers won't act, because they are part of the same system and they benefit from it.
It's your money, it's your country. When they lobby the politicians to protect the rich and screw the workers, they're using your money against you.
Pick a side. Act.
Or not.
Sir, I beg your pardon! You really must learn the language of nuance.
You "reposess" the cars and houses.
You perform "accelerated depreciation" upon said cars and houses.
You do not harrass; you "supeona" frequently 24/7.
You never break the law. You ARE the law.
Remember, nuance.
agg:
that was very nice
thanks
gave me a chance to clap and cheer
ken
Fine, someone needs to start compiling a database of the CEO's home addresses workplaces, favorite restaurants, etc. Be it rocks in windows, slashing limo tires, or just "harassing", we need that information first.
Violence against individuals and violence against property are not necessary. There are hundreds or thousands of ordinary people for each one of the elite predators. If a significant percentage of such ordinary people would just engage in frequent acts of harassment of elite predators, not continually or in an organized fashion but sporadically and randomly, change could occur.
Wow Danny, so much for Hope & Change.
Orwell's Animal Farm is still true as the new crowd is no different than the old crowd. Some pigs are more equal than the greater population of pigs.
Look for followers, not leaders.
Draining the US Treasury 1) to keep Wall Street bankers from losing their many homes, yachts and jets, and 2) to juice the stock market, should not be construed as economic recovery.
I work with many small (and some not so small) businesses and nearly every one of them (the ones that haven't already gone under) will have less revenue in 2010 than they do in 2009. Some are surviving 2009 on accounts payable from 2008.