Shaky Foundations for the Economy
Two earthquakes, two vastly different consequences. If anything makes you appreciate solid foundations (not to mention building codes), it's the sight of those San Diego buildings swaying – but not falling – in Sunday's 7.0 quake; the same size quake that devastated Haiti.
When it comes to our economy, however, the foundations look anything but secure.
Last week Tim Geithner told steelworkers in Pittsburgh that unemployment is to remain "unacceptably high" for some time. He blamed what he called "the recession". But on the very same day, it emerged that what had been a recession for many had hardly been recession for all.
In 2009, a year of decline for most of us, the top 25 hedge fund managers made an average of $1 billion each. There was, said investor Carl Icahn (who made $1.6 billion), "a great opportunity in debt" last year. It's a stunning admission from a guy who spent the 80s as a corporate raider. He spent that decade laying people off.
In the 2000s he and the country's other top earners – speculators – are making out, not from making widgets or giving people jobs, but from making wagers -- that people (and companies, even counties) will or won't default. Think about it. The White House staff fanned out this weekend talking up job creation and a bright future for all, but where's the incentive for creating jobs when the fattest fat cats are getting fatter by the day on how indebted we all are?
It makes you queasy, but not in a good way. The foundations of our economy seem more Haiti than San Diego, sad to say...