February 11, 2009

Some Sobering Perspective and a Small Glimmer of Encouragement

Tuesday's economic news from Washington was decidedly mixed. On the positive side, the Senate passed its version of an economic stimulus package, which will now have to be reconciled with the version passed earlier by the House of Representatives, before (hopefully) moving on for President Obama's signature. On the negative side, Treasury Secretary Timothy Geithner was less than impressive in announcing the Administration's plans for shoring up the teetering banking industry, providing few details to a financial sector desperate for some level of certainty about the future. Stocks closed down significantly, reflecting what was widely perceived as a sour reception for Mr. Geithner's largely insubstantial remarks.

While it is heartening that public money may soon be on the way to help put the surging ranks of the unemployed back to work, the banking mess is every bit as crucial to getting the economy on the road to recovery. There are clearly no easy answers, but the president and the Treasury need to make some painful decisions, and make them soon. While it's readily apparent that things are dire, there have been few efforts to put context around exactly how badly things had degenerated by the time the Bush Administration left the White House.

With that in mind, take a look at the following items. The first is a graph provided by the Office of the Speaker of the House comparing job losses during the current recession and the contractions in 2001 and 1990. (h/t Paul Allen.) Little commentary is needed to grasp the seriousness of our present unemployment situation:

Click image to enlarge.

The next item focuses on the financial sector. The video below features recent remarks from Congressman Paul Kanjorski which seem to indicate that, back in September, we literally avoided the complete collapse of the American economy by a matter of mere hours. (The relevant statements begin at roughly 2:08 into the video.) If true - and based on the public actions and demeanor of those involved, I have little doubt that it is - this is sobering stuff, to put it mildly:

While this is intensely frightening, it's important to note that, if nothing else, over the past several weeks, President Obama has let the Republicans in Congress very publicly hang themselves with their own obstructionist rope. The most recent Gallup poll indicates that not only is the public solidly behind the president with regard to the stimulus, a strong majority also views the manner in which the GOP has handled the issue in a negative light. As I have stated in the past, I do not believe that single party rule is something to which this country should aspire, but looking at the evidence above, it could hardly be more clear that we can ill afford to accommodate political grandstanding in the near term. Progress is slow and inconsistent so far, but it is being made.

Finally, in an effort to avoid being a complete downer, I'll leave you with Jon Stewart's review of the Republicans in Congress who have suddenly found renewed fervor for fiscal conservatism:


lokywoky said...

I just don't see how any of these idiots think any of this is going to fix the problem until they do something about the underlying issue - sub-prime mortgages and all the spin-off worthless derivatives supposedly supported by these non-assets.

Everyone is yelling about the auto industry - well, making cars is not the problem - the availability of credit is.

It is just a matter of time before other large industries experience the same problems - and for the same reasons - as the auto industry. The problem is not business models, or who is making the most eco-friendly gidget. The problem is availability of credit.

And until the subprime mortgage mess is 'fixed' nothing else is going to work - it may slow things down a little bit, but that's all.


PBI said...

Hi LW,

Supposedly, a $50 billion program aimed at stopping foreclosures is next. The devil will certainly be in the details, but at least they appear to be thinking about it.

Remember, except for all the other systems of government in the world, democracy is the worst! The wheels turn slowly...


lokywoky said...

You are correct. But could we please have a new third party that is not dedicated to 'just say no'?

I think the time has come for something that is not the far far far right. Maybe something that is 'center right' as the neo-cons keep claiming the country actually is *g*

PBI said...

To be honest, I think there is a center-right party, and it's the Democrats. The whole perception of the political spectrum has shifted to the right since Reagan. I think we really need a progressive party on the left.