February 14, 2011
-- by Dave Johnson
Will DC wake up and smell the real economy?
In DC and Wall Street the economy is just fine. In fact it couldn't be better. Corporate profits and the stock market, after all, are way up -- the Fed has worked it's bubble-pumping magic yet again! And if you are in that top few percent that has significant holdings of stocks this, of course, is all you need to know. But for the rest of us, not so much. But who cares about the rest of us?
The financial collapse should have been a warning -- a message to change course. Instead we're back on the same destructive course. Bubbles, scams, corporate predation with huge bonuses incentivising even more scams, environmental destruction, all the income gains going to a top few, politicians purchased, and massive trade deficits (esp with China) all cooked up in a soup with, of course, tax cuts for the rich with budget cuts for the rest and more and more of the rest of us invisibly dropping off the bottom end.
The financial collapse was a warning and it has gone unheeded. Very little has changed and likely has gotten worse because Wall Street knows the government will bail them out. Marketplace, in a story about Fannie and Freddie, summed it up:
If you shift that fully to the private sector, you'll kind of get the worst of all possible worlds, I imagine. In that you won't have the support for the housing market, you won't have as much lending to the lower-income people. In the meantime, though, you'll still have the excessive gambling on Wall Street with smart investment bankers knowing fully well that if institutions get too big to fail, and the losses come, the taxpayer will be there to bail them out.
So there will be a next time. And next time it will be much worse than this time.
They say the economy is recovering -- so why are interests rates at zero? Not only that but the Fed is busy with "quantitative easing" which is sort of a way to lower interest rates below zero.
Why is the trade deficit back up to the stratosphere? That means things are even worse, not better.
How many foreclosures and "underwater" mortgages are being ignored in order to pretend the economy is recovering? How many bank balance sheets are playing "pretend and extend?"
How many people are un- and underemployed? How many people are dropping out of the labor force because they just give up, every month? How many people are losing unemployment benefits because they have been unemployed 99 or more weeks?
That is not "recovery" it is denial.
Why Don't We Learn?
Do we learn anything? Are we past the point of being able to address our problems? Kim Cranston of TransparentDemocracy wonders if we as a species are capable of solving problems on the scale we have created,
H.G. Wells said "History is a race between education and catastrophe." Current events suggest that education may be losing that race. ...
Dee Hock, the Founder and CEO Emeritus of Visa Inc, recognized some time ago that most of the "problems" we think we have "are symptom not disease. At bottom, we have an institutional problem, and until we properly diagnose and deal with it, all societal problems will get progressively worse."
Continuing to expect our institutions to resolve the "problems" that their "solutions" are in fact compounding may fit Albert Einstein's definition of insanity: "doing the same thing over and over again and expecting different results." As Einstein observed: "The significant problems we face cannot be solved by the same level of thinking that created them." It is time for us to consciously evolve our institutions to a higher level from which they can solve the problems they are now creating - the survival of our civilizations, and perhaps our species, depends on it.
March 10 Summit on Jobs and America's Future
On March 10, 2011, the Summit on Jobs and America’s Future will bring together leaders and activists who understand that America faces a jobs crisis – and who are committed to building a political movement for sustainable economic growth, dynamic job creation, and a revival of the American economy.
Posted by Dave Johnson at February 14, 2011 8:11 AM
Post a comment
Thanks for signing in, . Now you can comment. (sign out)(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)