Down this road before …
We saw an article in CNNMoney.com today. The writer was calling our attention to “The financial meltdown’s unhappy anniversary”, and because we now know that this so-called “recession” began more than ten years ago, we wondered how far back the writer would take us.
He didn’t take us back very far.
“The crisis that began with the Bear Stearns debacle is about to enter year three. Yecch!” he wrote. Well at least he got the “Yecch!” part right. Here’s some of what he wrote:
“NEW YORK (Fortune) – We’re about to mark the second anniversary of the financial meltdown. But don’t expect to see any clinking of champagne glasses … The nightmare started June 12, 2007, when news broke that two Bear Stearns hedge funds speculating in mortgage-backed securities were melting down. That was the precursor to the panics and collapses that have led to a worldwide recession and the fall of mighty institutions like Bear, AIG, Lehman Brothers, and Royal Bank of Scotland.
“But even a clinkless anniversary has its uses – it’s an occasion to reflect on the past and contemplate the future. So let’s look at what the meltdown is really about, the unappreciated impact of Lehman’s collapse, and where we go from here.
“Yes, the meltdown started with subprime mortgages – ‘subprime’ is a Wall Street euphemism for ‘junk’ – but it has spread far beyond that. Problem areas now include credit cards, construction loans, office buildings, shopping centers, leveraged buyouts, nonjunk mortgages, and various and sundry securities based on all that stuff. So even if the U.S. housing market were miraculously restored to health tomorrow – not likely – we’d still have major grief.”
Not a word about unemployment!— the very condition responsible for the “major grief” he senses. The “unappreciated impact of Lehman’s collapse” isn’t lost on him though. That “collapse” siphoned hundreds of billions of dollars in bailout money from U.S. taxpayers. Quite an “impact”.
The writer who penned this report has just one small problem. His hangout is Wall Street and he, like the rest of those financial denizens, couldn’t find Main Street with a GPS. He, and they, should know about The New York Times, however, and would be well advised to read some of what columnist Bob Herbert has written about the games being played by the pros on Wall Street. Those wolves make Ponzi and Madoff look like rank amateurs.
What the “meltdown is really about” has been clearly explained by Mr. Herbert. “The economy is in shambles,” he wrote on May 10th . “Nearly 540,000 jobs were lost in April, a horrifying number. The unemployment rate rose to 8.9 percent. Even the most optimistic observers expect the job losses to continue, although, hopefully, at a slower pace. The unemployment rate is expected to keep on climbing, like some monster from the movies, toward double digits.
“We are stuck in what is – or will soon be – the worst economic downturn since the 1930s. Newspapers and the U.S. auto industry are on life support. The unemployment picture for even the most well-educated Americans – men and women with four-year degrees or higher – is the worst on record.
“If there is something about this economy to be cheerful about – something real – I wish someone would let me know.
“Poverty and homelessness are increasing and, as Lawrence Mishel, the president of the Economic Policy Institute, said during an interview this week, ‘There are a whole lot of people who are going to be economically desperate for many years.’
“Joblessness is like a cancer in the society. The last thing in the world that you want is for it to mestastasize. And that’s what’s happening now. Don’t tell me about the stock market. Don’t tell me about the banks and their perpetual flimflammery. Tell me whether poor and middle-income families can find work. If they can’t, the country’s in trouble.”
Be assured that the country is in trouble – big trouble – because the poor and the middle-income families cannot find work. And they won’t find work unless those in government follow the lead of those who authorized the emergency shipbuilding programs in the late 1930s.
Glen Ford, the executive editor of the Black Agenda Report, raised the question, “How Can U.S. Recover Without Manufacturing Capacity?” … and he answered his own question by stating factually that, “You can’t put people to work in American factories that don’t exist … The bankster parasites,” wrote Mr. Ford, “have neither the capacity or the intention to build anything other than mountains of debt for all of us. Therefore, Obama’s partnership with them spells doom for national recovery.
“Like Billy Preston said, ‘Nothin’ from nothin’ leaves nothin’. The U.S. cannot create the conditions for economic growth without rebuilding a manufacturing capacity. And the remnants of Wall Street have nothing to contribute to an economic recovery but an infinite capacity to steal.” [Like we said, Ponzi and Madoff were rank amateurs.]
Unemployment … factories that don’t exist … sure signs that “the worst economic downturn since the 1930s”, is unavoidable. But we‘ve been down that road before. As we commented last week, “When faced with the dual threat of economic and military devastation in the 1930s and 1940s, this country, under the leadership of FDR, the chief executive, undertook the enormous tasks of building the largest merchant fleet and naval fleet the world has ever seen. Three separate and distinct shipbuilding programs ordered by FDR, and the efforts of millions of American shipyard workers, paid off. Handsomely. The war was brought to a successful conclusion by our military, and the job-creating shipbuilding programs ended the joblessness of the Great Depression. Decades of economic success followed, and it wasn’t until U.S. manufacturers began outsourcing our needs … and our talents … that our economy was thrown into reverse gear.”
Wall Street and the “banksters” aren’t the least bit interested. Millions of jobs must be created, however, or “the worst economic downturn since the 1930s” will be as sure as tomorrow’s sunrise.