So the recession’s over, eh?
Let’s consider the facts and see:
1) There are more people unemployed now than there were in the Great Depression. And the numbers are still rising.
2) This bank’s (GS) doing awfully well. But any day trader will tell you that’s a chart on the verge of a retrench. This (COMP) one’s looking a little peaked, too.
3) As for the banks that really drive the economy, they’re doing far, far worse.
4) Former homeowners are showing up in homeless shelters in record numbers. Only now, it’s not their own mental illnesses and binges putting them there. It’s the crazies and bingers in the financial industries who caused their woes.
So we’ve got a jobless recovery and a capital-less recovery. Yet who but a few Goldman execs is prospering? Homebuilders like KB Homes (KBH) aren’t seeing any recovery. Even the profits of death and dying remain in decline.
Krugman’s right that real reform is needed, or the high rollers at places like Goldman will do us all again. Along with the scandalous Moody’s, who screwed everyone for a dime.
It is VERY heartening to hear that serious discussion is underway to end the McCarran-Ferguson Act - a federal antitrust exemption the insurance industry’s had in place since 1945. Not only has that industry failed to deliver on decades of promises to reform itself but it’s been busy undermining the reform push as it tries to maximize its windfall profits again, on the backs of everyone.
And as I’ve noted before, if Obama winds down either of Bush’s wars, that’ll add hundreds of thousands of GIs to the unemployed. So the economy is a disincentive to pursue the wisest and usually most cost-effective foreign policy moves.
So, using technical definitions, the recession may be ending. But using the ‘how people are feeling pinched” measure, it persists, and grows.
And it doesn’t just persist for the worst off. Pension accounts and investors will get hit again, before Christmas, by the stockmarket. That oughta do wonders for 4th quarter retail sales.
Until the banks start lending, business won’t be hiring. Until businesses hire, consumers won’t buy. And the recession will end at the speed of snails, with its backbone as vulnerable as slugs. This is not how Democrats historically rebuild an economy. Without a major federal jobs program, it’s voodoo economics, part deux.
October 19th, 2009 at 6:52 am
Galbraith’s analysis provides the obvious solution… to the clueless.