Assuming no other shock to economy, the time has passed (4.00 / 4)

for true economic stimulus.  We needed a bolder investment in infrastructure but didn't get it.  Now, the Obama Administration will have to rely on consumer sentiment/confidence to improve the economy but I don't think that will happen.  

I agree about the populist backlash brewing. Unfortunately, I believe the Democrats and the Obama Administration missed their chance (and may lose a chance to make it up with health care reform) about doing something for the real economy.  They will suffer the consequences.

Don't be fooled by the headlines: U.S. Consumer Spending Rose, Income Gained in May. This may be only a temporary increase with no lasting effect.  Besides, Americans are still de-leveraging, paying down debt, there will not be any recovery in consumer spending.  The only way to avoid this very painful "recovery" was to increase people's incomes through employment.

I hope I am wrong.

RebelCapitalist - Financial Information for the Rest of Us.

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by: RebelCapitalist @ Fri Jun 26, 2009 at 08:26:07 AM CDT

Oh, you're not wrong at all... sadly. (4.00 / 5)

Consumers accounted for 70% of GDP, but they're down for the count for the foreseeable future. The housing crisis won't abate until after the 2012 round of recasts on garbage paper no one will be able to afford. So housing prices and CRE will continue to plummet until then.

Couple that with shrinking employment, hours and wages and it's only worse. Add in Obama's planned privatizing Social Security (which should already be DOA, but probably isn't) and who knows what he's going to do with Medicare... and the social safety net, what's left of it, is in doubt... and with it, the very legitimacy of government.

I have yet to hear from the "Green Shoots" people just where they think the recovery is going to come from. Banking is the only real possibility, it seems to me, thanks to the unwitting generosity of a couple generations of future taxpayers. It won't come from manufacturing. It won't come from consumption or credit.

While the neo-liberal Masters of the Universe are currently pleased with their success in convincing low-information voters that stimulus is too expensive, this will not last as the U3 and U6 climb into the stratosphere. Add in the additional loss of healthcare that will go along with that, exhaustion of unemployment bennies and I'd say a backlash is going to happen at some point.

While Obama didn't cause this mess, he's only making it worse and he has to own that. Ditto for those in congress who've clapped loudly at all this stupidity.

One thing is certain: The future ain't what it used to be.

When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it.

-- Frederic Bastiat, "The Law", 1850

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by: Emocrat @ Fri Jun 26, 2009 at 12:23:20 PM CDT

[ Parent ]

Green jobs? (4.00 / 2)

Too many involve plastic and a blow dryer.  They are low paid, and the label is way too broad.  If an employer changes work schedules to 4, 10 hour days and saves a commute, his jobs are also green jobs no matter what they do.

Obama needs to renegotiate NAFTA and put tariffs on imports.  We need an industrial policy for this country that values manufacturing because that is where most of the high wage jobs are.

Manufacturing can be focused on battery technologies, windmills, autos, etc.; but we need to start making computers, TVs and planes.  Boeing is on the brink of disaster in the US.  What happened to autos is going to happen to aerospace.  Nothing is safe without an industrial policy.

NAFTA is a free trade and investment agreement that provided investors with a unique set of guarantees designed to stimulate foreign direct investment and the movement of factories within the hemisphere, especially from the United States to Canada and Mexico. Furthermore, no protections were contained in the core of the agreement to maintain labor or environmental standards. As a result, NAFTA tilted the economic playing field in favor of investors, and against workers and the environment, resulting in a hemispheric "race to the bottom" in wages and environmental quality.

 Thanks to good old Bill Clinton - the smuck.

They're asking for another four years -- in a just world, they'd get 10 to 20. ~~ Dennis Kucinich  

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by: dkmich @ Fri Jun 26, 2009 at 09:11:51 AM CDT

Clinton was just doing the bidding .. (4.00 / 1)

of his corporate masters(it's the DLC way after all)

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by: Calvin Jones and the 13th Apostle @ Fri Jun 26, 2009 at 09:15:19 AM CDT

[ Parent ]

Likewise, so is Obama. (4.00 / 1)

It's because of that DLC-corporate-lackeyism that has led me to give up on the Democrats altogether.

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by: Michael Kwiatkowski @ Fri Jun 26, 2009 at 18:19:15 PM CDT

[ Parent ]

We need a progressive industrial policy (4.00 / 2)

Green jobs seems too easy. Many perhaps most jobs will always be mundane work like plumbing, electrician, librarian, and so on. We have an industrial policy but it's not geared towards workers who make up the majority of Americans. It's geared exclusively to corporations and investors. We need to balance the interests of workers (who need jobs) and their employers (who need consumers here in the US).

I'd like to see quotas for specific industries with corporate tax rates set to zero for companies that hire exclusively within the US. When the quota is hit, then the corporate tax rate equalizes. That'll be the day but this sort of approach would reward companies for keeping jobs here yet allow them some flexibility. Most important, it would ensure a minimum number of jobs are available when recessions and depressions hit.

One big reason for this jobless recovery is that many of the jobs people would get are overseas. Good luck getting those back without a government policy reversal.

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by: TSlavin @ Fri Jun 26, 2009 at 10:30:10 AM CDT

[ Parent ]

This one and the two before it... (4.00 / 1)

THE big reason for this jobless recovery is that many of the jobs people would get are overseas. Good luck getting those back without a government policy reversal.


They're asking for another four years -- in a just world, they'd get 10 to 20. ~~ Dennis Kucinich  

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by: dkmich @ Fri Jun 26, 2009 at 11:54:44 AM CDT

[ Parent ]

Mike ... (4.00 / 4)

Did you see any signs that Obama got this .. during the transition? ... because lets face it .. Larry Summers is no fan of the working man/woman ... neither is Bernanke(despite the Fed's full employment mandate) or Geithner ... Obama could have scored points(yes .. cheap points .. but so what?) going after the banks a lot harder than he has ... because no one but NY(and plenty of NY'ers hate it too) loves Wall St .. and Wall St will survive and function .. no matter how hard Obama goes after it .. I remember not too long after the inauguration .. that Obama was pretty pissed about the jobs number .. and basically said it can't continue .. I wonder what he has to say now .. now that 2 million more people are with out jobs

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by: Calvin Jones and the 13th Apostle @ Fri Jun 26, 2009 at 09:13:49 AM CDT

Not time for cautious (4.00 / 9)

Yes, Reagan jimmied the stats in 1986 so people think thinhs are better than they really are. But the facts are pretty obvious.  This is the worst economic downturn in 80 years (since the Crash of 1929) and already one of the four worst economies in US Hisory (Panic of 1837, Panic of 1893, the Great Depression).  

What those three incidents teach us is crystal clear.  The public throws out the incumbent party and keeps throwing them out until something is done. The greatest one election purge came not in 1994 but in 1894 when the ruling Democrats under Grover Cleveland (a very conservative Democrat who used federal troops to put down a strike) lost 125 seats (out of 357 IIRC) in the House.  In 1930 the Republicans lost 50 seats in the House.  Not solving anything, they lost another 97 in 1932.  The Panic of 1837 led to the election of the first Whig President in 1840.

Conservative Democrats represent the most precarious seats and are the most likely to be thrown out if they continue their obstructionist ways.  And they deserve it.

The Supreme Court may give more free speech rights to money than to actual protesters but the corporations only rule until the next election.  Then it is our turn to vote.  I'd like to sack the bums in the primaries but if not they may fall en masse in the general.

The Republicans are already attacking Ben Bernanke, a Republican appointed by W.  We should be attacking him; not the Republicans.  We should be going after the bankers and cleaning up the mess instead of propping up the incompetent plutocrats.  We want an FDR or even a domestic policy LBJ and we get "practical" half measures.  Half measures are not practical in these times.

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by: David Kowalski @ Fri Jun 26, 2009 at 09:15:11 AM CDT

Let's Build a New Real Economy with Real Sustainable Jobs Starting Right Now (4.00 / 6)

Great post, Mike.

It's getting clearer every day that Congress and the White House are going to continue shafting the American people and whittling away the job base with their trickle down policies favoring big corporations and big banks.

It's also getting clearer every day that we're going to have to rebuild the economy from the bottom up using our own resources and entrepreneurial ingenuity.

A blueprint for how we can do this has been provided by Harvard economist David Korten and Sarah van Gelder, executive editor of Yes! Magazine, which Korten founded.  

Here are a couple of links to their work:

Sarah van Gelder, The New Economy Won't Be Like the Last One, YES! Magazine and Common Dreams, June 25, 2009.

In it, she writes:

The new economy is built on new forms of money, and on democratic finance and business. In the summer 2009 issue of YES!, we report on worker-owned cooperatives that distribute the benefits of hard work to employee-owners who call the shots in democratic workplaces. These co-ops spend locally and are rooted locally, so they are long-term boons to their local economies. And they don't close down in favor of sweat shops in low-wage regions.

In the new economy, credit is provided through local banks rooted in the communities they serve. Credit unions, community development banks, and other democratic institutions also serve, rather than cannibalize, the real economy.

I also recommend the following two articles by David Korten:

Don't Fix Wall Street, Replace It: Why not an economy of real wealth?, Yes! Magazine and Common Dreams, February 13, 2009.

Why This Crisis May Be Our Best Chance to Build a New Economy, YES! Magazine and Common Dreams, June 6, 2009.

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by: Nancy Bordier @ Fri Jun 26, 2009 at 09:25:49 AM CDT

Gary Null has "A Progressive Stimulus Package for America's Future Sustainability" (4.00 / 1)

Link here

I don't think that it has nearly enough details to impress an economist (not that I have a good idea about how much detail an economist would need), but as a starting point for developing a plan with lots of charts, graphs, and spreadsheets, it seems good.

DemocracyABC.org
TheRealNews.Com
http://www.pdamerica.org

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by: metamars @ Fri Jun 26, 2009 at 10:41:53 AM CDT

[ Parent ]

Oops, bad link (0.00 / 0)

This will work.

DemocracyABC.org
TheRealNews.Com
http://www.pdamerica.org

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by: metamars @ Fri Jun 26, 2009 at 14:32:32 PM CDT

[ Parent ]

yes but (0.00 / 0)

I actually think some of Obama's so-called conservative stance on certain issues are due to his attempt to protect jobs. But overall I totally agree that jobs or no jobs will determine his popularity at the end of his first term. The hapless GOP are unlikely however to mount much serious opposition until 2016 imho.

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by: aiko @ Fri Jun 26, 2009 at 09:25:59 AM CDT

Which stances protect which jobs? ... (4.00 / 2)

after bailing out Wall Street .. he had to bail out the auto companies ... or else shit would have really hit the fan .. but he has to do a lot more

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by: Calvin Jones and the 13th Apostle @ Fri Jun 26, 2009 at 10:50:42 AM CDT

[ Parent ]

i was thinking of coal and mt. top removal (0.00 / 0)

as well as wall street and gm. sure we could id more non-progressive policy that supports the employed status quo.

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by: aiko @ Fri Jun 26, 2009 at 11:01:26 AM CDT

[ Parent ]

Getting rid of mountain top (4.00 / 4)

removal would create more jobs, since mountain top removal was favored because big coal didn't have to hire as many workers as they did with traditional mining methods.

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by: Dameocrat @ Fri Jun 26, 2009 at 17:33:02 PM CDT

[ Parent ]

I don't agree actually (4.00 / 2)

Obama needs to institute a real european social safety net.  People don't want the Clitonian ideal of jobs for everyone.  Thats why gore had such a problem winning.  We want a more sane lifestyle rather than the model of endless growth.

http://transgendermom.blogspot....

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by: transgenmom @ Fri Jun 26, 2009 at 12:09:12 PM CDT

Thank you, Mike (4.00 / 4)

I hate the phrase "jobless recovery". If people are not getting decent employment, there is no such thing as a recovery. It doesn't matter if corporate profits go up...What matters is whether regular folks are feeling any difference in their lives.

Please, please keep hammering on this. We've got to put pressure on the pols and the corporate media to get out of their fucking bubble about this.  

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by: Oaktown Girl @ Fri Jun 26, 2009 at 15:45:11 PM CDT

Obama needed to take on the banks instead of enable (4.00 / 3)

them. He is doomed to follow in clinton's footsteps as he chose to by relying on rubin and summers. 2010 is going to be ugly

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by: teral @ Fri Jun 26, 2009 at 18:34:06 PM CDT

Disagree, Mike... (0.00 / 0)

I disagree with your statement:

they know he inherited a big mess, and they know he's working hard to fix it.

He's NOT working hard to fix anything and anyone who believes that is either a total idiot, or not very well informed.  The Obama King and his policies, as well as henchmen Sumners and Geittner know exactly what's happening and have no intentions of doing anything for the economy. Don't believe that? - Wait until the middle of October 2009 when the bear market crashes and implodes, and then lets see what the Obama King and his pathetic minions have to say...

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by: Gloughlin42 @ Fri Jun 26, 2009 at 19:16:19 PM CDT

Obama's ASKING for a backlash (4.00 / 2)

 His bipartisanship fetish will destroy his presidency -- if it doesn't destroy the country first.

 That he hasn't learned the lesson from the stimulus bill about the Republicans' bad faith just boggles the mind.

 I can't imagine he wants to go down in history as the man in office when the US finally collapsed. What is he thinking?  

"We judge ourselves by our ideals; others by their actions. It is a great convenience." -- Howard Zinn

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by: Master Jack @ Fri Jun 26, 2009 at 20:57:57 PM CDT

The need for human labor is being destroyed (0.00 / 0)

by teams with a fraction of the collective budget allocated to stuffing our maws with potato chips or mowing the lawn on Sunday.

In 2 years the dexterity and grace of robot hands has doubled.

2007.

2009.

Some speak of global warming as a threat to the good order and discipline of civilization; they are worried about the final when they haven't even studied for the mid-term...

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by: Paul Goodman @ Fri Jun 26, 2009 at 21:14:24 PM CDT