There is an old joke about the difference between a recession and a depression that goes something like this:
"A recession is when your neighbor is out of work.
A depression is when you are out of work."
Economists tell us that we are in the throes of a "recession." Tell that to the millions of people who have been out of work, with a staggering forty percent of them jobless for more than six months. They would surely call it a depression. Worse still, many of those same people are seeing the jobs they once enjoyed simply vanish. Recovery or not, they are gone forever because the industries that supported those jobs are shrinking or changing radically. I think of many of my colleagues and friends at newspapers and television networks, seeing their careers disappear overnight. But there are millions of others today in different industries in that same desperate, helpless situation.
Some politicians and economists say things may be getting better. Sunday's Washington Post suggests otherwise, proclaiming in its headline, "Three Indicators Spell Trouble For the Recovery." According to the Commerce Department, new home sales plunged to their lowest level in 50 years. A new CBS news report quotes the managing director of the Economic Cycle Research Institute calling certain unemployment figures "off the charts." Last week, new jobless claims confounded experts, growing by more than 20,000 instead of shrinking by that same amount which had been predicted. A recent New York Times headline pointed to an equally gloomy foreseeable future, "Millions of Unemployed Face Years Without jobs." If you are a homeowner, in over your head and trying to get out -- good luck. Sales of previously owned homes, which make up the bulk of the nation's buying activity fell for the second straight month.
Let's not overlook the walking wounded -- those who still have jobs but with additional workloads, reduced salaries or mandatory furloughs. Are you at work? Look around you. Are there fewer colleagues in your office today than two years ago? You are probably told by your friends, and perhaps even by your boss that "you're lucky to have a job." Be grateful, they say, and for the most part, we are. But we are also sad.
There is a general malaise sweeping the nation. Consumer confidence, as rated by the Conference Board's "present situation index," reveals the lowest marks since 1983. There is also a growing wariness of public and private institutions. People no longer trust their own government -- in fact a recent CNN poll suggests that a majority of Americans believe the federal government "poses an immediate threat to the rights and freedoms of ordinary citizens." Fewer people than ever seem to have faith in the financial system itself. Who can blame them? Brokerage houses and banks benefited to the tune of tens of billions of dollars in taxpayer bailouts, only to rebound quickly, claim record profits and offer massive bonuses for their top executives.
The news is downright distressing. Thank goodness much of the "news" we see and hear isn't news at all, but mere diversions. How else can you explain the fascination with who was eliminated from the "Top 24" on American Idol? We haven't even known them long enough to learn their names. And what about the sudden attention given to the cast of Jersey Shore? More people have seen them on news and entertainment programs than ever saw them on their MTV show. Fewer still can express why we are supposed to care about them in the first place. Even Tiger Woods dominated the airwaves and the ratings with his sex scandal. We can pretend that there is a significant economic importance to that story, given the dramatic fall in stock value of those companies he previously endorsed, but let's face it -- we watch because sex and scandal are interesting in some prurient way that we dare not admit publicly but we all understand. So much of the news is made up of these distractions that perhaps we won't have to linger too long on what is really happening around us -- people are losing their jobs, their homes, their retirement savings and sadly, and perhaps most importantly, they are losing hope.
To my way of thinking, that is a very basic, real world definition of depression.
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No Republicans object to welfare bailouts for bank billionaires, or Goldman/AIG bonuses or the cost of war, or tax cuts for the top 1%, but when legislation comes through to support ordinary Americans, then they (Kyl, Bunning et al) objects.
True hypocrisy & a lack of compassion!
If legislation to regulate the financial industry, fix healthcare, promote job growth, invest in new energy sources, and continue unemployment benefits would be passed by the Senate, consumer confidence and business confidence could emerge -- knowing what the new rules are and believing that excessive risk will not occur in the banking sector.
Instead, the US Senate fiddles while Rome burns. Every conservative Senator up for reelection in November needs to be bounced out -- meaning all Repubs and most Blue Dog Dems. They obviously don't know the meaning of the words "urgent", "crisis" or "patriotism". They need to go NOW.
Remember that the Great Depression of 1929 did not take its most deadly grip until nearly 3 years later.
Also bear in mind that the root cause of it is a deliberate, willful, and ONGOING financial crime, well-supported by the high crime of Bribery to the tune of more than $1 million per Member of Congress per day. The amount that is paid to Commissioners throughout the system is anybody's guess. The cost of the latest Supreme Court decision can only be guessed at.
Thousands of years ago, someone wrote: "the love of money is the root of all evil." Authors have penned cautionary tales like Rumpelstiltskin. These are, therefore, ancient crimes.
Our own Constitution attempted to lay down a blanket prohibition against all such crime (Article 2, Section 4), but it relied upon self-enforcement. The Founders could not conceive, "what if EVERY ONE of them is corrupt, and what if they have usurped the powers of all of the States by the very simple mechanism of keeping them all bankrupt?"
The statistics are rigged. Unemployment is already well above 30%. The future of our Republic is quite literally in peril. This is not a drill. Repeat: this is NOT a drill.
Nothing in history says that this less-than 300 year old experiment has to be successful. It may be a flash in the pan... and a very desirable piece of land.
Obama, Geithner, and Summers operated under the assumption that if they flooded Wall Street with trillions of taxpayer and Fed-created dollars, that money would quickly filter down to the blue-collar workers and everyone would be back to work happily flipping hamburgers and cleaning bedpans in no time.
Sure, many high paying jobs have permanently left America in the "recession", they reasoned, but being able to tout high employment figures is what's really important. Sadly for Obama and Geithner, Wall Street had other plans: Wall Street discovered that it is much more lucrative to hoard the government bailout money, or alternatively to make crazy bets against Greece with it (fully expecting that taxpayers will once again pay off their bad debts via bailout when things went south while they keep the profits they are currently making off the bad bets), than to loan it out to businesses. So now, much to Obama's dismay, we don't have the plethora of low-paying service jobs that he was planning to tout as his economic "success" for the November's elections.
Basically everyone is screwed except Wall Street, but Democrats and their tame economists are too terrified to admit it... though not nearly so terrified as they are of stepping on the toes of any Wall Street bankers.
The peak spending years of the baby boomers are over. The generation following them cannot fill their shoes as spenders. Not only that, but the baby boomers are transforming from spenders into savers more rapidly, as they come to recognize that Social Security is becoming insolvent faster than predicted, and as they recognize that pension funds are either underfunded or holding bad investments. They will drain buy money out of the stock market to maintain their accustomed standard of living.
All the very bad deficit projections for the next 4-6 years are not bad enough. Bond yields will soar and that will be that. We will miss the days of $1.6 trillion annual deficits then. We are entering a perfect storm. These cycles cannot be broken.
In Mexico in the mid-'90s Wall Street engineered a currency coup that tripled the debt owed by small businesses and family farms and also allowed for them to be massively ratejacked on top of it. Mexicans consequently formed the "el Barzon" movement and pushed back Wall Street and deposed their ruling party of 60+ years. In this country YouTube phenom Ann Minch has already declared the debtors' revolt and begun going after them (http://www.revoltstartsnow.com).
If you've been pushed under, you can read my book for free: http://www.scribd.com/doc/25443175/Debt-Hope-Down-and-Dirty-Survival-Strategies-Evaluation-Version-Complete