A Lifeless Cure

A Lifeless Cure
By David Glenn Cox



Wall Street is poised this morning to take another nosedive. Stock prices around the world are falling as Japan’s Nikkei dropped 3% and the losses averaged 3% all across Asia. European indexes are looking for a 2.5% drop as the global recovery runs out of steam and the problems which have caused it are not addressed.

The media likes to attach catchy names to things like these with euphemisms like “Jobless recovery.” That would be similar to a lifeless cure! Without jobs there can be no recovery. The Obama administration has followed the Bush route by pouring money in at the top and measuring what comes out at the bottom. The banks have used government assistance to buy other banks and borrowing money from the Federal Reserve virtually for free has helped to shore up profits.

It all sounds so good until reality steps in, unemployment is increasing and in many small market or single industry towns it has begun feeding on its self as the big industry folds it pushes the support industries out of business. In Sacramento business leaders say that business losses coupled with retail unemployment have pushed business levels to 50% of their pre-recession levels. Coupled with the shutdown of thousands of car dealers main street is fast becoming a ghost town.

If you are in business or help to operate a business you understand that most businesses cannot survive at that 50% level. Most operate at a 30% or so profit margin and at a 50% loss you can not layoff enough or cut back enough to survive. In our cookie cutter, big box retail world whatever store A has to offer store B has to offer as well so that they can only complete on price and location. Location can’t be changed leaving only price. So, name your poison! Cut prices in the dwindling market or die of loneliness.

There are many people out there that live firmly in our two party system, its like cowboys and Indians to them. If you’re not a cowboy then you’re an Indian. But the real question is not, is Obama right or is Obama wrong? The question is not are the Republicans right or are the Republicans wrong? The question is what can we do to bring about a recovery that will supply our people with jobs because anything else is just a patch like the current one that is destined to blow out.

Eric Canter House Republican whip claims the stimulus package hasn’t worked in the first six months. “This is a wake-up call for the administration. People see the stimulus hasn't worked, and now you want to lay on over $1 trillion in a health care plan."

Canter is a self obsessed ambitious little nerd boy who never spent even one day in public school. Sheltered under Mommy and Daddies wing and wealth Cantor fought against Obama’s stimulus package not because it wasn’t good for the country but because it was good for Eric Canter. He supported the bank bailout and was shocked to the core when he discovered that bailout money reached the bank where his wife was an officer.

It’s not A or B both parties can be wrong! FDR during the New Deal tried many projects that were unpopular or were out right failures. They were wedded to a goal and not to an ideology, the goal was to get Americans back to work and the rest would take care of it’s self.

“Yet our distress comes from no failure of substance. We are stricken by no plague of locusts. Compared with the perils which our forefathers conquered because they believed and were not afraid, we have still much to be thankful for. Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply.

Primarily this is because the rulers of the exchange of mankind's goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men. True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.” (FDR First Inaugural Address)

We have spent hundreds of billions of dollars to rescue banks yet banks are still failing at record numbers. The Federal Reserve has cut interest rates to .25% while the Treasury borrows money to funnel back into the Federal reserve at near 3%. That is the mother of all bailouts. We’re getting beat on both ends! As Eric Canter cringes in fear over any plan that offers healthcare to non-rich people. Canter is clueless a boob, a mean spirited and heartless boob.

Yet Obama’s stimulus package was too small, with too many tax cuts. Paul Krugman said it at the time and now even the Murdoch Street Journal is saying it now. Unemployment keeps growing, wages are falling, mortgage defaults and commercial loans defaults are at record levels and increasing. The plan has been to stabilize Wall Street to lure foreign investors back into the market and to a degree it worked bringing the Dow back to around 9300. Good news bumps it up and bad news knocks it back down but as our economy continues to stagnate the bad news will out weigh the good news no matter how hard they spin it.

It’s not A or B it’s we! It is time to redirect the government bailout programs to a jobs based approach. It is time for the federal government to step in and purchase mortgages to save homes and in doing so assisting the banks. This isn’t the first time our economy has failed us, we know how it fails and we know why it fails and we also know how to fix it. You can’t build a house from the roof down you must build from it from the ground up.

You must assist the least politically connected class in the country, the people. The current plan is to bury billions of dollars in the bank’s night soil and hope that dollar trees sprout. But it is doomed to failure because it won’t get the economy moving and it just makes the banks assets smell like money instead of like shit. When the shoe company goes broke the shoe box company goes broke and the shoe lace company goes broke. Giving money to the banks cures nothing and doesn’t move the economy and without the workers you ain’t going no where!

“His is a relationship to his little local bank or local loan company. It is a sad fact that even though the local lender in many cases does not want to evict the farmer or home-owner by foreclosure proceedings, he is forced to do so in order to keep his bank or company solvent. Here should be an objective of Government itself, to provide at least as much assistance to the little fellow as it is now giving to the large banks and corporations. That is another example of building from the bottom up.” (Franklin Roosevelt 1932)




http://www.bartleby.com/124/pres49.html

http://newdeal.feri.org/speeches/1932c.htm

The losses are so huge, the banksters needed our bailouts to keep the losses hidden so that they don't have to fess up to their fraud. But because the losses are so huge, they cannot be hidden forever. If only all that money that paid the bailouts to the banksters, had gone directly to the people for jobs and healthcare. But there cannot be any future, when the banksters took all the money.