Incredibly, GM announced that it is
emerging from its Bankruptcy a mere 40 days after filing. 40 days! We are told that some have spotted Green Shoots emerging
from the blackened soot where our economy used to grow. By this Fall, all should again be right
with the economic world and it will be safe to go into the deep end of the Wall
Street shark tank again. Don’t
believe it.
For one thing, and I expect no
agreement on this at all, we have not spent nearly enough to jumpstart our
economy from out of the comatose state that it has been slumbering in since the
end of 2007. We looked like we
were going to, but then we got cold feet and we didn’t. For another, unemployment – the
‘lagging indicator,’ to be sure – is still on its dizzying climb, each
increment assuring that another group of Americans will not shop till they
drop, or anything close.
Along with these frightening job
losses go so many other areas of our economy like the retail sector and
commercial real estate, in the latter of which we are told that the ‘other
shoe’ yet has to drop. A whole
procession of problems flow from people being out of work in droves. The 9.5% national unemployment figure
does not tell even part of the story.
Many commentators have opined that the real figures, statistical games
aside, are more like 14 or 15%, and that does not even take into account the
various subgroups and age ranges, where it is far worse among minorities, the
young, and the older worker – the last of whom is consistently being replaced
with the cheaper, younger model as the mandated ‘downsizing’ of so many
businesses now provides the justification to shed the older worker in favor of
the younger, with less fear of legal liabilities for employers.
Zombie banks are supposedly stable,
but they are still not lending. As
far as any of us knows, all those toxic assets are still on their balance
sheets, still burning a hole in investor confidence like a magnifying lens
trained on a piece of white paper in the summer sunlight. Looming questions remain about how much
money we can flood the market with before inflation rears its ugly head, and
when and where taxes must inevitably be raised to replace the sources of
revenue that have dried up with the kinds of losses and shrinkage that our
economy has suffered through during what is now going on 20 months of this
ordeal. As I write, I watch
Timothy Geithner on Fareed Zakaria’s Sunday morning talk show saying: "Banks
will have to do a lot to earn back trust and confidence," but, I struggle with
how that will be accomplished in the real world where credit, the lifeblood of
our modern economy, is still stretched tighter than a drum.
We are told that America has to
tighten its belt and that we have to learn how to do more with less; that is
easy to say but wickedly hard to imagine happening. Who among us would like to give up some of their lifestyle
to help us climb out of this? The
lesser developed countries of this world hunger to live just like us. They respond to our calls for less
greenhouse emissions: "You go first, America – you had the head start on us, so
let us pollute the hell out of things for some more decades to get our
industrialization up to where yours is and meanwhile, you cut back."
Meanwhile, we distract ourselves
with Michael Jackson’s never-ending memorials and booming record sales,
unfaithful governors and senators by the droves (what are they putting in the
water?) and abdicating Alaskan ones with higher ambition (if you can only
figure out what she is talking about).
Chances to re-configure how our economy works and our markets function
and to regulate markets for those exotic financial instruments which literally
brought the economic house down, seem to be getting more and more remote as the
behemoth financial industry lobby gears up to make sure that business as usual
will feature gargantuan bonuses come year-end, whether the economy is in the
toilet or not.
Democrats finally have the 60 senators they dreamed of now that Sen.
Franken has finally been seated – giving living proof to the maxim: ‘better
late than never.’ This, just in
time for the Blue Dog Democrats to begin the splintering of their own majority,
thus assuring they will squander whatever opportunity momentarily existed to
regulate what finally needs to be regulated to avoid another Depression, or the
dreaded, W-shaped Recession where, like FDR in 1937, when it was believed to
finally be all over, it crashed yet again.
The Summer Doldrums of August and
Vacation Season are but weeks away and I suspect that we are all a bit burned
out with news of financial catastrophes.
I certainly am. But this
thing is not over yet; not even close. We had better hunker down and accept that all the
encouraging talk of Green Shoots and that the end is in sight, needs real
action and commitment, both of which are still sorely lacking out there.