"This crisis is far from over"

[kentuck]

http://www.nytimes.com/2009/05/09/opinion/09herbert.html?ref=opinion

<snip>
Joblessness is like a cancer in the society. The last thing in the world that you want is for it to metastasize. And that’s what’s happening now. Don’t tell me about the stock market. Don’t tell me about the banks and their perpetual flimflammery. Tell me whether poor and middle-income families can find work. If they can’t, the country’s in trouble.

One reason the employment losses slowed somewhat in April was that the government added 72,000 jobs, most of them temporary hires as part of the preparation for the 2010 Census. The private sector dumped 611,000 jobs. Moreover, the Labor Department revised the job losses for March upward, from 663,000 to 699,000, and for February, from 651,000 to 681,000. Some 5.7 million jobs have been lost since the start of the recession in December 2007.

Mr. Mishel has been trying to call attention to the human toll caused by job losses on this vast scale. The institute estimates that the poverty rate for children is in danger of increasing from 18 percent, which is where it was in 2007, the last year for which complete statistics are available, to a scary 27.3 percent in 2010.

For black children, you don’t want to know. But I’ll tell you anyway. The poverty rate for black kids was 34.5 percent in 2007. If the national unemployment rate rises, as expected, to the vicinity of 10 percent next year, the poverty rate for black children would rise to 50 percent or higher, analysts at the institute believe.

..........more

[Zodiak]

1. It will take populist voices in Congress to even begin to address this issue

Because the current crop of corporatists that occupy all of the Republican party and nearly half of the Democratic party only care about Wall St. and the Banks, the people who pay for their campaigns. This has been demonstrated over and over, especially in the last decade.....and those same people seem to be deaf to the suffering.

Those are the facts, and until we DO something about it, we will suffer while the oligarchs dine on truffles and caviar at OUR expense!

We tried replacing the corporations as the primary donor to campaigns, and the corporatist politicians just took the money and STILL gave their ears only to the corporations. They don't care....they don't want us....they don't think about us. That much is painfully obvious.

What are we doing to do about it? Because truly the ball is in our court.

[neverforget]

2. But some lady on CNN this morning said that the recession is almost

over!:banghead: If you ignore all the bad news, things aren't that bad. :sarcasm::banghead:

[lunatica]

3. It's getting truly scary

The domino effect is gaining steam, not slowing down. Every two months more than a million people lose their jobs. And when/if the car companies sink that itself will mean millions of job will be lost and businesses will fail. We'll end up driving rusty broken down vehicles in a short time.

It's just scary

[Greyhound]

4. This demonstrates the wrong-headed thinking that dominates this administration.

Small business drives the real American economy and the stimulus package merely drops a few crumbs for small businesses.

[glowing]

5. We so need an extra stimulus bill. Homes are sitting empty in foreclosure,

and we have families living on the streets or thrown together with various family and friends. There is something terribly wrong with this picture. Its time that cities/ towns take a pro-active approach. Take all properties that sit on foreclosure for more than 3 months.. use them to house families that have lost everything. When they begin working again and have enough money to pay rent or possibly buy the place they are in, then the banks win again. AND any current properties that are going into foreclosure would be halted until job creation with real pay begins again... even if that means 2 years from now. There is no reason that the bankers are still banking on multi-million dollar bonuses and good, honest people are getting nothing at all.

[kentuck]

6. Those are the kind of ideas we need ...

to get back on our feet.

[glowing]

8. I wish everyone would head to city council and demand it.. sit there holding

them hostage until they do something.

[PufPuf23]

7. Posted in an earlier thread

The solutions are obvious, but the inertia and vested "economic elite entitled" interests are the problems in solving the financial crisis. I do not like the direction of Geithner, Summers, et al one bit.

Sarah Palin and killing wolves by helicopter is an apt metaphor for an ecological description of why feeding the black holes of insolvent bank holding companies is a bad strategy.

The economy is an ecosystem just like the wolves-caribou-vegetation-soil/sun/water complex in Alaska. The relationship is a pyramid capped by the predator wolves and caribou consumers and users of vegetation for food and shelter. Think of the soil/sun/water and vegetation as natural resources and infrastructure respectively required to support caribou. Caribou populations feed the wolves. Killing wolves flattens the triangle and increases the number of caribou for hunters in concept. Caribou populations go through cycles, not unlike business cycles, where their food, the vegetation is renewed by fire with a commensurate rise in caribou population. Caribou age class structure, health, and fecundity vary as well and wolves "thin" the weak and wolf population cycles somewhat lag the condition of the caribou herds.

Dumping billions of dollars into insolvent bank holding companies in the hope that they will extend credit for businesses and consumers is in fact merely hope and an attempt to buy time to re-inflate failed institutions. We citizens face the situation where infrastructure (in the broadest sense including roads, schools, small businesses, manufacturing, and so on) is degenerating and we are a poor prey base for the financial elite. The last thing consumers (us caribou) need is more debt. What we need are good paying jobs, health care, education, and so on. More debt is a caribou with more ticks.

I would compare dumping billions of dollars into insolvent bank holding companies to dropping cow carcasses to the wolves because the caribou population has collapsed. Not only is there no certainty that the monies will be made available to businesses and consumers, but, even if credit is extended, the major problems are existing consumer and small business debt combined with the collapse of asset values, loss of jobs, and loss of consumers: think collapse of the vegetation needed by the caribou for food and shelter.

A rational solution:

1. Reinstate Glass-Steagall and break up the bank holding companies. Not only are the mega-bank holding companies "too big to fail" but the very nature of combining commercial banks, investment banks, and insurance companies creates a system full of "moral hazard". The break up could be by bankruptcy or nationalization (IMO the better solution) to separate the wheat from the chaff and then re-privatize solvent financial businesses. As an aside, a healthier and more robust economy would be to reduce the size and bring back more locally-owned businesses in general. The "box stores" literally drain capital out of local economies.

2. The taxpayers' investment in the financial institutions should be limited to equity investment in marginal parts of the broken institutions. The monies are best spent at the bottom of the ecological/economic pyramid to improve the lot of consumers and small business. I would suggest investment in: (1) infrastructure, education, health care, and new technologies; (2) true cost of living adjustments in programs like social security and even welfare over the short term; (3) lowered tax rates for 95% of the taxpayers and highly progressive taxes on the top 5% until the economy is stable; (4) debt forgiveness or rate reductions on student loans and credit cards; and (5) mark to market principal reductions on mortgages. Spending stimulus monies on us caribou will have a 5X-7X multiplier effect that will ripple upward through the economy while pouring the same dollars into the top serves failed institutions and financial managers with less economic multiplier effect for society as a whole. Socialized health care for all with private insurance an option would be my preference and best for small business and social welfare. We need far more and better trained medical professionals.

3. Re-regulate the financial institutions and re-structure the Federal Reserve system. More transparency and oversight is a requirement. Limit the use of derivative securities.

4. Re-think global trade agreements and limit foreign ownership of domestic assets. We need to be wise in decisions about domestic jobs, the environment, and use of natural resources.

The current stock market recovery is a mirage until us caribou have adequate food, shelter, other necessities, and and discretionary income and time for pursuit of happiness. Tax payers and the less fortunate need adequate income from jobs and entitlement programs. The volatility of the current stock market (up 200 one day, down 110 the next and so on) is not a sign of recovery but of profit-taking by hedge funds and large private investors that invest on market volatility not value. We are consciously or unconsciously being set up for devalued assets further consolidated by the large investors with cash that is being drained from the market.