Great Recession

Are We On The Way To A Third Depression? The 2010 Midterm Elections Are The Key! :(

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Nobel Prize Winning Economist Paul Krugman, a NY Times columnist, has stated recently that the United States is in danger of falling into a “Third Depression” that will last for many years! 🙁

This is not the first time the suggestion has been made, mostly out of fear, that the economic downturn that began in December, 2007, may slip further into a long range deterioration in employment, housing, corporate growth, state and local government services, and sustainability of the government “safety net”! 🙁

Krugman describes what he calls the “Long” Depression of 1873-1879, begun by the Panic of 1873 on Wall Street, but causing economic instability for two decades after the formal end of the event, lasting until the turn of the 20th century!

Of course, the later “Great” Depression of 1929-1939, which saw a revival from 1933-37, but then a further decline in 1937-38, was the worst economic times this nation has ever seen! 🙁

The problem in Krugman’s estimation is that MORE economic stimulus is needed, rather than less, and this debate about spending versus the deficit is raging in Washington, DC, and will determine the future of this economic downturn we are living through, which is called by many others besides Krugman, as the “Great Recession!” 🙁

IF the Republicans, with their lack of ideas on the economy other than more tax cuts for the rich, somehow regain control of both houses of Congress in the midterm elections, then it seems quite clear that we are doomed to a further decline and total social disintegration, as if conditions do not improve, the danger of a breakdown of law and order is a real threat! 🙁

As the author stated in an earlier entry, we cannot afford to let 2010 and after become 1937-38, when Franklin D. Roosevelt gave in to criticism of government spending, cut government programs, and triggered a new economic collapse only turned around by World War II!

So the midterm elections are the key to our economic future, and will determine much of the next decade of economic history for all Americans!

Senator Ben Nelson Personally Responsible For Defeat Of Extension Of Unemployment Compensation! :(

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Senator Ben Nelson of Nebraska is clearly the most conservative of all Democratic Senators!

He tends to vote with Republicans a good deal of the time, since he represents a state which is more conservative than most!

It is understandable that Nelson is often on the fence on party issues, but it is unconscionable that he would block the extension of unemployment compensation to millions of people who are desperate, many of them out of work for nearly two years in the worst economic conditions since the Great Depression! 🙁

These people will lose their homes or apartments; many will go hungry; their children will experience the horrors of total poverty; and the health of these unfortunates will deteriorate under the stress! 🙁 The Great Recession is still raging! 🙁

And yet Nelson, and the entire Republican party in the Senate, with the exception of the two Maine woman senators–Olympia Snowe and Susan Collins–seem unconcerned about the human suffering they are causing! 🙁

The longer people in the millions are out of work, the longer the deep recession will last, as if one does not work or have disposable income, then it brings down the economy for other Americans! This hardheartedness on the part of Nelson and the GOP is incomprehensible! 🙁

And ironically, as Robert Bryd left the Senate chamber for the last time after being in a casket in the legislative body he loved, the Senate Republicans and Ben Nelson dishonored their colleague, as had he been alive and able to vote on unemployment compensation extension, it would have passed in time for the July 4 holiday! 🙁

Now, Senate Majority Leader Harry Reid will have to struggle to find a 60th vote to overcome a filibuster, and that cannot be done until the Senate returns on July 12 after the holiday break! 🙁

How can Ben Nelson and his GOP colleagues enjoy their break on the backs of the unemployed and needy? 🙁

This whole situation is absolutely a disgrace! 🙁

The Republicans And The Great Recession: They Just Don’t Get It! :(

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The Republican Party is proving yet again that they just don’t get it when it comes to the Great Recession! 🙁

Resisting necessary financial reform, and blocking an extension of unemployment compensation to desperate people, it reminds us too much of the years of the GOP under Herbert Hoover, and during the New Deal of Franklin D. Roosevelt! 🙁

When, oh when, will the American people understand that it was the GOP which put us into this mess, and now refuse to do anything to get us out, as to them, the only thing that matters is preventing Barack Obama from having any success! 🙁

The thought is that if Obama fails to accomplish his goals, they gain, as Obama himself said yesterday in a public rally in Racine, Wisconsin! But it seems to the author that exactly the opposite will happen, and that the American people will come to realize that Obama is concerned about them, and the Republicans are not! 🙁

Outgoing Senator Robert Bennett of Utah, a victim of the Tea Party Movement, has stated recently that while he thinks his party will win Congress this fall, that they only have slogans, and no programs or ideas, and that therefore, it is likely that even if they do win control, they will lose in in 2012!

Certainly, every utterance of Senate Minority Leader Mitch McConnell of Kentucky and House Minority Leader John Boehner fails to give any encouragement or inspiration to anyone who is listening! They come across as hard hearted, unconcerned, vapid spokesmen for their party!

The thought of Boehner as Speaker of the House makes one wonder, as his reputation is that he is NOT a hard worker, and cannot be reached after 5 pm! In other words, he is lazy and uninspiring!

On the other hand, listening and watching McConnell makes one feel as if he is at a wake! LOL

A more inspiring leader may be House Minority Whip Eric Cantor of Virginia, but there are rumors that he is looking to run for the Senate against Jim Webb in 2012, and that his heart is not in the House anymore. In any case, he and Boehner do not act seamlessly, and therefore, the GOP leadership is mediocre! 🙁

But it is not just the leadership! It is also the membership in both houses that simply can be seen as having no imagination, no new ideas, and ultimately, no concern for the American people! 🙁

Hopefully, the American people will see this by November, as Vice President Joe Biden predicts will be the case! We shall see soon enough!

Protests Nationwide Against Higher Education Budget Cuts And The Tea Party Movement

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Higher education is facing a crisis nationwide, as state budget cuts and outrageously higher tuition costs are forcing many students to drop out of college, take more years to complete their degrees, and add an overwhelming burden of long term debt through student loans that will predetermine, in many cases, the fields they specialize in for a career.

This is not an issue just of how it affects individuals; it affects the future economic, social, and security interests of the nation!

The Great Recession is undermining the ability of state and local governments to provide the proper education to the eighty or more percent of students who do not have the economic means to attend private universities. If we do not provide moderately priced public higher education, it will lead to many students not fulfilling their intellectual potential. It also will force many students out of comparatively low paying fields, including nursing, teaching, and social work, which desperately need the best, most committed people for the nation’s secure future.

This crisis also weakens the long term knowledge base of millions of students, who often come out of public high schools poorly equipped to deal with the real world, because of a low general knowledge of what they need to know. Having the stress of needing to work multiple jobs to just survive in college makes the ability to learn permanently harmed, and undermines the purpose of college beyond career preparation: intellectual investigation and inquiry.

Unfortunately, the only solution long term is an increase in taxes and aid from the federal government, but that conflicts with the reality of the economy, with millions of people out of work, and millions not able to pay property taxes as their homes are foreclosed.

It also conflicts with the Tea Party Movement, which promotes cuts in taxes and cuts in government spending, an impossible scenario as that only promotes long term inferiority educationally in all of the states. It is the right wing, conservative willingness to back constant deficit spending for wars, and deregulation of the economy that has led to this horrific Great Recession.

If we have the Tea Party Movement succeed this fall, the situation educationally will only worsen dramatically, as their complaints, and solutions of the crisis we are in will only create further chaos and anarchy, which may just be their purpose ultimately! 🙁

The Ongoing State Budget Crisis In California And Many Other States

Ronald 1 Comment

California is often called a microcosm of the nation, with one of every eight people living in the Golden State, and the state being one of the top ten economies in the world.

The state has been reeling from record budget deficits, which have led to budget cuts, tax increases, and a constant state of crisis relating to social services, including education, health care, and aid to the poor, the young, the elderly, and the state work force.

Governor Arnold Schwarzenegger is in his last year as Governor, and it will be difficult for him to gain any traction on these problems in a political year where there is such a total collapse of cooperation with the legislature, and everyone is up for election.

Many other states have similar budget gaps in the double digits, but at a lower level than California. These states include Arizona, Colorado, Hawaii, Iowa, Maryland, Nevada, New Jersey, New York, and Vermont. 36 states have some budget gap that is creating a crisis.

It typically takes two years beyond a recession for state economic outlooks to improve, but with the high level of foreclosures and unemployment at present, the collection of sales, income, and corporate taxes is far lower than is needed to meet social service needs across the country.

Despite conservative opposition, it seems necessary for more federal aid to the states, with the argument being if Wall Street, the banks, and the auto industry could get federal aid, then the states must also be assisted, probably by another economic stimulus, which has helped to some extent to lessen the pain of the recession in many states, although not solving it.

This crisis comes just as the demand is growing to cut government spending because of deficit concerns, but if the states are not assisted by the US government, future chaos and massive suffering seems likely. What an unfortunate mess the Obama Administration faces to deal with the reality of tremendous poverty and suffering in much of the country!

It seems to me the only alternative is more assistance, as FDR increased in the second year of his administration during the Great Depression. Lack of action would be far worse!

The First Decade Of The 21st Century: “The Big Zero”

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We are ending the first decade of the 21st century in a few days, and as we look back, the realization is, as Paul Krugman in the NY Times calls it, that the period was “The Big Zero”, with the nation in the midst of the “Great Recession” as it ends.

How is it Zero? First, the investment in stocks in the beginning of the decade came out with no profit by its end, including for those who were planning for their retirement, the so called “Baby Boomers” born after World War II.

Job Creation was Zero, and the highest unemployment since 1983 by the end of the decade resulted.

Housing prices came out Zero, after a boom early in the decade, and a complete collapse late in the decade.

Median family household income was also Zero, a sad commentary on the economic disaster of the past decade.

Overall, nothing good happened economically, and one has to wonder how we emerge from this economic mess with the possibility now of expansion of war into Yemen, and concern about the future of Iran and Pakistan, along with the continuing wars in Iraq and Afghanistan.

Tax cuts and deregulation under George W. Bush contributed a lot to this disaster, and yet we hear nothing new from GOP leadership.

What a difference from the Clinton 90s when there may have been moral lapses on the part of the President, but it was a time of economic boom and avoidance of foreign wars. To try to make this first decade of the new century look good will be a massive undertaking that I doubt anyone who is sane will attempt to do!

Barack Obama And The Banking Industry Meeting At The White House

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On Monday, President Obama will meet with the leaders of the top banks in the nation to encourage them to start offering loans and credit to small businesses, and to deal with the home foreclosure crisis in a more forthcoming way than they have displayed this past year.

Considering that the banks were saved by federal intervention in the last months of the Bush Administration and throughout this year by the Obama Administration, I think it is certainly reasonable to expect them to change their behavior, and for the President to bring real pressure on them to do so.

If they prove resistant to such entreaties, then the President needs to suggest strong action by Congress to assess a windfall profits tax on the banking industry, a suggestion made by Suze Orman, the personal finance expert.

The American people will not tolerate much longer an arrogant attitude by the nation’s banks, who are seen as major villains in the economic crisis that led to the present Great Recession.

Barack Obama And The African American Community Disillusionment

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An interesting development is the growing criticism of President Obama by the African American community, particularly the Congressional Black Caucus.

There has been growing criticism by many African American spokesmen in and out of Congress that the President has not yet addressed the skyrocketing unemployment and foreclosure problems faced by many in their communities as a result of the Great Recession.

Many feel that Obama has gone out of his way NOT to favor or promote the interests of their community, almost as if he wants to avoid seeming to lean in the direction of people of his own heritage to avoid being considered a racist or as a “black” President.

It shows the problem Obama has, that if he were to show obvious attention to his specific heritage group, it would anger many working class whites who already are suspicious of his motives. But by avoiding such a connection, his own community is rapidly becoming disillusioned with him regarding these crucial economic issues.

Signs Of Progress! Unemployment Rate Declines In November!

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For the first time since the Great Recession began in December, 2007, the unemployment rate has declined!

Compared to the hundreds of thousands of jobs lost every month, and 7.2 million lost in the past year, the month of November shows only 11,000 jobs lost and the rate declining from 10.2 percent to 10 percent.

Professional and medical jobs are up, which again shows the power of education. But job losses in construction and manufacturing are also lessening, which is a good sign.

It is hoped that the unemployment rate peaked last month, and that the 10.8 percent unemployment rate of 1982 under the Reagan Administration will not be matched or surpassed!

This news comes just after the Jobs Summit at the White House yesterday and the President on the road today in Allentown, Pennsylvania, promoting the job agenda in public meetings.

Multi Billion Dollar Jobs Program Being Prepared By Democrats In Congress

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It is good news to hear that the Democrats on Capitol Hill are planning a multi billion dollar jobs program to deal with the severity of the Great Recession we are suffering through.

With unemployment over ten percent, and about 17 percent if one includes part time workers and those who have stopped looking and no longer get unemployment benefits, it is essential that Congress and the Obama Administration create a program, as suggested in an earlier blog entry–a CCC, PWA, WPA type jobs initiative.

This is important not only for the obvious reason, to promote more employment, but also for the long term survival of the Democratic majority in both houses of Congress and the future of the Obama Presidency.

There will be, of course, heated debate over deficit spending, and it certainly is a problem, but right now the first priority is JOBS, JOBS, JOBS!