In June the nation added fewer jobs than necessary merely to keep up with population growth (private hiring rose by 83,000 after adding only 33,000 jobs in May). The typical workweek declined. Average earnings dropped. Home sales are down. Retail sales are down. Factory orders in May suffered their biggest tumble since March of last year.
So what are we doing about it? Less than nothing. The states are running an anti-stimulus program (raising taxes, cutting services, laying off teachers, firefighters, police and other employees) that's now bigger than the federal stimulus program. That federal stimulus is 75 percent gone anyway. And the House and Senate refuse to pass another one. (The Senate left Washington for the July 4th weekend without even extending unemployment benefits for millions of jobless Americans now running out.)
Then, Bob added, Wall Street and the other biggest global banks, meanwhile, are making piles of money betting against government debt all over the world. These were the same banks and financiers, remember, that were bailed out by government not long ago. But now they're demanding fiscal austerity, and politicians are once again doing their bidding - cutting deficits in every rich economy that should now be doing the reverse.
What he's saying is, the same financial institutions which nearly created a Second Great Depression are doing the same thing Goldman-Sachs did: Betting government efforts at Recovery will fail, and the Markets will fall. When they do, huge sums of money -- more money; always more and more -- can be made in both short-selling stocks, and the buying them when their prices drop low enough.
Now, the same financial institutions and global banks are demanding that governments follow policies of austerity -- cut spending, cut support to its citizens; reduce budget deficits. But this isn't prudence, which I could agree with -- it's like keeping medicine from the sick; it's stupid, and benefits only a small number of people. Natürlich; doch immer aber natürlich.
Those same financial institutions and global banks, saved from imploding and closing their doors by U.S. and European government intervention (though the configuration in the EU is a bit different) are creating exactly the climate for markets, and stock prices, to fall, so they can reap future profit, unfortunately by limiting government support and stimulus (jn the form of things like extending unemployment benefits) just when people -- human beings -- most need it.
And in an election year, it's advantageous for the Right to make Democrats appear to be even bigger failures than they are -- right or wrong, accepted wisdom is that a failing economy is always blamed on the Party In Power. A hard choice, to force Americans to suffer; but it's all in the cause of bringing the Republicans back into prominence, so I guess that's okay, then.
This wasn't how the Great Depression was managed. In fact, economists and financial analysts like Reich, Ritholtz and even Paul Krugman are beginning to say that, catastrophic as the Great Depression was, the fact that it was so bad guaranteed enacting a set of banking and financial reforms that limited the greed and manipulation of the Banksters and their buddies which had created the Crash.
What they're saying is, maybe it would have been worth it, to have had a second Great Depression -- just to gain control over the Big Boyz again, and achieve a few more generations of peace. I'm not sure -- but I understand the sentiment that made them say it.
The Bailout kept another Depression from occurring -- but it only pushed the debt which created it a bit further into the future. The Banksters learned nothing. And all this ain't over, in case you haven't guessed.
As Barry Ritholtz noted recently, in the Crash of September and October, 2008, "Banks were not allowed to suffer the fate that all insolvent businesses are supposed to. This was a terrible error, the greatest financial tragedy of the 21st century. That they were allowed to survive mostly intact is the result of the excess influence they have on a corruptible congress and a misguided Federal Reserve."
P.S.
Did you know that over half of all the Federal U.S. currency ever printed and placed in circulation was created since Mr. Bernanke became Cairman of the Federal Reserve? I didn't.
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