- Amid the news that retail sales have fallen for the fourth
straight month, that housing prices continue to slump, and that another
600,000 workers were laid off in the month of January-the largest number
in one month since 1974-comes word from some experts in the business community
that things are not going to be getting better soon, and that when they
do, they will not get back to the way things were in 2006 or early 2007,
before the recession began.
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- In an interview I did for the trade publication Investment
Management Weekly on Thursday, Putnam Investments' global asset allocation
head Jeffrey Knight said that while the stimulus could "help to prevent
a Great Depression sequel," at the same time "Those who measure
prosperity against the Faustian opulence of the last 10 years may find
that stability, equilibrium and even recovery will still feel like a deep
depression."
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- Another fund manager, Ron D'Vari, co-founder and CEO
of a new fund management firm that specializes in so-called distressed
assets -the very things that have the nation's banks reeling on the edge
of failure-says the economy has fallen into "an L-shaped recession
where it's hard to say how long it will be down at the bottom." D'Vari
also told me, "We think we will have a sort of subsistence economy-not
like North Africa, but it could look like just getting by for some time
before you see the start of a real recovery."
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- Now these guys were all talking about how things look
to them assuming passage of the stimulus package. In other words, the
stimulus package is not going to turn things around. In fact, D'Vari pointedly
referred to the close to $1-trillion package as 'just a pain- killer, not
a final cure."
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- President Obama would do well to heed these kinds of
hard-nosed views. He's not likely to be hearing them right now. To date,
he has chosen for his economic team mainly retreads from the Bush and
Clinton administration-people like Larry Summers and Tim Geithner who
helped set the nation on its current disastrous economic course by promoting
globalization and the flight of jobs overseas as well as the deregulation
of Wall Street, by advocating a shift of the tax burden from the wealthy
to the working classes, by urging the gutting the safety net for those
who lose jobs or can't find them, and by advocating measures to artificially
pump up asset values, whether real estate or the stock market.
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- These are clearly not people who are going to want to
call attention to the economic and social train wreck that their own policies
have produced.
-
- Nor does Obama's latest announcement of his new Council
of Economic Advisers look much better. Headed up by Paul Volcker, the
Carter and Reagan choice for Federal Reserve Chairman, and a close associate
of the Rockefeller family and the Chase banking empire who helped bring
us the heretofore worst recession since the '30s during the early 1980s,
that panel includes Jeffrey Imelt, chairmen of mega-defense contractor
General Electric, Jim Owens, chair of Caterpillar (a firm that just sacked
20,000 employees and during it's recent contract disputes with the UAW
hired scabs and locked out employees, racking up a huge number of labor
law violations), William Donaldson, President George W. Bush's SEC chair,
who had to resign that position in disgrace in 2005 after his agency missed
the Enron and Worldcom meltdowns and collapses as well as some early hedge
fund disasters, Martin Feldstein, the head of Ronald Reagan's Council
of Economic Advisers and an adviser to Obama's opponent, John McCain,
and Austan Goolsbee, a senior economist with the Democratic Leadership
Council, a strong proponent bank deregulation and of the job-killing NAFTA
and the World Trade Organization treaties.
-
- True, the panel does include some token labor representatives
like former Mineworkers Union president Richard Trumpka of the AFL-CIO
and Anna Burger of the SEIU, but wholly absent are more progressive economists
in line with the likes of Nobel laureates Paul Krugman and Joseph Steiglitz,
or former Clinton labor secretary Robert Reich, much less left-leaning
economists like James Galbraith or Dean Baker.
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- Before Obama was inaugurated, there was much blather
in the mainstream press about his selection of conservative Democrats
and Republicans for his cabinet, as a strategy of having a "team of
rivals." But clearly, where economic policy is concerned, those "rivals"
are pretty much all on the same side of the fence. (The same can be said,
by the way, of his defense department and state department teams.)
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- What the country really needs at this point is straight
talk and creative new ideas-not returns to policies of the '90s, '80s,
'70s or perhaps even the '30s.
-
- Obama needs to hear from experts who know that the economy
of the United States is not going to rebound to anything like where it
was in the last few years, and that drastic new programs and approaches
are needed if the US is not to continue a slow slide into third world
status. And the American public needs to hear the same honest news.
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- An economic "team of rivals" is a great idea,
but to get that, Obama would have to be willing to reach over to the left
side of the spectrum, not just the right. _______________________________
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- DAVE LINDORFF is a Philadelphia-based journalist. His
latest book is "The Case for Impeachment" (St. Martin's Press,
2006 and now available in paperback). His work is available at www.thiscantbehappening.net
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