The economy is failing and it will continue to fail probably for quite some time.
At present I am thinking there will not be a dramatic recovery. After the major carnage, after the major bombs of layoffs, foreclosures, negative growth, and deflation have hit, sometime in the distant future, there will be peace. There will not be major prosperity. We will simply stop seeing huge volumes of bad data.
We will slowly begin rebuilding and the landscape will be different. Conservatives will attempt to rebuild the old deregulated ponzi credit scheme landscape. The political battle to do this is already taking place and the entrenchments are shaping up.
Right now Obama needs to be firm and move us into a different economic territory. The Reagan-Clinton-Bush pee down economy is finished.
This recession will prove to be utterly tenacious. Republicans will point to the slowness of the "recovery" in order to gain political points in an attempt to regain power.
Bush has hidden the enormity of the economic disaster. People will slowly catch up in understanding the severity of the recession.
It will be a race to see how Obama's logical economic moves will carry in the face of outspoken political criticism and hatred - we already have Limbaugh calling for a failed Obama administration.
Unfortunately, if Republicans regain power, they will only add to the misery. The wealthy will once again start regathering all the money and wealth while the poor and middle classes will sink into massive debt and devaluation, much more so than what we are seeing now.
Reuters: Stock futures creep up; eyes on earnings
Stock index futures pointed to a flat to slightly higher open on Wall Street on Monday, as investors braced for monthly housing data and a flurry of corporate results.
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Odds are the GOP's scotched earth agenda will win out . I say this because I'm not sure yet Obama has the metal in his spine to stand up to how vicious these people are and how low they will go to get what they want even after they've lost almost all their political power. Remember, they still hold almost all the economic high ground out here and man most of the crony Corps. that have their fangs deeply into Gov't at all levels now. For Obama's team to reverse this will take more then some spending plans. He needs a cohesive vision of what he sees as the future of our society? Is it more of the same with some minor adjustments? if so then he's really just another up dated version of Bill Clinton as some people think he is. If he has a more FDRian view then we'll be seeing some up dating of these institutions and maybe some re-introduction of Rooseveltian economic controls on the markets. Summers and crew will fight this is my belief, even though it's pretty obvious that his advice and Rubin's to remove Glass-Stegael Act was an utter disaster and just opened the door for the huge housing and equity bubble that took place after this was done. I think he's going to try and do some minor adjustments here and that the scam artists will easily get around them. These next weeks are going to be interesting. I have done some reading about how the Great Depression proceeded and right now were heading into phase two of it. In 1930-32 millions lost their jobs as the economy contracted. Mellon did zip , even said it was a good thing and was much needed. Hoover took his advice. Hoover raised taxes on the middle class leaving the greatly reduced taxes on the wealthy in place and he also tightened up the fed. budget. All this plus Hawley-Smoot trade restrictions essentially destroyed the economy for the most part. By 32' thousands of banks failed and Roosevelt had to create the FDIC to get people to put their money bank in them. Many didn't anyway. The worst part of this period was that almost no safety net existed. NO SS , no unemployment Ins., no food stamps , welfare, nothing. Plus, for the most part the unemployed were blamed for their condition and blamed themselves. I believe this is still true today. No jobs out here the attitude is so what? No matter that a big part of the problem during the deflation was nobody wanted to spend any $ unless absolutely necessary because it was worth more the next week. Plus, the banks also didn't want to lend $$ . So nothing grew. The Gov't created some work with the WPA and the NRA but both were ruled un-Constitutional in 1934-35 by Hoovers SCOTUS appointees. That lead to the awful/ failed attempt by a frustrated and angry FDR to pack the courts. I fear Obama might find himself in the same place a yr or two from now. Roberts and the gang don't like this guy no matter how pleasant he is. They resent him and wish him ill. If FDR was a class traitor to these people see Obama as the class enemy period. Rudely put, they see Obama as the gutter come to power. I've had GOP friends say as much too me.
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