Blogs » Politcs Plus » One economy....Different view points



I can't seem to get a solid answer as to why it we're in the mess that we are in. The obvious answer is that we spent more than we took in. I'm more interested how we got here and what we can do to rectify it. I've read three books about the Wall Street Financial crisis, so I'm pretty satisfied, as to what transpired on Wall Street. I just started reading a book about the 1929 Great Depression that starts out by saying that there is a liberal and a conservative view of what caused it, and how we got out of it. That’s not what I wanted to hear... I've been reading the book for three days, but so far I haven't reached the part that gets me into the policies of the Hoover administration, just before the Great Depression. The book starts with the policies and mindset of Calvin Coolidge. I'm now reading about the mindset of the American people after WWI, during the Roaring Twenties, and the change from rural to urban dwelling communities and its affect on how Americans spent, saved, and borrowered to meet their daily needs. Things haven't changed much because during the depression; gloom and doom scenarios and hysteria ruled the day. They had different bogeymen. Back then, they mistrusted the Jews and the Catholics.

The Sunday talk shows are getting to be a joke because, if you pull the string on a politician; they will just repeat their talking points. The right wing politician will say that we need to cut spending but we should not increase revenues. On the other side; the left wing politician will say that the Bush tax cuts have been with us for 10 years and unemployment is still rising. I get more from shows like CNN's Fareed Zakaria’s" GPS " every Sunday morning, because his guest include economists like Niall Ferguson, Paul Krugman, Jeffrey Sachs, and others giving, opposing viewpoints, on not only on our economy, but Europe's and Asia's as well and how it interconnects. We are a part of the global economy.

I felt a little relieved after watching the fed Chairman Ben Bernanke, explain the state of the economy and his strategy to keep us afloat on "60 Minutes" last night. The chairman is concerned that we have lost 8.5 million jobs in the last 17 months and have only retrieved about 1 million jobs. He claimed that only 5% of those with a college education are unemployed and 10% of those with a high school education are unemployed. He was concerned about those that have been out of the job market for 6 months or more because their job skills are eroding. Bernanke said he went to Ohio quite frequently to meet with the business leaders there. The business leaders complained that they were not able to get small business loans. The business leaders did not mention “uncertainty” or tax concerns.

He was quite open in explaining his reasoning for the $600 billion plan to buy treasury securities. He emphasized that it was the Fed's own reserves they were using, they were not printing any new money, or using taxpayer money. It was to lower interest rates on long-term notes for cars and homes. He knows that his critics say that this plan will hold down interest rates and overheat the economy causing prices to rise out of control. He said that the fear of inflation was overstated but unless this economy responds; deflation will be something to worry about. The chairman told the moderator, that he could raise interest rates in 15 minutes, to control our monetary policy; if need be. Ben Bernanke does not see a double dip recession in our future because the housing market is already weak and can't get much weaker. He refused to take a stance on the tax cuts for the rich policy, but he did say we should clean up the tax code. He suggested that we cut out the loopholes and lower the tax brackets. He also said that this is not the time to start lowering deficits because our economy is already on shaky ground. It is the time to start thinking about long-term fixes like entitlement reform.

Fed Chairman Ben Bernanke, expressed regret for not seeing the financial crisis before it hit us but he said he had no control over big players like Lehmann Brothers and AIG. He wished we would had more consumer protection, before the housing crisis. He's still confident that he did the right thing because injecting $3.3 trillion, with over 21,000 transactions, to financial firms, industrial companies, and foreign banks was the right thing to do. If we would have allowed the 15 firms to collapse in a domino effect; it would have lead to 25% unemployment or more.

I didn't know that we had the largest disparity gap of rich to poor, than any other industrial country in the world.

I’m an older person so I don’t have a lot of time to wait on a happy ending..:-)..I’ve already heard the talk radio , Keynesian,suppy-side , and laissez-faire versions ,now I’m looking for the truth...You know the one without the Red-baiting,the partisan politics,scapegoating ,finger pointing,talking points but more like this " We goofed it didn't work ,let's try your way"...The world is watching.