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Several years ago an old timer told me that “If my job is safe and a job is available for my deadbeat son in law; the economy must be good." For some insane reason, that stuck with me and in today's climate it's starting to make sense. A little over 675 days ago we were on the brink of economic disaster, today the stock market is hovering around 10,000 or so but about 15 million people are still unemployed and about half of those have been unemployed for over six months. I can't imagine what is going through the mind of the Obama Financial team ,when they see that manufacturing is up, private sector jobs have gone up for the last six months, corporate earnings are up, Wall Street is reporting big profits, and inflation is almost nonexistent. The fed chairman said that interest rates were already at near zero, so it's up to the lenders to start lending money to creditworthy businesses. He's pretty much washed his hands of the situation.

Even good economic data does not tell the full story because foreclosures and bank closing are exceeding last year's levels; this is putting a damper on the good economic news. The $787 billion stimulus (actually $862 billion) will soon run down and the states are carrying out budget cuts and layoffs; there's still no appetite for a second stimulus. To quote Alan Greenspan" we have hit an invisible wall." No surprise, I agree with what the Obama Administration,along with the Bush bailouts, did to prevent us from going into a depression but I have patience because I have always thought it would be a long and slow process. I know when two-third of respondents oppose a second stimulus and 53% say the country would've been better off without the first one; it is highly unlikely will get a second stimulus.

I won't even try to argue with those that think it's all about the government reducing deficits by cutting back on expenditures; preferably those programs they don't like. In today's climate, those moves might restore a false sense of confidence but some might say restore investment. The right is using the same old argument that government spending will drive up interest rates; thereby hurting the free market. If we were at 5% unemployment, I would agree but you can't use the same old argument in every scenario. Interest rates are low right now; an opportune time for the government to borrow. I read that payroll tax revenues are only paying for Social Security, Medicare and Medicaid; we have to borrow to fund the rest. When we start seeing unemployment come down;that will be time to rid ourselves of reckless spending of the past and start putting in some responsible fiscal policies. To do that, we must reconsider our foreign policy,reform the entitlements,put ourselves on a path to clean energy, and overhaul our educational system. We can no longer be the policeman of the world, stay addicted to oil, and we need to educate the next innovators or think seriously about importing scientists from other nations.

Last but not least ,the minority Republican Party, now thinks they have found their groove. I saw where rising republican star, Marco Rubio, revealed his 12 point plan. It's basically the same old George W. Bush economic policy of keeping the tax cuts for the rich, cutting capital gains and dividends rates, reducing the corporate tax rates and remaining in Afghanistan and Iraq. House minority leader John Boehner said he would repeal the recently passed finance reform legislation. New York republican house member, Peter King, said the party shouldn't reveal their strategy because it might become a campaign issue. That pretty much sums up the Republican Party. If the Republican Party takes over the house and senate or gets a ruling majority in either chamber, I will be waiting for the critics to come forward. It can happen but I didn't see much from the deficit hawks until January 21, 2009.

Although lobbyists poured in $600 million to weaken the financial reform bill ; it was not a total success for them. The legislators made sure that shareholders and creditors would take the hit, if a financial institution failed-and not the taxpayers. It also put in a good consumer protection package but it was unable to eliminate all the risk taking; nor did it break up any banks that were too big to fail.

That's about all you can do when only three republican senators will vote for its passage.

I still find it hard to believe that Goldman Sachs got away with a $550 million fine for all those shenanigans they pulled.

*July 26 ,2010 edition of Time magazine****

http://www.nytimes.com/2010/07/16/opinion/16fri1.html?hp