While I recognize the past two weeks have been absorbed with other issues from Congress, I have one simple question: where is the focus on Main Street? As in, what happened to the focus on truly kick-starting the economy – with a JOBS bill?
Reading Robert Reich’s piece on TPM today, I keep wondering what specifically happened to our focus on building up the economy?
I thought I remembered that the reason we did accepted the stimulus package was to free up the credit markets to ensure that banks would go back to lending. That the Fed Reserve Bank lending window was opened to these banks so they could get access to cheap cash: what happened to the spurring of the Main Street? Robert Reich had a great line in The Sham Recovery:
Business cheerleaders naturally want to emphasize the positive. They assume the economy runs on optimism and that if average consumers think the economy is getting better, they’ll empty their wallets more readily and – presto! – the economy will get better. The cheerleaders fail to understand that regardless of how people feel, they won’t spend if they don’t have the money.
The US economy grew at a 5.9 percent annual rate in the fourth quarter of 2009. That sounds good until you realize GDP figures are badly distorted by structural changes in the economy. For example, part of the increase is due to rising health care costs. When WellPoint ratchets up premiums, that enlarges the GDP. But you’d have to be out of your mind to consider this evidence of a recovery.
Part of the perceived growth in GDP is due to rising government expenditures. But this is smoke and mirrors. The stimulus is reaching its peak and will be smaller in months to come. And a bigger federal debt eventually has to be repaid.
And with the Washington Post article from August 2009 and Robert’s own blog post on October 2009, we seem to be forgetting about the biggest bubble – the banks themselves.
As the banks continue to grow, are we not making this another tittering problem that we are ignoring? Why aren’t the banks HELPING in building up jobs? Should we be asking JP Morgan or Morgan Stanley for jobs creation instead of DC?
