“Crisis” is in the eye of the beholder. The Obama administration thinks in terms of years. Others are on a shorter leash. While millions are being marginalized right now, our president, and a supportive press, prepares us for consumer credit relief in the form of enhanced notice … in a law to be decreed a year from now, in the summer of 2010; he proposes new regulations for stockholder input on executive compensation (don’t the big stockholders already elect the board which pays the managers?); and his economists predict a return to positive economic growth in Q3. Overall, Treasury Secretary Geithner sees “important signs of recovery.” Abby Joseph Cohen of Goldman Sachs puts it this way: “We do see profit margins picking up.” Hang in there everybody. And save.
You wouldn’t know from these sources –in particular the millionaires that make up Obama’s West Wing as well as the wealthy reporters who chronicle it – that multitudes of Americans are getting slammed hard and it’s getting worse everyday, every single day. Crisis is everywhere. Wages and salaries have fallen at an annual rate of 3.1 per cent. Half of that decline is attributed to plummeting manufacturing, where most jobs are unlikely to return soon, if ever. Economist Mark Zandi believes that the US will have negative wage growth this year. According to Money magazine, 30 per cent of workers employed now, or about 42 million people, are independent contractors, part-timers, temporary staffers or self-employed—a contingent workforce expected to grow to 40 per cent in ten years. Crisis as a way of life. “There’s no use trying to avoid the inevitable,” says Money. Obama would say avoiding the inevitable is irresponsible.
For some, joblessness is the antithesis of crisis. It is opportunity. People without work equates to competition for employment which means low wages which means enhanced profits. In case you haven’t noticed, the stock market is up. Bond sales by businesses were $570 billion in Q1, a record…. Net financial investment in Q1 was $340 billion, also a record. Go Go.
Pension funds are getting over their crisis, gearing up to invest more. Calpers wants a return of 7.75 per cent on its money and, to achieve that yield, the huge public pension fund is upping its stake in private equity. Of course, private equity makes money by streamlining, raising profits and selling, ideally within a five-year period. As we all know, streamlining is a euphemism for cutting jobs. It’s called “nuanced investing” and in a story on the latest innovation in pocket stuffing, “Jobless Recovery Would Call for Nuanced Investing,” the Wall Street Journal (July 13) quotes economist Peter Gutmann saying: “Double-digit unemployment could be with us for some time.” Former FED vice chair, Alan Binder, wasn’t kidding when he said last week: “Jobs… will take longer, maybe much longer, to revive.” Revive? Isn’t that best left for the ER? On second thoughts…
When President Obama came to office and brought to bear all the judgment, education and experience that is his gift, that is, gave away the store, it was on the basis of a business model: to make money on your crisis, making it worse for you— all the time extolling the need for patience and practicality. A sycophantic press has been completely in sync, this week equating crisis with text messaging-at-the-wheel, that is when not calling upon the Administration to do what it knows best: protect landlordism (in this instance, the Pakistani variety). There is absolutely no doubt that soon after the conclusion of his presidency, Mr. Obama, like Bill Clinton, will have a hundred million bucks in the bank as a result of books, lectures and related appearances on the subject of responsibility. That’s what’s called the spoils of “today’s winner-take-all economy,” a quote from Audacity of Hope, here taken way out of context, I suppose. “Fill up the old coffers,” is the way George Bush put it, in his twisted but somehow unambiguous way.
Back to your crisis: The banks are now aggressively pressing people who are delinquent on loans and mortgages in order to extract what they can, charge usurious interest and fees (thank you, Joe Biden), hound you — to capitalize on your crisis. That is the business model Barack Obama invested in for all of us. Small wonder JP Morgan CEO James Dimon invited White House Chief of Staff Rahm Emanuel to visit with his board of directors.
Had President Obama taken our trillions and set up what William Greider calls for in the current Nation magazine, a development fund for long-term capital investment, or what Mike Davis has described, a national debt bank to relieve excessive consumer and mortgage debt, your government would be addressing your crisis. But of course there’s plenty of time for that.
CARL GINSBURG is a tv producer and journalist based in New York. He can be reached at email@example.com