Bernanke in Obamatime


Unwilling to embrace the obvious and take action on the real underpinning of the country’s enduring economic crisis —  an unemployed, underemployed and overall underpaid workforce —  President Obama went to his playbook and came up with the same razzle dazzle:  a combination of inflation fighting, distortion of data and reliance on a tired old team— this week in the form of the re-appointment of Ben Bernanke to head the Fed for five more years.   Keeping on Republican Bernanke was the play.. his reupping served to demonstrate the president’s compulsive  bi-partisanship even in the face of a GOP assault on health care reform, as it were… the same Bernanke, Greenspan protege, praised by Obama for “courage and creativity”, the nod to him jogs a memory of the president, newly elected, summoning up his own measure of  courage and creativity to bring forth Rahm Emanuel to lead the West Wing.  In sum, Bernanke is no longer Bush’s man, but Obama’s, and his retention is an indication that the West Wing has no idea how to take the US in any new direction, anywhere away from profiteering and war.

What is the same old direction?  Industrial production has plummeted  — US industry was operating at 68 per cent of capacity in June — and  inventories sold off.   In theory the only way to go is up.  But how far up and who gets to make the ride?  It’s a tick up, and while nice for headlines and the stockmarket, it means very, very little.   There are areas of strong growth, such as the assembling and operation of drone aircraft, an area of economic activity heartily embraced by Obama.   And of course, cash for clunkers, alas a one-time jolt, hardly a recipe to jump start America.  In the end people have to buy stuff.  But how?

Consumer spending, a category broader than the proverbial side of the barn, is on everyone’s lips, except perhaps for the 35 million Americans getting food assistance.  Keep in mind that about half of all consumer purchases are made by fewer than 10 per cent of American shoppers, the so-called “Yuppie” effect.  BMW has a spanking new ad campaign featuring a reporter who worked for The Daily Show.   It’s cool, I’m told.  Root for the Yuppies?  Do the president and his pollsters count on convincing Americans that we are all “in this together?”   Lectures on responsibility play well to elites and their admirers, but have little effect on supermarket shelves, school supply depots and clothing racks.   Just as the wage scheme, de-linked from real housing costs, could not be fooled in the national pyramid scheme otherwise known as the housing market, consumer spending has defined limits, penciled out by inquiring economists, few as they are.  Is it true that every one of the 30-odd members of the UC Berkeley economics faculty favored NAFTA?

Real estate?  Sure, residential buys went up in July, but almost four in ten were sales of foreclosed properties.  Bank-owned houses and condos now make up one in eight American residences.   Is that a recipe for a meaningful recovery?  Opportunity in demise equals demise in Obama’s America.  As the reality of today’s merciless unemployment sinks in, it comes as no surprise that prime loan borrowers lead the default pack… those are the people with good credit and who pay low interest now losing their homes at the fastest pace of all– 9 per cent of prime loans were in default at the end of June.  The “cure rate” for prime loans  — how often a defaulted loan is paid up and put back on track — was 6.6 per cent for July, a whopping decline from the 45 per cent averaged in 2000-06.  Free fall.   I don’t wish foreclosure on anyone; but now might be the time for prime borrowers to think about the plight of the sub-prime borrowers and the harsh judgment passed on them by, among others, the president who before Congress in February scolded the lesser off for “hoping” to have more.

Now comes the bad news.  Wages.  In the heroic struggle to keep down inflation, spearheaded by Obama’s man, Bernanke, the Fed has set as its highest priority soaking up excess funds, rather than unleashing (private) market forces to buy galloping US debt.  That would mean higher interest rates across the board and slow down business.  Analysts this week were warning of “seven lean years” as a result of over-heated stocks.   It IS going to take some time!

None of this is good news for American families, in particular as pertains their wages.  Lots of unemployment means lots of people competing for jobs.  “Companies are enjoying the cost advantages of their slimmed-down workforces,” is how Business Week put it this week, adding, “[I]t will be a long time before the job markets are strong enough to push up hourly wages.”  Alas, that is the Obama-Bernanke equation.  Lesser notions have won the Nobel Prize.

CARL GINSBURG is a tv producer and journalist based in New York. He can be reached at carlginsburg@gmail.com

CARL GINSBURG is a tv producer and journalist based in New York. He can be reached at carlginsburg@gmail.com

Weekend Edition
October 9-11, 2015
David Price – Roberto J. González
The Use and Abuse of Culture (and Children): The Human Terrain System’s Rationalization of Pedophilia in Afghanistan
Mike Whitney
Putin’s “Endgame” in Syria
Jason Hribal
The Tilikum Effect and the Downfall of SeaWorld
Paul Street
Hope in Abandonment: Cuba, Detroit, and Earth-Scientific Socialism
Gary Leupp
The Six Most Disastrous Interventions of the 21st Century
Andrew Levine
In Syria, Obama is Playing a Losing Game
Louis Proyect
The End of Academic Freedom in America: the Case of Steven Salaita
Rob Urie
Democrats, Neoliberalism and the TPP
Ismael Hossein-Zadeh
The Bully Recalibrates: U.S. Signals Policy Shift in Syria
Brian Cloughley
Hospital Slaughter and the US/NATO Propaganda Machine
John Walsh
For Vietnam: Artemisinin From China, Agent Orange From America
John Wight
No Moral High Ground for the West on Syria
Robert Fantina
Canadian Universities vs. Israeli Apartheid
Conn Hallinan
Portugal: Europe’s Left Batting 1000
John Feffer
Mouths Wide Shut: Obama’s War on Whistleblowers
Paul Craig Roberts
The Impulsiveness of US Power
Ron Jacobs
The Murderer as American Hero
Alex Nunns
“A Movement Looking for a Home”: the Meaning of Jeremy Corbyn
Philippe Marlière
Class Struggle at Air France
Binoy Kampmark
Waiting in Vain for Moderation: Syria, Russia and Washington’s Problem
Paul Edwards
Empire of Disaster
Xanthe Hall
Nuclear Madness: NATO’s WMD ‘Sharing’ Must End
Margaret Knapke
These Salvadoran Women Went to Prison for Suffering Miscarriages
Uri Avnery
Abbas: the Leader Without Glory
Halima Hatimy
#BlackLivesMatter: Black Liberation or Black Liberal Distraction?
Michael Brenner
Kissinger Revisited
Cesar Chelala
The Perverse Rise of Killer Robots
Halyna Mokrushyna
On Ukraine’s ‘Incorrect’ Past
Jason Cone
Even Wars Have Rules: a Fact Sheet on the Bombing of Kunduz Hospital
Walter Brasch
Mass Murders are Good for Business
William Hadfield
Sophistry Rising: the Refugee Debate in Germany
Christopher Brauchli
Why the NRA Profits From Mass Shootings
Hadi Kobaysi
How The US Uses (Takfiri) Extremists
Pete Dolack
There is Still Time to Defeat the Trans-Pacific Partnership
Marc Norton
The Black Panthers: Vanguard of the Revolution
Andre Vltchek
Stop Millions of Western Immigrants!
David Rosen
If Donald Dump Was President
Dave Lindorff
America’s Latest War Crime
Ann Garrison
Sankarist Spirit Resurges in Burkina Faso
Franklin Lamb
Official Investigation Needed After Afghan Hospital Bombing
Linn Washington Jr.
Wrongs In Wine-Land
Ronald Bleier
Am I Drinking Enough Water? Sneezing’s A Clue
Charles R. Larson
Prelude to the Spanish Civil War: Eduard Mendoza’s “An Englishman in Madrid”
David Yearsley
Papal Pop and Circumstance
October 08, 2015
Michael Horton
Why is the US Aiding and Enabling Saudi Arabia’s Genocidal War in Yemen?