The Crisis Is Over, And We Wasted It

[girl gone mad]

The Crisis Is Over, And We Wasted It
http://baselinescenario.com/2009/05/26/the-crisis-is-over-and-we-wasted-it/">The Baseline Scenario

Rahm Emanuel reportedly has a doctrine: Never let a serious crisis go to waste. His point is a good one - vested interests usually block change across a wide range of important issues in the US, and a major financial/economic crisis provides an opportunity to bypass or breakthrough those interests in order to introduce meaningful and substantial change. Emanuel listed (from the 1:40 minute mark) five priority areas for change: health care (cost control and expansion of coverage), energy (independence and alternatives), taxes (fairness and simplicity), education (fundamental changes to effectively train the workforce), and financial regulation (transparency and accountability).

The financial crisis is abating - although the economic costs continue to mount and new problems may still appear (ask California or Ukraine). At least among the people I talk with on Capitol Hill, there is a very real sense that business is returning to usual; certainly, the lobbyists are out in force, they want what they always want, and it’s hard to see many of them as seriously weakened. How much progress have we made on any of Emanuel’s priority areas or, for that matter, along any other public policy dimension that was previously stuck?

The charitable answer would be: this is still a work in progress and you cannot expect miracles overnight. True, but Rahm’s Doctrine (as Larry Summers apparently calls it) says that you should implement irreversible change while you still have the chance. Tell me if I missed something, but has there been any breakthrough of any kind? Was it wrapped up in the fiscal stimulus? Is the credit card bill a bigger blow to vested interests than we have so far recognized? Has there been some secret progress on healthcare (although than a vague and apparently deniable pledge drive)? Were the bank stress tests more subtle than meets the eye?

We discussed this issue on http://www.hbo.com/billmaher/">Bill Maher’s Overtime segment from about the 2:20 minute mark on Friday. Jon Meacham just interviewed President Obama and came away with no clear sense of where the President is really pushing to make fundamental change – although Jon and Bill nicely summarize where he is compromising (from about the 4 minute mark of Overtime).

On financial sector issues, the lobbies look stronger than ever. “You can’t recover without us” appears to be a winning slogan for big banks and their appointees. Tough financial regulation may still appear later this year, but it looks like an uphill struggle – and there is no sense that the administration even wants to break vested interests in this sphere.

[imdjh]

1. I hate to be a doom sayer, but I can't say that it looks like the crisis has passed from here

I drive around and see an incredible amount of dead retail space. I have never seen a KFC that had gone out of business other than in Juarez Mexico, but I saw one today. I'm not talking about an empty store here or there. I am talking about block after block.

I overheard a kid matter of factly say that her friend was moving. "Yeah, the house in foreclosure so they're going to have to move." She said this like she was commenting on the weather, routine weather. I don't think I used the word foreclosure prior to my 25th birthday.

[MercutioATC]

8. I live in affluent suburb and there's an increasing amount of vacant retail space.

...some for over a year now.

I live in the cheap seats and 5 years ago you couldn't touch a small fixer-upper for under $130k. There's a house 2 blocks from me that's now for sale for $85k and it's been on the market a while.

...and this is Ohio. We didn't get a real boom so we aren't getting a real crash...but things are deteriorating.

[Warpy]

14. I've seen the same thing here

We've got a few boarded up businesses, some with chain link fences to discourage vandals and squatters. Houses in my area are still selling, but they're staying on the market for a few weeks instead of two weeks.

However, the fancier parts of town where they overbuilt McMansions to satisfy a speculator's market have been hit pretty hard. Most strip malls are only half full now. Even the areas where people in the various well paid professions live, the stores are closing.

We're not anywhere near the end of the crisis. I said a few months ago I wouldn't be surprised to see the Dow slide to 4000 as profits and payouts shrink and the big boys go to commodities, made easier to fiddle by Phil Gramm. That should nicely usher in a round of inflation as wages fall and jobs disappear.

The only question is how long it will take TPTB to notice that no matter how many bailouts they get, no business will survive without customers. Until that happens, we're going to remain in a world of suck with no way out, just a steady treadmill from McJob to McJob trying to feed ourselves.

[babylonsister]

2. What's your solution? nt

[Lorien]

3. The crisis is over? Then why are foreclosures and layoffs up?

oh, yeah, because the only people Washington is worried about are the bankers. :eyes:

[dkf]

4. I agree.

I really thought we had a chance on energy independence, but now I think we botched the deal. After this we will have tons of debt and will be no closer to getting the things we needed to wean ourselves from oil.

So sad.

[MercutioATC]

5. As some have said above, you might not want to count your chickens just yet.

The worst is yet to come.

[Hawkowl]

6. 1929 is over. Welcome to 1932

The crisis is just beginning. There is too much still going terribly wrong in the economy. Look for new and exciting financial crises this upcoming football season.

[SlowDownFast]

19. More like 1873.

Panic of 1873:
http://en.wikipedia.org/wiki/Panic_of_1873

[Hawkowl]

20. Agreed

That is an EXCELLENT reference. I knew about the 1873 panic, but after reading the details, I do think the current crisis does indeed much more closely resemble the 1873 crisis than the 1930's.

[napoleon_in_rags]

7. I'm gonna add my voice to the choir here:

And say that its not even close to over. I know its been said, but I think this is one issue where the future is murky enough everybody should be speaking their minds.

[Joanne98]

9. Yep! The model has been saved and we are going into a jobless recovery

that will last forever with no money for stimulus. It was very important to spend enough on stimulus. We needed at least two trillion maybe three. But the Republicans were allowed to fuck it up even though they are in the minority. We've been had and there's some explaining to do!

My personal opinion. Winning elections doesn't work. We need a plan B!

The crisis is over for the TOP. For the banks for the RICH. But not us. We suffer forever.

[Jeep789]

10. Crisis in CA looks to be just starting

or at least the pain of it will be.

[ixion]

11. The crisis is over? Not by a long shot

The bankers, and other folks in the F.I.R.E. sector might be popping champagne corks (bought with taxpayer dollars), but the reality is that we're nowhere near the end, or even the midpoint, a.k.a. 'bottom' of this crisis.

The truth is that we've allowed the Friends of Wall St. to walk away with trillions, leaving us in worse shape than we were before, in the long run, because all they've done with the money is to shore up THEIR positions (buy up other banks, socking money away, etc) and lay waste to consumer credit cards by closing accounts and increasing fees and charges.

The titanic metaphor is very appropriate here. The bankers get the lifeboats, we get locked in the bowels of a sinking vessel.

[sendero]

12. The propaganda campaign....

.. re the economy seems to be fooling a lot of people.

The smart money is using this temporary swell in the stock market to unload their 301Ks, because there is no force in heaven or earth that is going to prevent an all out depression now.

[northernlights]

13. we're in the eye of the storm

and the storm surge comes *after* the eye, not before. In other words, the worst is yet to come.

This temporary prop up is one last chance to restructure before the real fall.

[fasttense]

17. Damn northernlights you are good.

A perfect simile of our current economic situation - a storm or hurricane where the worst of the winds come after the eye.

[SlowDownFast]

18. Exactly right. n/t

[girl gone mad]

15. I agree with most of the comments in this thread..

the bad times aren't over and there are probably more crises in our future. I think the point of the piece was that the powers that be did not seize on the opportunity that the acute phase of this meltdown presented.

[wuvuj]

21. The Repugs had no problems...

...doing just about anything they wanted to....to dig their holes and make their messes...yet the Dems are afraid to actually do much other than roll back only some of the worst excesses...most of which shouldn't even have happened in a sane and just world?

Something wrong somewhere.....I wonder where that is?

[sendero]

22. They gave away trillions of taxpayer dollars to the banks...

.. exactly how did they fail to "seize the opportunity".

If they'd have seized it any harder they would have choked it to death.

[roamer65]

16. Over? This crisis has only begun.

Next up: a good 'ol fashioned currency crisis (US dollar) and hyperinflation.

[Mark Twain Girl]

23. I don't know where the "crisis is over" folks are living, but maybe I should move there. nt

[CoffeeCat]

24. Talk about nightmare inducing...

We all agree that the crisis is over.

However, it appears that those on Capitol Hill believe that, according to this article, "...there is a very real sense that things
are returning to normal."

Ok, am I the only one who thinks that statement is downright terrifying?

The mucky mucks in charge of this country believe that all is well and returning to normal. Are these really people who
represent United States citizens? They haven't got a clue about what we're enduring and the pain that is happening
out there.

If people on Capitol Hill really believe that things are "returning to normal" then they don't even care one iota
about us. They're all too entrenched in their own power and greed--and securing their own positions and alliances--
to even understand the pain that is happening out there.

We are insects to these people. We are merely an annoyance that they lie to when campaign season rolls around. Then,
they're back to their corruption, greed, corporate deals and policies--which favor the corporations and bankrupt the
good people of this country.

We are so frickin screwed. We are not even on their minds. The power games these guys have going have sucked them
into another world. No wonder the corporations always win and the Dems never do anything about torture, illegal wiretaps,
ending illegal wars, Guantanamo, bankruptcy laws that destroy families, credit card companies that bankrupt us, etc. They're
all in on this corporate-centered government that they've engineered.

We are inconsequential to them, at this point.

[sendero]

25. They don't really believe that....

... any more than the scads of the "green shoots" pundits and prognosticators do. They are simply doing their jobs, talking up the economy.

As bad as things are, if everyone KNEW how bad they are, they would be that much worse.

[Name removed]

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[notesdev]

27. It wasn't wasted if

you held a good amount of Goldman Sachs stock.