Monday, August 22, 2011

Week of 08/22/2011

The Repeat That Isn’t
– by David Matthews 2

Imagine you’re on a boat with your friends in the middle of the ocean and suddenly you realize that the engine has stalled and the boat is starting to sink.

“We’ve sprung a leak!” someone exclaims.

So everyone stops what they’re doing and they see a hole at the bottom of the boat full of water and it has waterlogged the engine. Everyone gets out buckets and they start bailing out the water. They bail and they bail and they bail, and then someone manages to start up the engine again and take the boat back to shore, and everyone cheers because they think they’ve gotten past the crisis and they’re heading home.

But then they discover that more water is coming in and the boat is starting to sink.

“We’ve sprung another leak!” someone else says.

But is that really a second leak? Or did someone forget something really important?

The word going about in the media is… “Second Recession”.

Standard & Poors dropped our debt rating, blaming Washington’s aggravated political dysfunction for not having the confidence needed to pay their debts. Everyone is making a big deal out of this. Wall Street is in an absolute panic. Markets are going up and down, up and down, up and down. Go ahead and make a sexual joke about it, because we’re all getting screwed anyway. Gold goes up, gold goes down, futures are falling faster than the sky and we have a whole new batch of Chicken Littles running about screaming “Second Recession! Second Recession! The economy is falling! The economy is falling!”

There’s just one little problem with that assessment of doom and gloom…

It’s not true. Not all of it anyway.

Oh the decline in the economy is true. It is happening.

What is not true is the belief that this is a “Second Recession” or even the threat of a “Second Recession”. Either of those things implies that America somehow got out of the first recession, and that just did not happen, despite the lies being spewed from Washington.

Let’s go back to that leaking boat analogy. You’ve been bailing and bailing and bailing out the water from the boat, someone got the boat engine started so you can head back to shore, and everyone cheers because they falsely believe that “the worst” is over with. Then you discover that you’re taking on more water and the boat is sinking.

What did you forget?

You forgot to patch up the hole at the bottom of the boat.

Now is that a “second leak”? No. It’s still the same leak and it is still the same crisis. You just never finished what needed to be done.

The same principle applies to this economy.

Let’s get brutally honest here… you cannot claim that we are in or approaching a “Second Recession” if the factors behind the “First Recession” were never really resolved. Yes we “bailed” and we “bailed” and we “bailed” out the banks and Wall Street, and the profits started to “move” again. But that does not mean that we fixed all of the problems with the recession.

Unemployment is still a major problem in America. That never went away. The only thing that happened was that over eight million Americans that lost their jobs were forsaken upon by Washington. Abandoned by the liberals, slandered by the conservatives, their gradual removal from the “official” unemployment numbers as they exhausted their benefits gave the politicians the excuse to falsely claim that the “danger had passed”, when in fact it still remains to this day. These people have lost their savings, lost their homes, lost their futures, and lost any kind of hope that things will get better for them.

But that’s not all that went unresolved. Bank failures continue unabated. Bankruptcies and foreclosures are still destroying families and whole neighborhoods, and that’s not counting the malicious damage being caused by the banks through their robo-signing scams. Not only are these not being addressed, but in the cases of out-and-out criminal activity, the banks are going to be allowed to get away with their crimes with just a pittance of a fine. And once that is a done deal, the foreclosures and bankruptcies will escalate yet again. The state and local governments are already dreading that moment, even as they are finalizing those get-out-of-jail-forever deals with the banks.

Had these problems been addressed before declaring the Great Recession “over”, then the economists and politicians could rightly claim that what we’re facing is either an actual or potential “Second Recession” or even a “double-dip recession”, but really this is the same recession covered over in political whitewash and media spin. The politicians literally wrote off over eight million Americans just so they could fly their “Mission Accomplished” banner for the economy.

The economic leak was never plugged on this ship-of-state. All the politicians did was waste their time and our money in bailing out the banks, bailing out Wall Street, and keeping things afloat just enough to stop sinking. But the leak continues, the water of misery continues to flow in, and now we’re sinking yet again. And it is the same leak, not a brand new one; so please stop insulting our intelligence and pretending that this is something that is either new or different, and just do what needed to be done in the first place to plug it.

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