Inside the Crisis

Inside the Crisis, Larry Summers and the White House economic team
The New Yorker
October, 7, 2009
by Ryan Lizza

Here is the beginning excerpt. Here is the entire article --> http://www.newyorker.com/reporting/2009/10/12/091012fa_fact_lizza?printable=true

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In early August, Lawrence H. Summers, President Barack Obama’s top economic adviser, accompanied Vice-President Joseph Biden aboard Air Force Two on a trip to Detroit. Michigan has a fifteen-per-cent unemployment rate, the highest in America, and Detroit has become virtually a ward of the federal government: the United States now owns ten per cent of Chrysler and sixty-one per cent of General Motors. The purpose of Biden’s trip was to announce an additional $2.4 billion in federal grants, to help jump-start the electric-car industry; more than a billion will go to battery and auto manufacturers in Michigan.
Summers, who is the director of the National Economic Council, the White House office that coördinates all economic policy in the Obama Administration, has rarely travelled outside Washington this year, and was in Detroit on a fact-finding mission. After nearly a year of debate about how much federal intervention was needed to beat back the recession—a debate that started during the end of the Presidential campaign—he was somewhat optimistic. The principal measures that Obama had taken—implementing the stimulus package, rescuing the banks, restructuring the automakers—had begun to stabilize the economy. In a speech three weeks earlier, Summers had put it this way: “We were at the brink of catastrophe at the beginning of the year, but we have walked some substantial distance back from the abyss.� It seemed like a good moment to check in on the government’s investments in Michigan.
Michiganders were thankful for the largesse. At NextEnergy, a nonprofit incubator for alternative-energy technology, an audience of local officials and business leaders waited eagerly...

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Oh yeah, everything is just hunky dory now. What recession?

People are eating their assets. There is no new job creation, the unemployment numbers are rising, companies are still closing. Get on the mailing list for a few of the regional industrial auction houses. One could heat their home with the fliers.

The government is pumping borrowed billions into an unsustainable economic model. Funding such failed ideologies as electric cars and chasing ghosts like the global warming scam. They are clutching at straws, don't be misled when they actually retain a few.

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Originally Posted by Sstashmoo

Oh yeah, everything is just hunky dory now. What recession?

People are eating their assets. There is no new job creation, the unemployment numbers are rising, companies are still closing. Get on the mailing list for a few of the regional industrial auction houses. One could heat their home with the fliers.

The government is pumping borrowed billions into an unsustainable economic model. Funding such failed ideologies as electric cars and chasing ghosts like the global warming scam. They are clutching at straws, don't be misled when they actually retain a few.

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Do you not agree that while the economy still has a way to go to improve, it is in a much more stable condition than it was 12 months ago?

What's your solution?

Quote: "What's your solution?"

Arrest all "lobbyists" and convict them for bribing our public officials. Representatives elected by the people should be making decisions based on what is best for those that elected them, not a handful of opportunists and third party individuals, or foreign governments.

Ditch the global economy lie

Fix trade. Only trade like any trader would, where it is in our own best interest. Continually entering into a losing arrangement, is not trade, it is called stupidity. And it is purposed intent.

Impose tariffs on all imported goods. Only trade with countries that treat us as equal trade partners. Even our good friends to the north are screwing us on trade, penalizing their citizens with stiff duties and taxes, not to mention general harassment [[Import brokers etc.) for buying US made goods.

The US government via NAFTA and all the other insane "trade" agreements is bending over our manufacturing sector and doing us all dry. "Trade" really means we are trading our way of life for theirs.

Obama and his constituency feel things are improving, one word question, Other than China and a few others, where? Sure as hell not here in the US.

The analogy used was "a few steps back from the abyss", I have a better one: "we are in slight remission".

SStashmoo:

I certainly believe that your post makes more sense than anything heard lately from either republicans or democrats.

Elimination of bribes from deep pocketed corporations and special interests, along with fair trade policies would go a long way toward getting us back on our feet.

It isn't going to happen soon, though.

Do people realize that once somebody stops demonstrating active job hunting, they fall off of the list of unemployed?? What is the real unemployment rate with this correction? Are we at, or beyond the rates from the 30s?

We were at 15% by some accounts last fall, now, who knows, maybe 20% or more.

I was shocked to see Detroit had 28+% unemployment.

So is this on par with the Great Depression?....yet?

Getting there, just give it a little more time.

When CIT declares bankruptcy, that will send shockwaves though the system, should happen soon.

Commercial paper should hit the skids by January, GM and Chrysler should be running on fumes by spring.

Then the next wave of residential foreclosures followed by spiking unemployment.

We'll be forced out of Afghanistan by lack of money to continue, and Iraq just because it's a good idea.

Goldman Sachs will continue to rake in billions, now that they are a foreign investment house/bank with insurance on loans it made to CIT, and will be first to get paid back in a bankruptcy, before the taxpayers, of course.

Yeah, we're far from over, because the hard decisions won't be made.

We won't get a workable public option on health care, so we will not compete as a labor force with India and China ever again. We are being consigned to our fate by our dear leaders who would rather insure their employment by doing the bidding of their corporate masters.

Billions of what? Worthless dollars resulting from spending/monetizing the debt and hyperinflation?

Why would a Chinese company buy Hummer when there is a shrinking market for the product? Because they would rather have a near worthless car company than a pile of soon to be completely worthless USDollars. It isn't just Hummer either, they are offloading dollars as fast as they can all over the place.

Want to be scared? Think about that for a moment.