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telling it like it is

Posted by david52 z5CO (My Page) on
Thu, Aug 2, 12 at 10:46

The Great Depression that Federal Reserve Chairman Ben Bernanke claims to have averted has been part of the background radiation of our economy since at least 2008.

It's just that like radiation - it's invisible.

We've called it the recovery, the jobless recovery, the slogging recovery and more recently the fading recovery. We've measured modest growth in our nation's gross domestic product to record that our so-called Great Recession ended in June 2009. And now we are saying that if this disappointing growth suddenly disappears, as currently feared, we will be in a new recession.
There is nothing more depressing than hearing about a new recession when you haven't fully recovered from the last one. I take heart in suspecting that in a still-distant future, historians will look back with clarity and call this whole rotten period a depression.

The precise definition of a depression, of course, remains as debatable as anything else in the field of economics. By some definitions, it is a long-term slump in economic activity, often characterized by unusually high unemployment, a banking crisis, a sovereign-debt crisis, surprising bankruptcies and other horrible symptoms we can find in the headlines almost every day.

It is easy to avoid seeing all of these events as constituting a depression if you somehow have kept your livelihood intact all this time. But it's important to remember that not everyone has to stand in a bread line during a depression.

Nearly one out of seven Americans receives food stamps, according to the U.S. Department of Agriculture. That's more than 44 million people. If they all stood in a line and someone photographed them using black-and-white film, they easily could be mistaken for people from the 1930s. Instead, they go to a grocery store and spend their credits like money. There isn't even a social stigma to make them stand out as any more glum or destitute than anybody else.

Last week, the Associated Press reported that America's official poverty rate likely has hit levels not seen since the 1960s. Surveying several economists and academicians, the wire service predicted the poverty rate would come in as high as 15.7 percent when the Census Bureau releases it in September. That would wipe out all the gains of President Lyndon Johnson's War on Poverty.

Poverty is another word for joblessness, and our economy hasn't been generating enough decent-paying jobs for many years. Globalization, technology, outsourcing, immigration and the schemes of financiers have taken their toll. No one is certain when jobs will come back, and many of the jobs that remain don't pay anywhere near what, say, your average failing CEO gets paid.

"Half the jobs in the nation pay less than $34,000 a year," noted Peter Edelman, author of "So Rich, So Poor: Why It's So Hard to End Poverty in America" in a recent New York Times piece. "We've been drowning in a flood of low-wage jobs for the last 40 years."

If you don't want to call this epidemic of rising poverty an invisible depression, call it the golden age of unemployment. Today's laid-off workers can collect unemployment benefits for up to 99 weeks, staying off the public's radar as an economic distress signal. Over that time, they often lose confidence, their skills degrade, and they can slip into the ranks of America's chronically unemployed - where they no longer will be counted in the nation's official unemployment rate, now at 8.2 percent.

What are the societal effects of millions of people sidelined for so many years on end? College graduates, looking to launch careers, end up working at Starbucks. Middle-aged professionals apply to temp agencies for gigs they once considered beneath themselves. The nearly retired simply retire early. Even if we could return to full employment tomorrow, the drag of all these idled lives could affect generations.

As the economy reels, the national debt approaches $16 trillion, and we hear fears of Congress jumping off a fiscal cliff by year-end. Many states and local governments are struggling with massive deficits, too. Three California cities have filed bankruptcies.

U.S. companies are warning of slower growth amid Europe's meltdown, yet the Dow Jones industrial average has crossed the 13,000 mark, and some observers are predicting new highs for the index soon.

The rising stock market is as counterintuitive as interest rates falling to new lows after the U.S. lost its triple-A debt rating last year. It isn't that investors aren't wary. It's just that every place else makes them more wary. This isn't the definition of a recovery.

The real estate market also seems to be doing a good job of masking the true condition of the economy. Overwhelmed banks are slow to foreclose on homes, sometimes letting borrowers live in their homes without payments for more than a year. The result is a shadow inventory of homes nobody can count accurately. On the commercial real estate side, banks and investment trusts are slow to take markdowns, too. The shiny, new stuff may still sell. But the old stuff sports "For Lease" signs.

The cure for our battered economy has been to allow our disasters to occur more slowly through taxpayer bailouts and extraordinary interventions from the Fed. So far, this strategy has worked. We have averted a sudden crash in favor of a depressingly slower one. At least if you don't look, you may not have to see it.

Here is a link that might be useful: link


Follow-Up Postings:

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RE: telling it like it is

Where is our resident chastiser to condemn the OP for not using quotes and for copyright violations?

Cat got the tongue, eh?

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Thanks for the link, David.

Depressing, but a good article.


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RE: telling it like it is

  • Posted by kwoods Cold z7 Long Is (My Page) on
    Thu, Aug 2, 12 at 11:51

Sooooo.... sounds like these "fixes" buy us time to address the larger issues that are structural and systemic.... but, since the "fixes" ameliorate the symptoms the underlying disease never gets addressed.

What is the solution? A four year election cycle infused with corporate money certainly doesn't help seriousness of purpose. Are we doomed to eventual revolution?


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RE: telling it like it is

Where is our resident chastiser to condemn the OP for not using quotes and for copyright violations?

Cat got the tongue, eh?

But, I thought you never do the attacking, demi? You only respond to attacks on you, you say all the time. Perhaps I missed it? Was there an attack on you in David's post?

Thanks, David. A good reminder to those of us that still have jobs. It is easy to forget.


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RE: telling it like it is

David provided the link to the original article.

What is the solution? A four year election cycle infused with corporate money certainly doesn't help seriousness of purpose.

Perhaps more OWS-type protests will make a third-party, or an insurgent faction of the Democratic Party, a viable option. A long shot, to be sure.


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RE: telling it like it is

Posted by jillinnj (My Page) on
Thu, Aug 2, 12 at 12:54

Where is our resident chastiser to condemn the OP for not using quotes and for copyright violations?

Cat got the tongue, eh?

But, I thought you never do the attacking, demi? You only respond to attacks on you, you say all the time. Perhaps I missed it? Was there an attack on you in David's post?

Thanks, David. A good reminder to those of us that still have jobs. It is easy to forget.

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That comment was not directed at David and certainly not you, jillinnj.

That post was directed at our resident chastiser for quotes and copyrights.

Let me know when you actually have something to say about a topic instead of following me around on this forum to taunt me and I might talk with you.


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RE: telling it like it is

Who is the resident chastiser? Why don't you say what you mean instead of acting coy?


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RE: telling it like it is

I didn't say it was directed at me. I was pointing out you were doing what you constantly accuse others of doing. Why not just admit that? Oh right because it would mean admitting you are not the perfect person you'd like us to believe you are. Got it. Loud and clear.

Oh and by the way I did say something about the OP as I'm sure you realize since you cut and pasted it into your post.

You think I follow you around? That's funny!


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Re: telling it like it is

Back to the topic and away from personal comments... Dave, I think part of the reason why the sorta- semi- almost- recovery has been so sluggish and slow, is that corporations are sitting back with large cash on hand, waiting to see if the recovery moves forward and up -- or drops, again.

Atlantic had a short article on this on July 18, The $5 Trillion Stash: U.S. Corporations' Money Hoard Is Bigger Than the GDP of Germany and Forbes had one on July 10, Why U.S. Companies Are Not Spending Money. There's plenty more reports from prominent media about this subject.

It will be interesting to see what impact, if any, the conclusion of the current U.S. Presidential election has on these business policies. Regardless of who wins.

All the best,
-Patrick


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RE: telling it like it is

Poverty is another word for joblessness, and our economy hasn't been generating enough decent-paying jobs for many years. Globalization, technology, outsourcing, immigration and the schemes of financiers have taken their toll. No one is certain when jobs will come back, and many of the jobs that remain don't pay anywhere near what, say, your average failing CEO gets paid.
"Half the jobs in the nation pay less than $34,000 a year," noted Peter Edelman, author of "So Rich, So Poor: Why It's So Hard to End Poverty in America" in a recent New York Times piece. "We've been drowning in a flood of low-wage jobs for the last 40 years."

The median wage for decades has remained stagnant and all the gains have gone to the top. If we don't reverse the gap between income and wealth, we will be dead in the water. The ratio of profits to wages is the highest it has ever been. Without the gains flowing to workers, consumer demand is nothing but a debt ridden bubble and without a middle class the goose will have eaten the golden egg.

Now is the time for government to do big things and be the spender of last resort to get us moving again!


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RE: telling it like it is

Posted by jerzeegirl 9 (My Page) on
Thu, Aug 2, 12 at 18:26

Who is the resident chastiser? Why don't you say what you mean instead of acting coy?

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Oh, come now, JZ, she who shall not be named is far more coy than I.


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RE: telling it like it is

demi, you are one of the most insidious troublemakers I've ever run across. This is a serious topic and all you can do, already at the outset, is to sideline it with petty and irritating remarks. Do you enjoy the climate of hostility that you help to create? Does it make you happy to needle people? Obviously the answer is yes.


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RE: telling it like it is

Oh, come now, JZ, she who shall not be named is far more coy than I.

Why did you say what you did? It was off topic and you were trying to insult someone right off the bat before you even replied to the topic. Sometimes I wonder if people are being too harsh with you and then you post something like you just did and I have to shake my head. I really believe you have a huge need for attention and really can't help yourself.


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RE: telling it like it is

Demi, please.


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RE: telling it like it is

Corporate America is holding 5 trillion, waiting for the demand to pick up.

Middle class America, or whats left of it, just got walloped upside the head, still haven't recovered salaries, pensions, IRA's, employment or job security, and are quite rightly paying down debt and holding onto their pennies.

How to stop that logjam is going to require a nudge here, a penalty there, some spending here, etc. But its pretty clear that the worst thing we can do is further cut demand by 'austerity' programs.


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RE: telling it like it is

It wasn't an insult.

It was pointing out the truth--that whenever conservative posters fail to cross all the "t"s and dot all of the "i"s in quoting a source they are accused of copyright violations and violating GW's rules.

But when certain other do it, they get a pass.

No more, no less.

Hypocrisy at it's worst.

Y'all can dish it out but not take it, eh?

And it wasn't an insult, it was a very VALID observation.


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RE: telling it like it is

Moving along, on the original thread topic...

I wonder if the general economic difficulties will encourage more people to food gardening? Growing food, preserving it, saving seeds and exchanging them?

Growing up, I heard many stories about people planting Victory Gardens and the like -- in Canada, the UK, and the U.S. It seemed to stimulate people to continue food gardening into the 1950s, even the early 1960s.

It would be a positive side benefit if hard times encouraged people to low cost (and thus low chemical input) home gardening. Greater respect for and knowledge of the soil, all those good things.

And composting, of course. :) "IALBTC (It All Leeds Back To Compost)" -- Professor Dirt

All the best,
-Patrick
(who misses putting his hands in the dirt)


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RE: telling it like it is

Moving along, on the original thread topic...

I wonder if the general economic difficulties will encourage more people to food gardening? Growing food, preserving it, saving seeds and exchanging them?

Growing up, I heard many stories about people planting Victory Gardens and the like -- in Canada, the UK, and the U.S. It seemed to stimulate people to continue food gardening into the 1950s, even the early 1960s.

It would be a positive side benefit if hard times encouraged people to low cost (and thus low chemical input) home gardening. Greater respect for and knowledge of the soil, all those good things.

And composting, of course. :) "IALBTC (It All Leeds Back To Compost)" -- Professor Dirt

All the best,
-Patrick
(who misses putting his hands in the dirt)


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RE: telling it like it is

Moving along, on the original thread topic...

I wonder if the general economic difficulties will encourage more people to food gardening? Growing food, preserving it, saving seeds and exchanging them?

Growing up, I heard many stories about people planting Victory Gardens and the like -- in Canada, the UK, and the U.S. It seemed to stimulate people to continue food gardening into the 1950s, even the early 1960s.

It would be a positive side benefit if hard times encouraged people to low cost (and thus low chemical input) home gardening. Greater respect for and knowledge of the soil, all those good things.

And composting, of course. :) "IALBTC (It All Leeds Back To Compost)" -- Professor Dirt

All the best,
-Patrick
(who misses putting his hands in the dirt)


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RE: telling it like it is

AAAK! A TRIPLE post!!! Unicorns, they're everywhere!!1!!!

All the best,
-Patrick

p.s. Okay, this time it was me. Not GardenWeb. I just really, really, really needed to say it three times. It was the composting part, it made me do it. :)


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RE: telling it like it is

Great thread David. I've worried about this wage stagnation for years. Too many of those who do have jobs don't have much to look forward to. Our parents knew that if you worked hard you would move ahead - these days for people in their 30's it seems to me that they must work hard to simply maintain the basics.


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RE: telling it like it is

Even in my darkest moments, I am not as depressed about the future as Al Lewis seems to be in that article.

Of course much of what he says has some validity but heaping up the worst generalizations concerning globalization, technology, outsourcing, immigration and the real estate and stock market is just too much to take in one sitting.

And why nothing positive....why no good news, no positive assessments of how we have made progress in some areas and will make progress in others?

Let me just counter some of the bad news with some hope for the future, even though I may not be around to see it..
For a long while now, at least since Gore ran against dubya, Democratic leaders have been clamoring for government to initiate and to encourage a switch to a greener economy. As has been pointed out, that could, in itself, create a lot of jobs in new companies and industries. so what did Republicans do? They called for Detroit to go bankrupt, dissed electric vehicles, mocked government investment in Solar energy and sought to make an example our of Solyndra for a selfish partisan advantage.

Democratic lawmakers fashioned at least a small part of the Economic stimulus package to focus on energy conservation, energy efficiency and things like solar energy panels for homes and battery research for electric cars. Republicans responded with arrogance, accusing Democrats and Obama of being foolish for not focusing on oil and coal until those sources run out or the effect of burning them turns the Earth itself into a burned out cinder.

Meanwhile Germany is making money by doing just what Al Gore thought we should have begun 12 years ago....focusing on wind and solar and energy conservation and creating new manufacturing and tech companies that focus on those areas. Gore was really stupid though, right Republicans?

I think there is much to feel good about with the restructuring of our economy into the digital age, although the transition will continue to take its toll.

Where some might focus on lost jobs at Best Buy or some other brick and mortar retailer, I see more jobs at Amazon and at UPS, FedEx and the Post Office for delivering things we purchase on the net. Imagine how much fuel is saved from millions of shopping trips made unnecessary by the internet.

I see an imminent breathrough in electric battery technology and in electric cars that could create a sustained demand to manufacture million of them while we phase out the gasoline combustion engine.

Staying positive, I believe that shared information and research will expedite new technologies and advancements in the field of Medicine., including cures for some of what ails our older generations.

We are getting smarter as a society, and that is going to be what saves us at the end of the day.


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RE: telling it like it is

See how easy it is to have a decent, productive debate when everyone ignores that troll.


Poverty is another word for joblessness, and our economy hasn't been generating enough decent-paying jobs for many years. Globalization, technology, outsourcing, immigration and the schemes of financiers have taken their toll. No one is certain when jobs will come back, and many of the jobs that remain don't pay anywhere near what, say, your average failing CEO gets paid.

There's decades of the suck-up-trickle-down racket for you. It is also (and definitely) a matter of resources, or rather, lack thereof, and the absence of a social security net. How people are supposed to build up resources when what they can earn is barely enough to survive on is a good question. Especially when they're one pay-check away from disaster.


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RE: telling it like it is

Facts are facts.

Name calling does not change hypocrisy.

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It will be indeed interesting to see how the business community reacts to the presidential election results.

Something tells me that if they don't turn loose of that cash with Obama at the helm now, they're not going to be in a hurry to do it the day after the election if Obama is reelected.

So hunker down and be prepared for more of what we've had.

If Romney is elected, it's certainly no certainty that he will succeed. I do believe that if he is, it will be a good sign for our economy, however, as long as he moves in the right direction.

This situation makes it ever more important that people make the right life decisions and not self indulgent ones.


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RE: telling it like it is

You have already been told you were wrong, and to spare us your issues.

Run along now.


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RE: telling it like it is

You don't call the shots.

I was absolutely right.


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RE: ...telling it like it is

Now, back to the subject.

Meanwhile Germany is making money by doing just what Al Gore thought we should have begun 12 years ago....focusing on wind and solar and energy conservation and creating new manufacturing and tech companies that focus on those areas. Gore was really stupid though, right Republicans?

Adding the fact that power outages, that are taking days to be fixed, are unheard of in Germany.

As a sidenote, India's grid relies on coalplants. There's a lesson in there, too.

Green energy is a job machine, not a shareholder profit-machine. That, and the energy monopoly are the main reasons why the Republicans keep fighting it tooth and nail.


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RE: telling it like it is

Rupees = 1/Scruples*

*sometimes


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RE: telling it like it is

LOL.

More often than not, it's zero Scruples.


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RE: telling it like it is

It's very visible, David... the economic collapse that's happening in slow motion. And it looks worse with a drought laid over its midsection that will surely bankrupt a lot of farmers... at least, those without crop coverage. And now, with food prices set to rise, we can add another log to the fire that is the burning of America...


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RE: telling it like it is

How to stop that logjam is going to require a nudge here, a penalty there, some spending here, etc. But its pretty clear that the worst thing we can do is further cut demand by 'austerity' programs.

As the Europeans are learning.

One of Patrick's referenced articles, the Atlantic piece, suggests as one solution "enforcing tax penalties on companies that hold excessive cash reserves" -- a tax we've apparently had in the US since the '20's - I didn't know this. It's interesting; you wouldn't think this could be practicable? Certainly not in the current climate of corporations'/conservatives' nauseating whininess.

[As an addendum to Heri's cheerful optimism, I am continually irritated at American media's representation of what it portrays as impending economic collapse in Europe. Not so. Have you been to Germany lately? I've never seen such a general high standard of living. You could eat lunch off a German sidewalk.]


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RE: telling it like it is

The big corn and soya growers will make more than they would have without the drought. The ranchers are getting hardest hit because there is no crop insurance on grazing.


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We have a minimum wage ($7.25/hr) that is not a living wage; a labor surplus due to automation, higher productivity, and offshoring of jobs; and an education system that is not preparing kids for the jobs that are available. Meanwhile, we have a rigged casino Wall Street that produces nothing tangible for the country, that extracts the little wealth people are trying to build for retirement and funnels it to a few winners at the top who then hide it offshore to avoid taxes which magnifies the deficit and gives them the ammunition to call for cuts in the social safety net. Its a screwed up system that is not sustainable economically and the people who could fix it are in the pockets of those benefiting from these inequities.


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RE: telling it like it is

That's it in a nutshell, KT. A very contrived nutshell.

Unfortunately, a country is not a business and can't be run like one, capitalism without ethics doesn't work, and austerity is not a fix for what ails this nation.

Also unfortunate is the fact that we can't force ethical behavior.


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RE: telling it like it is

  • Posted by kwoods Cold z7 Long Is (My Page) on
    Fri, Aug 3, 12 at 9:38

I also believe many of the problems are systemic. I think one of the ways we can begin to heal is overhauling the way we elect our "leaders". Citizen's United was just one more thing that compounded what was already a huge problem and sent us down the wrong path.

That's also one of the reasons, while I'm not "for" Obama, I think Romney is absolutey the wrong choice. He represents what I think is most wrong with our system, the supremacy of the Corporation over the People.


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RE: telling it like it is

Krugman addresses one of the (many) issues, people with high mortgage rates unable to refinance at lower rates, freeing up more disposable cash for home owners.

Being Krugman, he leads off with reminding everyone of the effects from the official position of NO! from the Republican party, but he does have a point

"snip - " And the obvious place to provide debt relief is on mortgages owned by Fannie Mae and Freddie Mac, the government-sponsored lenders that were effectively nationalized in the waning days of the George W. Bush administration.

The idea of using Fannie and Freddie has bipartisan support. Indeed, Columbia's Glenn Hubbard, a top Romney adviser, has called on Fannie and Freddie to let homeowners with little or no equity refinance their mortgages, which could sharply cut their interest payments and provide a major boost to the economy. The Obama administration supports this idea and has also proposed a special program of relief for deeply troubled borrowers.

But Edward DeMarco, the acting director of the agency that oversees Fannie and Freddie, refuses to move on refinancing. And, this week, he rejected the administration's relief plan.

Who is Ed DeMarco? He's a civil servant who became acting director of the housing finance agency after the Bush-appointed director resigned in 2009. He is still there, in the fourth year of the Obama administration, because Senate Republicans have blocked attempts to install a permanent director. And he evidently just hates the idea of providing debt relief.

Mr. DeMarco's letter rejecting the relief plan made remarkably weak arguments. He claimed that the plan, while improving his agency's financial position thanks to subsidies from the Treasury Department, would be a net loss to taxpayers - a conclusion not supported by his own staff's analysis, which showed a net gain. And it's worth pointing out that many private lenders have offered the very kinds of principal reductions Mr. DeMarco rejects - even though these lenders, unlike the government, have no incentive to take into account the way debt relief would strengthen the economy.

The main point, however, is that Mr. DeMarco seems to misunderstand his job. He's supposed to run his agency and secure its finances - not make national economic policy. If the Treasury secretary, acting for the president, seeks to subsidize debt relief in a way that actually strengthens the finance agency, the agency's chief has no business blocking that policy. Doing so should be a firing offense.

Can Mr. DeMarco be fired right away? I've been seeing conflicting analyses on that point, although one thing is clear: President Obama, if re-elected, can, and should, replace him through a recess appointment. In fact, he should have done that years ago. As I said, Mr. Obama has made plenty of mistakes.

But the DeMarco affair nonetheless demonstrates, once again, the extent to which U.S. economic policy has been crippled by unyielding, irresponsible political opposition. If our economy is still deeply depressed, much - and I would say most - of the blame rests not with Mr. Obama but with the very people seeking to use that depressed economy for political advantage."

end quote

Listening to the radio this morning, they were as well talking about how cuts in gvt spending ("austerity") were now a significant drag on the economy.

Here is a link that might be useful: link


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