Saturday, February 07, 2009

Economic Insecurity Update: Of Obama & Sullenberger; Meanwhile, Stiglitz says "Nationalization is the only answer. These banks are ... bankrupt."

Migrant Mother/Pea-Picker in the Dust Bowl, Photo by Dorothea Lange, 1936

It’s time for Mr. Obama to go on the offensive. Above all, he must not shy away from pointing out that those who stand in the way of his plan, in the name of a discredited economic philosophy, are putting the nation’s future at risk. The American economy is on the edge of catastrophe, and much of the Republican Party is trying to push it over that edge. Paul Krugman, 2/5/09

"I don’t care whether you’re driving a hybrid or an SUV — if you’re headed for a cliff, you’ve got to change direction. Think Progress, 2-5-09

"When you hear these attacks deriding something of such obvious importance as this, you have to ask yourself, 'are these folks serious?' Raw Story, 2-5-09

[Paul Krugman says] "Now the centrists have shaved off $86 billion in spending — much of it among the most effective and most needed parts of the plan. ... My first cut says that the changes to the Senate bill will ensure that we have at least 600,000 fewer Americans employed over the next two years." Think Progress, 2-7-09

Economic Insecurity Update: Of Obama & Sullenberger; Meanwhile, Stiglitz says "Nationalization is the only answer. These banks are ... bankrupt."

By Richard Power

Over this last week, as I watched Obama first offer the open hand of friendship and collaboration to those who have dug the ditch he is trying to pull us out of, and then clench the righteous fist when they chose instead to toy with catastrophe by bad vibing the stimulus package, and seeking to blunt its impact, I kept thinking of Chelsey Sullenberger, the US Airways pilot who recently performed that extraordinary emergency landing in the chilly Hudson River, after an accidental encounter with a flock of birds took out both of his plane's engines.

Imagine what Sullenberger would have been up against if Mitch McConnell (R-KY) had been his co-pilot or Eric Cantor (R-VA) had led a passenger revolt?

Perhaps McConnell would have been screaming that Sullenberger should let the air currents decide, or Cantor would be insisting that the best way to stay in the air would be to jettison the carry-on luggage.

Their economic and political philosophies have been proven to be dangerous and delusional. Why are they being treated with any credibility whatsoever on the air waves?

But that's a silly question, isn't it? They are treated as if they have credibility because they represent the interests of the corporate media, their advertisers and the inter-locking boards of directors that rule them all.

Last week, Think Progress released a report showing that, in the debate over the House economic recovery bill on the five cable news networks, Republican members of Congress outnumbered their Democratic counterparts by a ratio of 2 to 1. ... In a new analysis, Think Progress has found that Republican lawmakers outnumbered Democratic lawmakers 75 to 41 on cable news interviews by members of Congress ... Think Progress, 2-6-09

Meanwhile, even what Obama is trying to accomplish, in the face of this irresponsible opposition, is, of course, only a beginning; in itself it is not nearly enough.

In reality, the stimulus package should be much larger, and include more infrastructure projects. But that's not all.

Consider this insightful Deutsche Welle interview with Nobel Prize economist Joseph Stiglitz of Columbia University, who is also a former Chief Economist for the World Bank and lead author of the International Panel on Climate Change (IPCC):

Deutsche Welle: Economists Nouriel Roubini and Nassim Taleb, who predicted the global economic downturn, have called for a nationalization of banks in order to stop the financial meltdown. Do you agree?
Stiglitz: The fact of the matter is, the banks are in very bad shape. The U.S. government has poured in hundreds of billions of dollars to very little effect. It is very clear that the banks have failed. American citizens have become majority owners in a very large number of the major banks. But they have no control. Any system where there is a separation of ownership and control is a recipe for disaster.
Nationalization is the only answer. These banks are effectively bankrupt.
Deutsche Welle: The Institute of International Finance estimates that the private flow of capital to developing countries will shrink by about two-thirds. Are we facing a situation where we could see a total collapse of many developing countries?
Stiglitz: I think many governments of emerging nations actually have a much better central banking system than the United States. They realized the risks of excessive leverage, excessive dependance on real estate lending and so they took much more prudent actions. Many developing countries also built up large reserves and are in a better position to meet this crisis than they were a decade ago.
But some will face very difficult times, potentially defaults. Some of these countries are suffering from having paid too much attention to what has gone on in the United States.
Truthout, 2-6-09

For an archive of Words of Power posts on Economic Insecurity, click here.

Richard Power's Left-Handed Security: Overcoming Fear, Greed & Ignorance in This Era of Global Crisis is available now! Click here for more information.

, , , , , ,