The unabated collision course with our national debt marches on, with vigor. The figures last week show the 2009 budget deficit at 10% of the whole economy. A 1.4 trillion deficit for fiscal 2009. This deficit is about 3 times what economists feel is healthy. Yet, no surprises. These figures have been pre-announced by most projections.
Wall Street, for one, seems oblivious to all this bad news. No lifestyle changes there since Paulsen’s blood transfusion in the fall of 2008. Now, Wall Street is able to get money cheaper and with some government protection they didn’t have before the meltdown. Also, there is less competition for the big banks. Less competition always pleases well-positioned businesses. And, the big bonuses are already back. Wall Street Party II officially began with Goldman’s profit reporting
But it is not party time for everybody. Foreclosures are up; bankruphies are up; and youth unemployment now exceeds 25%. In some demographics unemployment is up considerably more than 25%. For others, unemployment compensation is running out. You would think Wall Street would have the decency, at minimum, to forgo displays of good fortune, not to say, their rare privileges, in the context of these hard-time realities.
Remember, while Wall Street was tanking the economy with their excesses, Mr Paulsen decided his friends were too important to fail. The same people who are now raking in the big profits and seeing their stock price recover where just months ago receiving government hand-outs. They are living off the largess of government, the loyalty of their well-positioned friends, like Mr Paulsen, and many politicians they own stock in.
Investing in politicians is a cornerstone to the Wall Street business model. Owning stock in politicians is good liability insurance. When the big bubbles started bursting in 2008 they filed their insurance claims. The result was the claims were honored by a 700 billion dollar pay out. Wall Street bankers know you can take a lot more risks if the government indemnifies you. Being too big fail has its advantages. Unfortunately, the rest of the country did not have the same insurance policy as Wall Street. The American people are still struggling and many are losing.
Money is the mothers milk of politics; or so they say. No doubt, the lobbyists believe that to be true. Wall Street lobbyists have a good feel for what works best. But, time will reveal that the milk from the selfish interests was really sour milk. It was the milk that directed public policy in the wrong direction. It directed policy away from the common interest of American society, American business, American families, American prosterity, American decency, and American competitiveness in the world.
The sour milk, perversely, directed government largess to the selfish, the greedy, the degenerate, the gamblers, and a thousand other misfits.
Politicians are going to be coming home next summer saying they were against all the deficit spending and Wall Street favors. The will produce a voting record, maybe on something obscure, to help prove their point. The reality is these “opponents” to bad policy are not potent enough to stop it. Anyone can cast a vote. The good politicians, so called, cannot influence events. They get returned to office by merit of their good intentions. Of course, that is a recipe for failure.
I am fearful the public will not catch up with what is going on in the broadest sense. Too few big picture looks. A growing number catch on to some media would-be demagogue, who has skills in taping their emotions and fears. The public does need to become aroused, but it needs to be accompanied by a broader understanding of the forces at play in our changing country.