Monday, October 19, 2009

Recession - Recovery ??

Massive amounts of money have been poured into the US Banking and other Financial sectors to "save" us from "disaster". As a result of the actions of the end of the Bush Administration and the first almost year of President Obama's leadership, we now seemingly have two distinct "results" or from my perspective "economies".

Large investors and those with a Lot of Money seem to have been helped by the economic policies. We are told, based upon supposed economic activity, that "the recession is over". The Dow Jones Industrial Average is at 10,000, not a "high", but a recent high.

Strangely though there seems to be another "economy" which is that of the "working class" - which increasingly seems to draw in formerly "upper-middle class" and other middle class people. If they are still employed, their overtime is gone. They may be working part-time now, instead of full-time. Their wages are not going up and may even be going down. More and more are laid off and there are many applicants for each job opening.

It is somewhat unclear what exactly is going on. It is apparent that major industries are not borrowing money to hire more workers. What investment is going on seems to be borrowing at low interest rates to get a good rate of return, not to invest in building our economy.

It is unclear how 10+% unemployment rates continuing for another 1-2+ years will allow people who are not "investment class" to spend money helping to build the economy. It is similarly unclear Why producers of products and other commercial enterprises are going to look at "the bigger picture" and invest in our people and economy in general, when they see a lack of short-term profits being possible and other ways to "make money" now.

In the end it seems obvious to me that Until and Unless Obama and other political leaders see the need to actually Help - those who are losing their jobs and homes, rather than helping the Banks, that little will change for the better. Perhaps it was necessary to save the financial system, however now that it is "saved", helping our People and building from "the bottom up", rather than "top down" seems obviously necessary.


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