Nov. 19, 2007
A Perfect Storm Stalks American Prosperity
The Nation: Prospect Of An Economic Slowdown A Challenge To Both Parties
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Play CBS Video Video Economic Slowdown Feared Low consumer spending and high gas prices are only two of many factors contributing to an economic slowdown, sparking fears of a recession. Anthony Mason reports.
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Video U.S. Economy In A Tailspin Some experts say rate cuts by the Federal Reserve may only help consumers in the short term. Randall Pinkston reports.
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Video Economy Heading For A Slump? As oil prices continue to inch towards $100 a barrel, economists are worrying that the nation's economy will continue to suffer. Alexis Christoforous reports from Wall Street.
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(CBS/AP)
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Interactive Eye On The Economy In-depth features on U.S. markets, taxes, employment and the Federal Reserve.
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In-Depth 2008 Presidential Hopefuls Profiles and the latest news on the Democrats and Republicans running for the White House.
The skies are darkening, and ominous new considerations are intruding on the politics of 2008. The softening economy, accumulating foreclosures for homeowners, more multibillion-dollar write-offs by major banks, the swooning dollar and stock market, oil prices approaching $100 a barrel - the list goes on, inviting a trendy cliché: the "perfect storm" stalking American prosperity. The Federal Reserve chair will never predict recession - it would be self-fulfilling if he did. But Ben Bernanke came close when he acknowledged to Congress that things are going to get worse before they get better.
Most Americans are ill prepared for a catastrophic reckoning. Everything else aside, the basic fact of our national condition is indebtedness. That means when jobs disappear and wages slump further, the struggle to keep up with the mortgage or rent will intensify for a broad swath of the population. The pain this time will not be confined to a few laid-off "losers."
Presidential candidates have not had much to say about these gloomy realities, but they soon will. A down economy adds another heavy blow to Republican prospects but also presents a challenge for Democrats. The incumbent party takes a serious hit if an election-year recession develops (ask Jimmy Carter, in 1980, or George H.W. Bush, in 1992). But that bad news might encourage Democrats to be even more cautious than they already are. Voters will want to know of a potential president, first, whether he or she grasps what is upon us and, second, what he or she intends to do about it if elected.
What should the candidates be calling for? The first imperative should be short-term measures to salve the pain of those who have lost homes or are drowning in debt. It is good politics, of course, but also an essential first step toward restoring a healthy and equitable economy -- healthy because it is more equitable. Representative Bradley Miller has introduced a bill that would allow bankruptcy judges to ease homeowners' mortgage terms, but it's running into the usual big-money opposition - from both parties. For the longer term, government can enforce tightened mortgage regulation, which has fallen into disuse (Miller, Barney Frank and many others are co-sponsoring a good start). This kind of assistance is not unlike what government does for major corporations and banking institutions when they get into similar trouble. Meanwhile, financial firms should be disciplined - if not indicted - for the reckless behavior that led to the crisis.
Economic stimulus requires the government to get the money moving again in a stalled private sector, pumping up jobs, wages and benefits with emergency spending - and, yes, temporarily larger federal deficits. Taxing wealth and reviving the right to organize unions will start to redress the gross inequalities. The housing industry is not coming back to life anytime soon, but through public works programs we can repair our crumbling national infrastructure. We can restart public employment programs for displaced industrial workers and harder-to-employ inner-city youth. We can send working people back to school with financial aid aimed at community college students.
The point is, the coming storm, whatever its dimensions, is a great opportunity to begin restoring the role of responsive, effective government. The Republicans clearly don't get it. But it's not clear the Democrats do either, or that they have the nerve to embrace the possibilities. Voters should push them to speak to this moment. And then judge them accordingly.
By the editors of The Nation
Reprinted with permission from the The Nation.
 | If you like this article, check out www.thenation.com for more investigative reports, timely editorials and incisive columns |
Best-selling author Mitch Albom on his first nonfiction work since "Tuesdays with Morrie."
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See all 37 CommentsGreat points, I agree with you.
On top of that our "prosperity" has been based on smoke and mirrors and credit since Reagan came in and starting ruining the government.
I hope people wise up, Buy Nothing on Nov 23rd and then start saving money. Stop consuming and we will avoid war and take our country back.
the last 7 years; throwing easy money around to buy
houses,cars,whatever; just so no one would be unhappy
while they were fighting their war. Come on 0% financing.
Who was kidding who. Why save lemmings !!!!!!!!
Bite the bullet. Real interest rates at the moment
should be about nine percent. Why not save me
who has invested in money market funds only to now
see the government & fed still artificially dumbing the
market down.
All these years the responsible citizens have lived on less while the idiots spent beyond their means. Now the government is going to take from the responsible and give to the profligate? That''s not justice, that''s robbery.
Let the "those who have lost homes or are drowning in debt" pay the penalty for their sins and learn responsibility. Bailing them out will only teach them that they can take advantage of the rest of us. They will be laughing all the way to the bank at the hardworking Americans who are responsible.
Excellent points all, I couldn''t agree with you more.
Conservatives and Republicans hate any type of optimism about the future, because the only way to get to a better future is to leave their values behind...
In a sense, it will be bitterly humorous to hear those "neocon wannabes" who used to dismiss the unemployed as "welfare mothers" or "lazy", having to explain their own appearance amongst the "new underprivileged class", and their sudden urge to demand the government "help" them.
Yeah, really. That was the argument for not building gas efficient cars. Don''t ever interfere with growth. Conservation impedes growth. Growth at all costs. It serves Wall Street but the rest of us have to live with the pollution, traffic, garbage, crime, and everything else that comes with the massive growth to feed Wall Street investors. Just today someone on CNBC was yapping about why would any consumer want to cut back on Christmas spending when the economy is booming. Huh?
It''''s the only trick left in their hat.
Posted by ianlou at 09:54 PM : Nov 19, 2007
Look out for another video from Osama, coming soon to a neocon outlet near you.
Or maybe, if the neocons are really desperate, they might get Osama to do another hat trick.
911 seemed to do the trick. It got Bush''s numbers up into the stratosphere.
Wow!
Even using sweatshop and child labor, the GAP is still suffering, with sales down by 8%.
I''m dreaming of a red-ink Christmas.
We know that Chevron profited prior to the latest invasion of Iraq, by giving kickbacks to Saddam in exchange for business favors-
%u201CChevron settles Iraq kickback charges%u201D
%u201CChevron Corp. has agreed to pay $30 million (U.S.) to settle charges it made illegal kickbacks to Iraq for oil purchased in 2001 and 2002 under the United Nation''s oil-for-food program.%u201D
www.thestar.com/printArticle/276611
But I am wondering about this %u201Chuman energy%u201D campaign. By "human energy", is Chevron talking about the energy that it expends to torture, murder and rape people, in their efforts to maximize profits:
"Chevron is one of the largest foreign investors in Burma and is the only remaining major U.S. corporation with a significant presence there. In 2005, Chevron bought the company Unocal weeks after the latter settled a lawsuit accusing it of assisting the Burmese military junta in the torture, murder and rape of villagers during construction of a pipeline."
www.democracynow.org/article.pl?sid=07/10/12/1454252
...or are they proposing the idea of squeezing oil out of humans, directly?
Happy Thanksgiving.
However, it''s not going to affect the truly rich much. They''ve made enough off us already to stockpile for years.
Maybe this will make us stick to home a little more, value what we''ve already got, and enjoy our families.
The livings all good when it gets right down to it.
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