Recession Denial

Bob Herbert has a op-ed column in the New York Times (http://www.nytimes.com/2007/11/10/opinion/10herbert.html?hp) which enunciates what I have been discussing in a number of recent posts. Namely, that the U. S. economy is headed for real trouble and no one seems to want to face the reality. Pretending a problem is not in fact happening does not make it go away. All of the "job growth" and other smoke trotted out by the Chimperator's minions do not change the facts. Here are some highlights:

If it looks like a recession and feels like a recession ...“Quite frankly,” said Senator Charles Schumer, peering over his glasses at the Fed chairman, Ben Bernanke, “I think we are at a moment of economic crisis, stemming from four key areas: falling housing prices, lack of confidence in creditworthiness, the weak dollar and high oil prices.”

While Mr. Bernanke and others are waiting for the official diagnosis (a decline in the gross domestic product for two successive quarters), the disease is spreading and has been spreading for some time. The evidence is all around us. Representative Elijah Cummings of Maryland told Mr. Bernanke that many members of Congress are holding forums in their districts “to help people who are coming to our doors, literally with tears in their eyes, and trying to figure out how they’re going to manage a foreclosure that’s right around the corner.”

The housing meltdown is getting the attention, but there’s so much more. Bankruptcies and homelessness are on the rise. The job market has been weak for years. The auto industry is in trouble. The cost of food, gasoline and home heating oil are soaring at a time when millions of Americans are managing to make it from one month to another solely by the grace of their credit cards.

The country has been in denial for years about the economic reality facing American families. That grim reality has been masked by the flimflammery of official statistics (job growth good, inflation low) and the muscular magic of the American way of debt: mortgages on top of mortgages, pyramiding student loans and an opiatelike addiction to credit cards at rates that used to get people locked up for loan-sharking.

And the most popular measure of inflation, the Consumer Price Index, does not include the cost of energy or food, “the two most significant aspects of the increased cost of living for the American people.”

The elite honchos in Washington and their courtiers in the news media are all but completely out of touch with the daily struggle of working families. Thirty-seven million Americans live in poverty and close to 60 million others are just a notch above the official poverty line. An illness, an auto accident, the loss of a job — almost anything can knock them off their rickety economic perch.

We hear over and over that consumer spending accounts for 70 percent of the gross domestic product, but we seldom hear about the frightening number of Americans who are trying desperately to maintain a working-class or middle-class style of life while descending into a sinkhole of debt.

Yet for the GOP, the most serious issues continue to remain illegal immigrants (many of whom do labor American workers refuse to do), gay marriage and employment non-discrimination, and trying to start another war in the Middle East based on "cooked" information. Why the Democrats aren't jumping on this situation much more is dumbfounding.