Gene Lyons: How to Sabotage a Recovery

[flpoljunkie]

But here's the thing: The main reason Obama's inherited economy is out of bounds is because the White House won't talk about it. The president seems so intent upon burnishing his credentials as a reasonable, bipartisan leader that he's failed to engage the public on a level it understands. Does he not get that you can't meet somebody in the middle who's running in the opposite direction?

Even so, the same "America the Angry" poll shows that voters aren't necessarily buying what Republicans are selling. Respondents say, by a 2-to-1 ratio (58 to 29 percent), that the GOP is blaming the White House rather than proposing anything useful. They support higher taxes on the wealthiest over budget cuts by a margin of 68 to 27 percent.

Abstract arguments about Keynesian economics mean little to the average person, but most know instinctively that America is very far from being "broke," as Republicans insist. Corporate profits are at record levels; Wall Street's wallowing in cash; the wealthiest Americans are hoarding an unprecedented share of the national treasure.

What's needed is to get that money moving. Businesses aren't hiring because there's too little demand. Unemployed, underemployed or merely scared middle-class consumers -- some 70 percent of the economy -- aren't spending.

"The answer seems obvious," Paul Krugman wrote in a recent New York Times opinion piece. "We should be using fiscal stimulus; we should be using unconventional monetary policy, including raising the inflation target; we should be pursuing aggressive measures to reduce mortgage debt. Not doing these things means accepting huge waste and hardship."

http://www.salon.com/news/politics/war_room/2011/06/08/lyons_gop_recovery/index.html

[nichomachus]

1. First, don't have a recovery, which we don't. Then, it's easy.

[RBInMaine]

5. Better yet, just go bury your head in the sand and wallow in negativity. That help?

2-3 million jobs created or saved with the stimulus. 1.5 million created since this time last year. 800,000 so far this year alone.
GDP has been GROWING. Granted, not enough yet, but it is GROWTH. And that, my wallowing friend, is NOT a recession.

[Name removed]

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[underpants]

2. Lyons must not have watched Obama for the last 4 years (since the campaign started)

in every single big moment - for the primaries, to the race speech, to Health care, to the middle East - he follows a familiar pattern.

He states his point. He waits. He gets abused by the news. He comes back out and closes (maybe not to our liking but he closes).


He rope-a-dopes.

[JuniperLea]

3. Yep...

And he's mentioned the debt origination far more times than given credit for... and far more times than I thought he would, given his bipartisan attitude.

The rope-a-dope routine is fun to watch. His timing really is good. He'll force people to state their stupidity first, then blow them out of the water.

[RBInMaine]

6. And he has been visiting plants and talking jobs jobs jobs and has DONE a lot to spur the economy

for months on end. Try LOOKING and LISTENING for a change. What planet are you on Lyons?

[Liberal_Stalwart71]

15. You, me and perhaps a few others are the ONLY ones who probably watch C-Span.

The mainstream corporate media DOES NOT show Obama's town halls, his speeches, his use of the bully pulpit. Hell, they don't even acknowledge that he does weekly addresses. What happens? Many DUers, not paying attention, then complain that Obama's not talking to the American people. He's not using his bully pulpit. He's not making speeches. What? It is because YOU decide not to watch and open your hears; that's not Obama's problem.

[RBInMaine]

4. Hey Krugman, you keep saying it, but the RePukes WILL NOT PASS MORE STIMULUS, so stop wasting your

breath. It is old and beaten as a dead horse. Talk about what CAN pass, not what fantasy you'd like to SEE passed.

[madinmaryland]

7. Huh? Maybe Krugman should be saying it. Actually he should be saying it.

He has been spot on throughout this whole downturn, going back to the genesis of this in 2001.

It is not beating a dead horse. Had we actually passed a real stimulus we might have come out of this much quicker.

[n2doc]

9. Maybe you should aim your outrage at the Ryancare lovers

After all, they keep pushing that DOA plan. At least Krugman is trying to push in the CORRECT direction. Maybe he could use some help.

[RBInMaine]

10. No one has blasted Voucher-Care and the R's harder than me & I'd love to see more stimulus. But it

WILL NOT PASS with the Pukes controlling the House. Unless you can tell on what planet it could pass, stop wasting breath calling for more stimulus. How in the holy F-ING hell could it F-ING pass????????????????????

[sad sally]

12. Too bad all the meetings the President has had with the United States of Corporations

have produced minimal results. Think how the economy could really start to recover if cash hording wasn't so popular. From last September:

http://www.thestreet.com/story/10868953/9-companies-sitting-on-piles-of-cash.htmldu

American companies are swimming in cash, big cash, as many firms have implemented brutal cost-cutting measures and massive layouts following the near-economic-depression we've been experiencing for the last couple of years. Companies have put off hiring and making capital investments since economic and political uncertainty have cast a cloud over the future direction of the economy.

According to recent data from the Federal Reserve, corporate cash is still hovering at record levels of $1.84 trillion, and cash remains higher than it was just 18 months ago. These high cash levels are starting to become a sore spot among market observers. The hope was that cash-rich companies could ignite the economy coming out of the recession by dipping into their deep pockets to boost spending and demand.

But so far that hasn't happened. It looks like the new trend among cash-rich companies is to return their money to shareholders rather than spend it. This might not be great for the economy in general, but it can lead to big profits now and down the road for shareholders.

[bhikkhu]

13. There is another side to the "cash hoarding" story

...which recalls the weeks in Sept-Nov 08, when the credit markets froze up sporadically - banks being unwilling or unable to lend. As it turned out (and most people had no idea) but large corporations had gotten entirely used to operating so far out on a limb that they had to regularly borrow money to make payroll. Sudden bankruptcy threatened a whole raft of otherwise profitable businesses. Nothing had been learned from Enron, which was one day a mighty corporation, and the next day evaporated into a scatter of worthless IOU's. It owned nothing, had nothing in the bank but accounting tricks, and no assets that weren't borrowed against for more than they were worth. Poof!

Anyway, that's why the rules were changed for banks so they had to keep more cash in reserve, and why corporations are more prone to keeping enough cash now. Technically, if your operations make 6% and you can borrow at 5%, you can maximize your size and market share by borrowing up to your eyeballs. But then one bump in the road, and poof goes the business.

The policy of keeping cash on hand is sensible, and a good decision for uncertain times.

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