Robert Reich: Slouching Toward a Double Dip, For No Good Reason

[FourScore]

Robert Reich
Slouching Toward a Double Dip, For No Good Reason
Monday, August 8, 2011

Imagine your house is burning. You call the fire department but your call isn’t answered because every fire fighter in town is debating whether there will be enough water to fight fires over the next ten years, even though water is plentiful right now. (Yes, there’s a long-term problem.) One faction won’t even allow the fire trucks out of the garage unless everyone agrees to cut water use. An agency that rates fire departments has just issued a downgrade, causing everyone to hoard water.

While all this squabbling continues, your house burns to the ground and the fire has now spread to your neighbors’ homes. But because everyone is preoccupied with the wrong question (the long-term water supply) and the wrong solution (saving water now), there’s no response. In the end, the town comes up with a plan for the water supply over the next decade, but it’s irrelevant because the whole town has been turned to ashes.

Okay, I exaggerate a bit, but you get the point. The American economy is on the verge of another recession. Most Americans haven’t even emerged from the last one. Consumers (70 percent of the economy) won’t or can’t spend because their major asset is worth a third less than it was five years ago, they can’t borrow as before, and they’re justifiably worried about their jobs and wages. And without customers, businesses won’t expand and hire. So we’re trapped in a vicious cycle that’s getting worse.

But the government won’t come to the rescue by spending more and cutting most peoples’ taxes because it’s obsessed by a so-called “debt crisis” based on budget projections over the next ten years. That obsession – which serves the ideological purposes of right-wing Republicans who really want to shrink government — has even spread to the eat-your-spinach media, deficit hawks in the Democratic Party, and a major (and thoroughly irresponsible) credit-rating agency that’s neither standard nor poor.

Meanwhile, some lazy (or misinformed) commentators are linking our faux debt crisis to Europe’s real one. But the two are entirely different. Several European nations don’t have enough money to repay what they owe their lenders, or even pay the interest. That’s threatening the entire euro-zone...

http://robertreich.org/

[polichick]

1. Good analogy - should help people get it.

[Bragi]

3. The first two paragraphs are great /nt

[Bragi]

2. rec

[girl gone mad]

4. k & r

[jwhitesj]

5. Great Analogy

[The_Casual_Observer]

6. It's Hoover mentality all over again.

[AzDar]

7. K & R

:kick:

[tama]

8. About ten years ago

I became aware of the PO-theory and it's financial-economical predictions for post PO world: multiple "dips" (to avoid the other d-word), each diving deeper and deeper.

Oil prices hit 140 before the first dip of what is often called "systemic crisis" or "final depression" or "The end of the world as we know it". Before this second dip, oil prices also clearly surpassed the estimated pain treshold of 80 bucks a barrel.

So far the empirical data agrees with the PO theory...

[Whisp]

9. is Reich another one to take shots at the president

and call him weak and stupid? I can't keep up with these guys.

Well if so, Reich, congrats. You have convinced at least some people that Obama really is ineffective and doesn't know what he is doing. Now own it, you dipshit.

My guess is you had a lot more copy lines railing at Obama than at the Baggers and the media who assist with their goals.