Signs of “recovery” are in the air, the business pages say. We can see “green shoots” in the economy, says Federal Reserve Chairman Ben Bernanke. The banks are “starting to heal,” says Treasury Secretary Tim Geithner. Stocks have risen over the last weeks; giddiness is back on Wall Street.
In Washington, the silly season never ended. Congress rushed to pass a credit card reform bill to placate public anger. Yet, despite the fact that the big banks survive on the taxpayers’ dole, they had sufficient clout to turn back all efforts to put a lid on the interest rates. Sen. Bernie Sanders’ amendment calling for a ceiling of 15 percent was routed. Even 35 percent couldn’t survive.
The banks succeeded in cutting the heart out of Obama’s mortgage rescue plan, defeating a provision that would allow bankruptcy judges to reset mortgages, prohibiting the individual assessment that could sort out the victims from the speculators.
Republicans did rise to the occasion. Joining with conservative Democrats, they added an amendment to the credit card bill allowing concealed weapons in our national parks. Look for the shoot-out in Yosemite and hope Smokey isn’t caught in the crossfire.
Wall Street and Washington, money and power, look like they’ve lost their grip on reality. Legislators need to go home, go out to the mall, stroll through a couple of auto dealers, check out the housing market and even take a look at the unemployment lists.
Wall Street may be breaking out the champagne again, but Main Street is still drinking hemlock. Unemployment is rising to levels not seen in a quarter of a century. It will soon be worse than at any time since the Great Depression. Long-term unemployment is up. Poverty is up. Malls are empty. Stores and small businesses are shutting their doors.
The banks are about to get hit with widespread commercial loan and property defaults and rising credit card, student and personal loan defaults.
Home foreclosures are still up. The supposed plans to help families renegotiate their loans have reached barely a handful of the millions in trouble.
And now General Motors and Chrysler are announcing plans to close 1,800 dealers. Thousands of autoworkers will lose their jobs, but many more jobs will be lost at car dealers, suppliers and the restaurants and local economies that depend on those jobs.
Outside of China, the rest of the world is doing worse than we are. So exports are down. With boomers now faced with the loss of $13 trillion in wealth — from their savings, investments and homes — families are spending less, tightening their belts. Consumer demand isn’t about to return to its old levels.
Economists predict the Obama recovery plan will soon start to kick in, generate jobs, reduce hardships and help states and schools avoid crippling layoffs. But remember, Republicans and conservative Democrats made Obama’s plan much smaller and weaker than expected. They took out many of the good jobs that would be created by building roads and bridges and added a top-end tax break (the alternative minimum tax fix) with benefits that flow basically to those who make $100,000 to $200,000 a year.
For families, for young people, for urban residents particularly, things are getting worse, not better. I’ve seen the faces of autoworkers as their hopes were shattered. I’ve talked to the students who can’t afford to pay debts they had to take on to go to college. I’ve seen the young men and women who can find no work and start to lose faith in themselves. I’ve watched young couples, their faces grim, as they realize they can’t save their home.
It’s time to stop playing politics and start paying attention. This economic crisis is getting worse for working families across the country.
Champagne on Wall Street and guns in Yosemite won’t help get us out of the hole we are in.