Saturday, August 28, 2010


As almost anyone with half a brain knew or could have predicted the economy is NOT getting any better. According to this,, new figures issued Friday show the economy struggled this spring, growing at a meager 1.6 percent annual pace. The initial estimate was 2.4 percent, and even that was anemic. Analysts say the summer should be disappointing, too.
You don't say.

The fact is this economy has been going in the wrong direction for many years and the only ones benefitting from it are the banks thanks to our elected leaders shortsightedness.

Shortly after the government's revision, Federal Reserve chief Ben Bernanke said the Fed was ready to take additional steps to prevent a second recession, if the economy deteriorates further. But he stopped short of promising any action.

He can't promise any actuion as they have no plan. Thereis only so much money you can print without backing it up with securities and it is gimmicky at best anyway. There also can be no "second" recession if we are still in the current one. Most of us know that. why don't they?

The Fed "will do all that it can to ensure continuation of the economic recovery," he said.

Like what? Even more bank bailouts, that by any measurable standard have failed to accomplish what they were intended to do, and all from the working man's taxes.

In the first quarter of the year, the economy grew much faster, at a 3.7 percent pace. Since then, though, the housing market has slumped after the expiration of a homebuyer tax credit, and business spending and manufacturing activity are both cooling off.

We all knew that the home buyer credit was gimmick financing and once expired would eliminate the illusion that the housing market was making a recovery. In fact, if the banks had been willing to work with homeowners in the first place the industry may be far better off.

Manufacturing base? What base? The manufacturing in this Country has been downsized so far that we have to consistently rely on imports and that is totally unacceptable. America has always been a powerhouse because of our manufacturing base not the gimmick money policies that have become a way of life from the Fed.

If banks were doing their job working with homeowners, for example, the rate of foreclosures in the Country would be far less than what we have today. The banks foreclose, show the homes as a loss on the books, and inflate their earnings while many lose everything they have worked for their whole life. Instead of taking bailout tax money they could focus on loan mods and get something in return. Instead they have opte dto have us pay trhem and then watch as these foreclosed homes sit on the market and deteriorate in our neighborhoods.

They don't suffer and why would they? We have clearly shown that the same taxpayers that they are foreclosing on will bail them out through the fed.

Bernanke, speaking to a Fed conference in Jackson Hole, Wyo., acknowledged the economy has slowed more than policymakers had anticipated and said it is "vulnerable to unexpected developments."

Unexpected? The only thing most Americans do expect is that the economy will get much worse.

Bernanke outlined several options, including having the Fed buy more securities, most likely government debt or mortgage investments, as a way to drive down interest rates on all sorts of debt and spur more spending that might get the economy going.

Been there done that. The fact is that shoring up Fannie Mae for example has really not helped much. There has been practially no loan mods approved that were supposed to help reduce interest for homes already. Why would we expect any different now? Hold the banks accountable for their failures not we the taxpayer.

Bernanke made clear "he is willing to act to ensure that the recovery remains on the right path," said Zach Pandl, an economist at Nomura Securities.

That reassured the financial markets, which rose sharply after the Fed chairman's speech. The Dow Jones industrial average finished 164 points higher and back over 10,000, and broader markers registered solid gains.

The market is making money so here is a question for each of you? Have you benefitted from Bernanke's statements? Are these the same statements we have been hearing over and over again?

The fact is that most who benefit from the market fluctuations are not the average citizen but the money elite. The market has not generated any jobs that would alleviate our problems and will not in today's uncertain future. Need proof?

How much the government could help at this point is an open question. The Fed has already lowered its key short-term interest rate to nearly zero, but that has yet to rejuvenate the economy. The benefits of federal stimulus programs are fading, and Congress has declined to pass any major new aid.

Bernanke said the prospect of high unemployment for a long period is a central concern for the Fed...

The Fed chief said the foundation is being laid for stronger growth in 2011: Households are saving more and healthier banks are more willing to lend. That should boost consumer spending, which makes up 70 percent of U.S. economic activity.

You cannot have stronger growth in 2011 without stronger growth in the small business sector. And you most certainly cannot have stronger growth if the banks are not doing their job instead opting to shore up their own interests with our tax bailout money. From the many businessmen I speak with everyday the banks simply are not lending money.

Until this is resolved we will continue hearing the same old rhetoric and achieving the same old results. In short nothing will change. In 2011 or beyond.

Still, the report for April to June showed that economic growth was reduced by a surge of imports in June and a smaller buildup in business inventories than previously estimated.

Without the trade deficit, the economy would have grown at a healthy 5 percent pace. Instead, the gap essentially subtracted 3.4 percentage points, the biggest hit from a trade imbalance since 1947.

Notice where it says the trade deficit screwed us? I agree. This shows the need for America to wake up and become self sustaining once again. We owe nothing to the rest of the world, in fact I would say they owe us.

How many Nations do we support financially with borrowed funds at our own expense? How much of this money could we use here at home today?

Bernanke and many private economists seem to think that was mostly an aberration. As businesses pare back their spending on inventories and reduce investment in new equipment, imports should decline and come more into alignment with exports, they say.

I don't know about you, but it is past time we keep falling for the rhetoric, and start getting involved in changing the leadership that has created this mess in the first place.

Wake up America your Country needs you!

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Yours truly,
Ed Springston


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