feeling less than stimulated

It isn’t every day that Paul Krugman and John Boehner agree, but when they do, everyone should take notice.  The Golden Mean in question?  The Stimulus Package isn’t enough, by a long shot, to revive the economy, and the hag is throwing in with this odd couple to concur.

Of course, our prescriptions are different; while the Boner thinks that the only problem is that rich people are feeling unusually pinched, an unsettling inconvenience that could easily be alleviated by reducing their tax rates a bit more.  (To what, zero?  Do these people have any shame?)  I’m with Krugman, though, who says that given the massive overheating we’re trying to cool off, more is more.  I’d go a little further, though.  The crisis we’re in, based on a massive amount of debt tied up in real estate speculation, was so extreme that it distorted our entire economy into a furious assembly line, relentlessly pumping out square feet no one needed at such an astounding clip that Obama has about as much chance at fixing it with such querulous half-measures as Lucy and Ethel had getting on top of things when they worked at the candy factory that day.  We’ve already outsourced every other job that involved making something useful, so an enormous part of our incomes, employment, and wealth were tied to real estate, which had proven insurmountably  difficult to move to India.  Having long since forgotten how to make carpets, televisions, or automobiles, say, that  anyone wanted, and having learned that everything else, from tennis shoes to bank transactions, could be dispatched with ease to third world eight-year olds paid in rice for their toil made a lot of favored people very happy.  That Nike suddenly got interested in “Free Speech” around this time is no coincidence.

Two years ago, 18 cranes were visible in central Portland, building condo towers.  Not offices, where productive business would be conducted.  Not factories, where globally competitive  products would be made.  No, fancy places where the idle rich would toss their bags of designer shoes in the entry as they got home to make their favorite dinner, reservations.  What, exactly, was going to pay for all of this?  ”Sex and the City” was not about macroeconomics, but an awful lot of otherwise smart Americans lost everything thinking it was.  And thousands of people, from coast to coast, were paid well to lay brick, write loans, and suggest colors and accessories for the Condo Economy.  Even tough it was all fake, as has become alarmingly clear, for a time even the little people were at least eating.

There is one crane left now, and only because its owners don’t have any takers for it, and the building it was intended to build may start up again when things get better.  Ironically, it was one of the few to include offices, and more disturbingly, it was being built by one of Portland’s richest tycoons, with two successful, and largely self-financed towers under his belt.  More significantly, and the situation is mild here compared to other places, there’s a yawning gap between the number of expensive and empty housing units and the people who wouldn’t rather get a roommate or move into Mom’s basement.

The massive layoffs in manufacturing that have devastated regional economies since WWII, and even before, did not leave 20 years of goods lying on the shelves unbought, nor did they take place so suddenly.  The thousands of people employed in the various endeavors that put up these buildings can’t go West, or something, to greener pastures either.  Their jobs are not just gone, but due to the glut they’ve created will be gone for a decade or two; unless the government decides to build a whole hell of a lot of things, fast, double digit unemployment will no longer be news.

We built it, and they didn’t come.  It’s a disaster, all right. Nobel Laureates and fake tanned wingnuts agree.


  1. rmp says:

    I fully expected that we would reach a depression for the reasons that you have outlined. Obama has no choice but to continue to sound optimistic because psychology plays a significant role in whether people chose to spend or not. Our foundation was taken out from under us and stimulus is not going to correct things very quickly. You are right about more stimulus, but it has to be applied in the right way and we have to be patient. The current stimulus was designed to bring results as rapidly as possible and of course that still takes a lot of time. There is a limit as to how much debt we can shoulder.

    Obama wanted to get the energy and health care bills done before he dares talk about more stimulus. The most unfair thing that could happen is for voters to forget all the history you layed out and blame Obama.

    Blaming Obama is going to get more and more popular from both the left and the right. I think we should be realistic and try and see what we can get done together and stop worrying about what political ideology is right or wrong. If we all don’t start pulling together, we will all sink together.

    • cocktailhag says:

      Well, I’m talking about some big honesty, wherein Obama says,”The only way we can soften the blow to our construction-driven economy is to build things. We need them, and the people who build them need jobs. These are not make-work jobs, these are rail and transit systems, energy and water projects we’ve neglected for too long, and although they will cost money, they will make us more prosperous down the road. No one questioned the costs of the Iraq war, which is much more than I’m proposing, which has given us less than nothing in return. There are two kinds of expenditures; investments and expenses. War, as Eisenhower said, robs us of society’s needs while diverting our amazing capabilities into useless violence and unsustainable conflict. It is an expense. Things America needs are different; they will produce long-term value, as they did during the New Deal.”
      And then I wake up.

  2. bystander says:

    True. A jobless recovery is no recovery at all. And, those were the concerns from the get-go. Healing Wall Street and healing Main Street were not necessarily coincident efforts. They weren’t orthogonal. But, accomplishing one didn’t insure accomplishing the other. Obama followed Bush to Wall Street, set the bar way too low on Main Street, and darned if he didn’t do it again with health care.

    I don’t believe for a minute that we ever could have achieved a single payer system, but by not even trying, Obama made the public option the point from which to bargain. Looking back at the initial stimulus, now deemed too small, it’s easy to see it was foreordained. In truth, Krugman at least, warned noisily that the initial stimulus was likely too small, and that going back to the well a second time would be massively difficult.

    I fear double digit unemployment will define our “lost decade.” A wise old labor market analyst once said to me, At 8% you can’t find a job flipping burgers. That might have been hyperbole. But, it certainly could be true that at 10% you can’t find a job as a Wal*Mart greeter.

    If I go one more step, I’d argue that the issue of a public option is not unrelated to a recovery in the real economy. I see these two issues as reinforcing one another. I’m just not reassured that Obama sees it that way.

    • rmp says:

      As Obama has said several times and in his last Town Hall, I wished we could use a single payer like some other countries have but we have taken decades to build an insurance system based on companies helping to pay the cost. That insurance/health industry comprises one-sixth of our economy. It would be far too traumatic and devastating to the economy if we were to adopt an entirely new system like single payer.

      As much as I love single payer, think of what our economy would be like when all of those in the health industries who comprise the bureaucratic, not me3dical, part were to lose their jobs. Single payer just isn’t a practical solution especially during an economic crisis.

      • cocktailhag says:

        I’m with Bystander on this; if we don’t fix health care, our industries will never be competitive, but I agree that due to blatant corruption we won’t be getting there soon.
        But the constant focus on costs is a bit absurd at this point. A structurally sound economy will throw off enough money to pay for it all. A stagnant, declining one never will. That’s the bottom line.

  3. cocktailhag says:

    No big surprise there Dirigo. I only wish such topics weren’t utterly verboten in the MSM.

  4. As with Portland, so also with Phoenix and Vegas, only a hundred times moreso. It’s beyond me how these morons thought that they could support the world’s largest national economy, not to mention a military juggernaut fit for Ming the Merciless himself, entirely on real estate and retail. Apparently it was beyond them as well.

    As Brecht put it, Erst kommt das Fressen, dann kommt die Moral. (First stuff your face, then worry about morals.)

    • cocktailhag says:

      Exactly… The unreality of it all was stunning to me, although I was happy to design dozens of huge renovations during the fat years, knowing they’d end soon, and laughing all the way to the bank. I don’t miss those countless hours at the Bureau of Development services, even when I’m doing some miserable tile job (like last week) or working on a roof in 95 degree heat (like today).
      In recessionary times, only the newbies are really surprised, and only those of us who remember the last Bush recession are really prepared.
      The boom blocked my view of an ugly freeway bridge, but had it continued, Mt Hood might have been next. From my side, I’m glad it’s over.

  5. retzilian says:

    I can think of a whole lotta jobs that need doin’ : infrastructure projects, roads, rails, bridges, schools, cleanups, levies, windmills, geothermal projects, hybrid autos, fiberoptics, recyling facilities, paperless technology, small manufacturing of domestic products, trains, planes, flying cars!

    Where’s this so-called entrepreneurial spirit?

    • cocktailhag says:

      That’s my point. We’re living in a world that JK Galbraith desrcibed in “The Affluent Society” as “private opulence and public squalor.” But when he wrote that, the leftovers from the New Deal and the postwar public investments in roads and other infrastructure were still everywhere in evidence. The Golden Gate Bridge, Hoover Dam, and countless other iconic civic monuments were barely thirty years old, and billions were being spent on new construction from college campuses to freeway interchanges. Not only can’t we build anything today, we can’t even maintain what we’ve built in better times.
      Any rational person would see this as a chance to honor that legacy, sorely neglected and even repudiated all these years, by continuing it. It’ll never happen, Retizilian; more’s the pity.

  6. sysprog says:

    O, let, America be America again–
    The land that never has been yet — And yet must be [...]

    O, yes,
    I say it plain,
    America was never America to me,
    And yet I swear this oath–

    America will be!

    - – Langston Hughes