What?

[Daveparts still]

What?
By David Glenn Cox


You and I and pretty much all of God’s children understand the tidewater blindness; it is pretty common in all administrations regardless of political party. There are occasions when this political blindness is so incredibly displayed that it is hard to fathom. You would think that they would hire someone off the street just to explain to them what is going on in the real world.

Like the famous George H.W. Bush moment when he had never seen a grocery scanner, our Treasury Secretary Timothy Geithner made the following public comments:

“Sept. 9 (Bloomberg) -- U.S. consumers are starting to save more money after years of accumulating too much debt. 'Over the past generation, we have gone from a nation of savers to one of borrowers,' Geithner said at an event with Vice President Joe Biden at Syracuse University in New York today. 'We have devoted too many resources to consumption and not enough to investment.'”

What???

Geithner first cut his teeth with Kissinger and associates; he worked to open markets for increased free trade as a member of the Federal Open Markets Committee. He has worked to reduce the amount of capital needed to operate a bank. He was waist deep in the demise of Bear Sterns and Lehman Brothers and manages the Treasury's $350 billion TARP bailout fund. After all of this real world experience what does Mr. Geithner propose for our salvation?

“We have devoted too many resources to consumption and not enough to investment.”

Tie me to the mast and pour hot wax in my ears, and whatever you do, don’t cut the ropes for how could one resist a siren's song so sweet.

Over the past generation we have gone from a nation with a vibrant middle class of industrial workers to a hollowed out economy of low paying service sector jobs without benefits. And whose idea was that? Republican and Democratic politicians with Wall Street executives either leading the charge or pushing from behind. Now, in the worst economy since the Great Depression, just who does Mr. Geithner choose to blame? Well you, of course! This is all your fault.

“U.S. consumers are starting to save more money after years of accumulating too much debt.”

The billions of dollars in bank losses made good by government loans seems to have escaped his memory. This is where an average person could assist the Treasury Secretary and whisper in his ear, “Sir, wages have been going down for all but the top 20% of the economy. They don’t have the money to save and medical bills account for 3 of every 5 bankruptcies. And besides, sir, the TARP money was used to replace the money put in the bank by savers.”

Americans are saving more because they are, in point of fact, terrified, and after listening to Mr. Geithner, their reasoning appears sound. We are in a depression and if we all save our money the depression only grows worse. Then the boss man lays off more workers and the fear is multiplied to the next level. I guess the Treasury plan is for us all to go back into the stock market and invest.

That would certainly help the banks and the brokerage houses, but it wouldn’t do squat for the average man on the street's economy. A higher savings rate means less money available for consumer spending. With consumer spending 70% of the economy and with half of the manufacturing base we had a generation ago, it is hard to understand the Secretary's logic other than to ask, “What?”

Maybe he just doesn’t know that we are out here? Maybe he doesn’t make the connection between economic benchmark numbers and those creatures running loose in the streets that he sees occasionally through the tinted windows of his limousine. That’s us, Tim. If you can’t stop, at least wave.

We are losing our jobs in record numbers and losing our homes by the millions, Tim, millions. While millions of us decline credit, millions of others are denied credit because of lending restrictions that the banks have put in place. The banks are investing, Tim, but they don’t seem to want to invest in us. They don’t want to lend money to us for the same reason that millions of consumers don’t want it, out of fear.

That same fear is causing those with the money to invest to stay on the sidelines. Only a fool thinks that this turmoil is over, or only a fool living in this world.

Consumer credit fell by 10% at an annual rate in July to $2.5 trillion. Non-revolving debt, including loans for automobiles and mobile homes, plunged by $15.4 billion in July. Revolving debt, such as credit cards, fell by $6.1 billion.

“Most banks cited reduced risk tolerance and 'a more uncertain economic outlook' as the main reasons for restricting credit to businesses, with 35.2 percent saying they 'tightened somewhat,' the Fed said in its quarterly Senior Loan Officer survey.”

I read remarks like Geithner’s and I pinch myself. Did that grumpy old gray-haired gentleman win the election? That was his plan for recovery, tax cuts and savings and allowing Wall Street and the free market to make us all rich again.

I shake my head in wonder. Has “Change we can believe in” become “No change, can you believe it?”

Geithner has been called a genius in the field of economics, but I think what is needed is a genius in the field of people. Someone with less panache with numbers and a greater understanding of humanity. Our goal should be to save the maximum number of people, not dollars.

[orpupilofnature57]

1. He is a people person ,because you cant con numbers.