We Must Recognize That We are in a Depression
Posted by Michael A. Kamperman on June 27, 2009
We are not in a recession. We are in a depression. If Washington doesn’t recognize this soon and take dramatic action, then we will fall into a new great depression. The reality is there is no leadership in Washington prepared to place the responsibility for the economy’s outcome on their shoulders. The Republicans are in disarray and are looking for an issue to get back in the electorates good graces. So far they have not found something positive and proactive to rally the country to their side. Therefore they are playing defense and waiting for the Democrats to stumble to be in a position to benefit from the fallout. The Republicans should come up with a comprehensive plan to restore the economy and they should hammer President Obama every day that he doesn’t enact their solutions. Unfortunately I have not heard a single Republican pound the table with alarm that too little is being done. Too often the refrain is too much is being done.
This leaves the Democrats who control both chambers of Congress and the Presidency to offer new solutions to restore the economy. However, the Democrats are intent on taking advantage of their large majorities in Congress and reshaping the agenda in America. Hence, the focus is on fighting global warming and re-engineering healthcare. The problem is both of these initiatives require large amounts of new federal spending at a time when the budget is already in way out of balance. If the Democrats acknowledged the number one issue confronting the nation is an economic crisis that could turn into a new great depression, then their large spending initiatives would wither and die on the vine. Additionally, like the Republicans, I have not heard a single Democrat pound the table with alarm that too little is being done.
What will it take to wake Washington up? I believe unemployment will run right past 10% and will reach 11% by this fall. Perhaps then someone in a leadership position in Washington will become alarmed enough to start pounding the table. Statesmanship requires one to do what is in the best interests of the country rather that what is politically expedient. Are there no statesmen, or stateswoman left in Washington? It would be nice if Ben Bernanke and the Federal Reserve were willing to push for more, but they too have been cowered by recent criticisms and have fallen into a wait and watch mode. If we do not acknowledge the economy is facing a serious crisis that will not heal itself with time, then we cannot take the bold and courageous actions as Americans to solve the crisis. As Warren Buffet said, “we are facing an economic Pearl Harbor.” Winning the war was the country’s sole focus in the 1940’s. People were willing to do whatever it took to win. If we are not willing to do whatever it takes to fix the economic crisis today, then we will lose the economic war we are facing.
