And everything in New York ain't always what it seems
You might be fooled if you come from out of town
But I'm down by law, I know my way around
Too much, too many people, too much
- Grandmaster Flash and the Furious Five
On the evening of Dec. 3 last year, theand,
sent an advance copy of the next morning’s jobs report to the White House...It showed that job losses had all but stopped in November, after nearly two years of big declines. White House aides exulted. , a top economist, brought a copy of the numbers to the Oval Office, and embraced her. A photograph of the moment, with a Christmas tree off to the side, was hung in the office of the . The good news — and the optimism — would continue for the next few months.
“The health care bill alone is the most significant and far-reaching piece of domestic social policy in my lifetime,” says Neera Tanden, the 40-year-old chief operating officer of the liberal Center for American Progress, who worked in the Clinton and Obama administrations and was a top official inWell, as Dems are finding out, "productive" is in the eye of the beholder, while Ms. Tanden didn't seem to get the memo the Dems weren't running on their "most significant and far-reaching piece of domestic social policy."
’s campaign. In all, Ms. Tanden added, “It is hard to see a more productive session of Congress in decades.”
Meanwhile, the complete capitulation concerning any real financial reform, where the Dems proved themselves for all who honestly care to look the servants of Wall Street and the big banks, continues to be a drag on any sort of economic revival. The WSJ has an excellent piece how the banks all posted profits this quarter by raiding their reserves against bad loans, because of course the housing market is getting better, right? The piece states,
The biggest U.S. banks virtually doubled their collective earnings in the third quarter just by injecting $8.1 billion into net income from funds they had set aside to cover loan losses.Finally, Chris Whalen has a must read piece on how until we restructure and reform the financial sector, we will have no economic vitality. Whalen writes,
There are 18 commercial banks in the U.S. with at least $50 billion in assets, and together they earned an adjusted $16.8 billion in the third quarter. Of those profits, nearly half, or 48%, were from drawing down what bankers call loan-loss reserves, according to an analysis by Dow Jones Newswires. A year ago, the same 18 banks earned $6.2 billion in quarterly profits; at that time, they added more than $7.8 billion to the same reserves, a move that reduced their profits. The analysis omits a $10.4 billion noncash charge to earnings that Corp. disclosed during the third quarter.
Because President Barack Obama and the leaders of both political parties are unwilling to address the housing crisis and the wasting effects on the largest banks, there will be no growth and no net job creation in the U.S. for the next several years. And because the Obama White House is content to ignore the crisis facing millions of American homeowners, who are deep underwater and will eventually default on their loans, the efforts by the Fed to reflate the U.S. economy and particularly consumer spending will be futile. As Alan Meltzer noted to Tom Keene on Bloomberg Radio earlier this year: "This is not a monetary problem."
Forget Treasury Secretary Tim Geithner lying about the relatively small losses at American International Group (AIG), the fraud and obfuscation now underway in Washinton to protect the TBTF banks and GSEs totals into the trillions of dollars and rises to the level of treason. And the sad part is that all of the temporizing and excuses by the Fed and the White House will be for naught. The zombie banks and GSEs alike will muddle along until the operational cost of servicing bad loans engulfs them. Then they will be bailed out -- again -- or restructured.Make no mistake folks, there's a criminal element atop our financial industry, who operate with both the complicity and culpability of much of our political class. Until we reform our politics and the financial industry, we will not have economic vitality. And we will not have reform, until it is demanded and undertaken by the American people. That is where we are.