The economic recovery was touted by the media this week as being under way, so I would like to re-post this comment I made earlier in the week:

How do we try to understand the several years of prosperity before the recession hit? How, for instance, did job growth and wealth creation meet the needs of population growth during the Bush’s years? The answer is key to understanding what an attempted recovery will look like.

Economists during this period consistently told us that economic growth of six percent per year was needed in order to meet the needs of population growth and to maintain standard of living. Well, during much of Bush’s tenure, it looked like we were meeting that goal. But how? Was the growth healthy and sustainable, or based on “false growth,” or in essence, illusion?

THE CULPRITS

It turns out, as we now know, that the major drivers for wealth creation and the attendant job growth during the Bush years were three main factors: sky-rocketing home values, sky-rocketing stock values, and easy credit.

FIRST CULPRIT

Home values doubling every few years (due almost exclusively to foreign investment), is something that will likely never happen again, and SHOULD NEVER HAPPEN AGAIN unless we want to repeat the economic fiasco that led to this recession. Home prices are still adjusting to reasonable levels, and when all has settled, trillions of dollars worth of wealth will have evaporated as easily as it was created. This wealth should never have existed in the first place.

SECOND CULPRIT

The artificial creation of all that wealth fed the stock market bubble, as did investor stupidity. The stock of healthy companies should trade at maybe 10-20 times earnings, TOPS. Instead, companies were trading at absurd multiples, many at hundreds of times earnings. This was the “irrational exuberance” alluded to by Greenspan. Again, as stocks adjusted to reasonable levels, trillions of dollars of wealth evaporated. Also again, this was wealth that should never have existed in the first place.

THIRD CULPRIT

Foreign investment and banks flush with bubble cash made for easy credit. This allowed Americans to spend far beyond their means, even as they were making a killing off illusionary wealth that would soon disappear into the ether from which it came. This level of freak spending, bolstered by artificial wealth creation and easy credit, is what allowed job growth in America to keep up with population growth. Since almost all of America’s wealth creation was on paper and not based on real productivity, almost all of the jobs created were service sector jobs fed by the irrational spending of illusionary wealth. Service sector jobs are, of course, the first to go when spending slows.

THE BOTTOM LINE FOR RECOVERY

The tens of trillions of dollars lost in housing and stock market will likely never be seen again. More importantly, unless we want to have an economy again based on illusion, those tens of trillions SHOULD never be seen again.
This means that we had a decade of population growth for which little new real wealth was created. This lack of new real wealth means no new spending to create new jobs… FOR TEN YEARS WORTH OF POPULATION GROWTH!!!!!
In other words, the wealth simply doesn’t exist anymore that sustained the last decade’s worth of people that were added to our country. It evaporated! It’s gone, likely never to return… or at least no time soon.

Add to the above one more exacerbating circumstance: those who would historically have been leaving the workforce to free up jobs for newcomers are now being forced to work past the traditional age of retirement. This will naturally translate into even fewer jobs for those trying to enter the workforce. Had this recent economic fiasco been averted with a little foresight, regulatory enforcement, and the intelligence to heed the Cassandras who warned those in power, then this compounding problem of fewer retirees wouldn’t exist either.

Now, with real wealth reduced by tens of trillions of dollars, there’s not enough money in the financial system to both give the ten year’s worth of added population jobs, and have everyone maintain standard of living.
This fact means that a trade off will have to occur:
either
1) we find a way to give everyone a job, but median individual real wealth is reduced
or
2) median individual real wealth remains level, but unemployment numbers remain high.

Either way, we face a major paradigm shift in America.

This is the true legacy that Bush and the Republican Revolution left our country and our new President. The Bush administration was content that all of our growth be illusionary, that none of it be based on real increases in productivity… that it NOT BE SUSTAINABLE.

This is not to say that some Dems, especially Clinton, were completely blameless, but the real opportunity to avert the crisis was on Bush’s watch… at the moment when enough credible voices were beginning to alert those in power to what was happening. Of course, Republicans were solidly in power at this time and had overseen the creation of K-Street; never before had the Federal government been so closely and openly aligned with Wall Street and huge corporate interests.

Unfortunately, all the above leaves little hope that enough jobs can be created to bring our unemployment down to the low levels to which we’ve been accustomed. Also unfortunately, Americans will never place the blame squarely where it belongs, and we’ll end up thwarting the recovery efforts of one of the most honorable and intelligent Presidents we’ve ever elected.

A SMALL GLIMMER OF HOPE

Finally, I submit that our best hope for ever again becoming a significant producer of real goods and rekindling a substantial manufacturing base, lies of course in producing something the world wants and needs. Importantly, it should be in sectors where U.S. technological prowess and innovation gives our country an upper hand.
The obvious area, I believe, is green technologies, just as Obama and many others have envisioned and proposed. New world realities ensure that leaders in green technologies will be guaranteed an edge in future trade deficit wars.
In all other areas of manufacturing, we have already lost the battle… let’s not lose this last and best opportunity.

Addendum:

Marketplace(I thinkit was Marketplace) reported this week that we are already seeing that the length of the average work week is decreasing in America, to around thirty hours… this makes the first option above look like the direction in which the country is moving: “we find a way to give everyone a job, but median individual real wealth is reduced.”

For instance, the average work week decreasing means that more employers are opting for part-timers… this not only reduces individual income, but also reduces the number of people receiving full-time benefits. One more reason our government should provide a real health care fix… and not the lame, ineffective fixes that seems likely to pass, but the only real solution: single payer health care.

Don’t let the media and special interests fool you with moronically worded polls! If I were asked whether or not I liked Obama’s health care initiatives, I would also say no… not because I like our current system, but because Obama has abandoned single payer, and succumbed to “political realities.” I don’t blame Obama so much as I blame his political advisors, who no doubt have worked hard to temper his campaign promises and forced him to indulge “political realities.” Certainly our president has been forced to deal with so many weighty issues that some compromises have to be made, but health care so fundamentally underlies all of our fiscal and employment problems that single payer is DEFINITELY the one thing he should not compromise on.

Go for the single payer system! Most americans want it, and voted for the presidential candidate who promised he would deliver it. This issue should most certainly rise above “pragmatism!”

Miguel Estrada was nominated by President Bush to the D.C. OF Appeals in

Miguel Estrada was nominated by President Bush to the D.C. Court of Appeals in 2001, but Senate Democrats used the filibuster to prevent his promotion. Estrada would most certainly have been nominated by Bush to the Supreme Court. Senate Democrats know how to play the race card.

Regarding “Cash for Clunkers” … Has anyone considered what this will do to the supply of cheap vehicles that low-income people need to get to the grocery store and to drive across town to work? This is a popular program for those who can afford a new car, but it will only drive up the price of older vehicles due to shrinking supply.

Let me guess…..It’s a vast right wing conspiracy….right?

“Let me guess…..It’s a vast right wing conspiracy….right?”

What is?

If Dems want the show of enthusiasm on the part of their supporters they should put a comprehensive public option firmly on thye table. As long as they contniue to make deals, compromise, and stall people will be bewildered and disappointed, not enthusiastic.

Didn’t the Nazis come to power by disrupting public meetings? This is scary, but sadly given the state of the Republican party, not a surprise.

Nancy, you’re right. Another student of history is this blogger, who gives the teabagging “patriots” story a satirical spin:
http://thatsrightnate.com/2009/08/02/a-patriots-guide-to-disrupting-health-care-townhalls

The caller sounded like he was reading from a script, calling the town hall participation “coordinated political thuggery.” In fact he sounds like the one who’s coordinated.

Why is it a conspiracy that people are showing up pissed off at town halls and tea parties. These are not partisan events. They act like we don’t have a long list of things to be mad as hell about. And since when is being politically active or just plain mad at the government a racist thing? The long arms of the political parties, along with the media, would like to perpetuate this insane left-right, racist blame game trick. Folks, they’re the two wings of the same damn bird!

There will be no bipartisan health care reform, plain and simple – you’d think the President would have learned his lesson from the stimulus fight. The Democrats in committee will give more and more ground to the Gang of Six, dilute the bill until it’s hardly worth the paper it’s printed on and serves only to enhance the insurance industry money machine, and then not one Republican will vote for the final bill. Bank on it.

Unless, of course, Obama and Rahm Emanuel remember where they put their backbones, crack the party whips and concentrate on passing the best bill they know how to write, without the drag of the GOP’s dead weight.

Jack Beatty sounds like a “lap dog” of the Democrat Party. This show could use a little bit of “fair and balanced”.

JP: please be brief, because (may I be so presumptuous) our collective eyes glazes over, whenever someone writes a lengthy screed in the “Comments” section.
Thanks.

JP don’t listen to SL. You often boil our complex problems down into simple realities.

I’m amazed that Ron Brownstein would describe health care special interests as “neutralized” by Barack Obama. Is he JOKING. These lobbyists are swarming congress like flies on three day old road kill on a hot humid day. And those voluntary give backs by Big Pharma and Big Hospital Corp. are just that voluntary offers. And, insurers offer to cover those with preexisting conditions is also a joke. Nothing in the law says they have to offer quality affordable insurance by the CONSUMER’S definition.

All the plans are based on Massachusetts “miracle” universal health insurance law. If you can’t afford insurance, by Massachusetts definition, you can get a waver from the $1100 per year fine. A fat lot of good that does you if the cheapest individual policy you can find is $1100 per month and you gross $40K per year.

Get your clues from American Enterprise Institute.

If AEI (home of the zio-cons and John Bolton) is against an issue, it is good for American.

If they advocate something, we should stay away from it.

Being Patriotic 101!!!

RE: “Cash for Clunkers.”

They will get my 1995 and 1999 Mustangs when they pry them from my cold, dead hands… 8-))

Otherwise, I think it’s a great idea for the psychological boost it gives the country, if nothing else.

I agree with you 100% Ray Johnson. Jack Beatty should petition the DNC to put him on the payroll.

@brianna Wrote “Get your clues from American Enterprise Institute… If they advocate something, we should stay away from it.” — I agree. AEI along with the Heritage foundation endorsed of Massachusetts Health Insurance Law. This is the “health reform” Kennedy, Baucus and Obama support. I guess when it comes to corporate welfare legislation, every Democrat has his or her price.

Joe B., get on with the program. Miguel Estrada is an Uncle Tom (or its Latino equivalent). Only Democrats are the real proponents of colored people, and any colored person who joins Republicans is a traitor to his people. Or so goes the “logic”.
/tongue-in-cheek

Hypocrites and hypocrisy tend to make people mad, or fools people into false assurance. How can anyone trust a politician? Do we not remember the politicians brow-beating the auto CEO’s for daring to fly down to the bailout hearings in Corp jets in order to ask for taxpayer money? How dare they do such a thing we ask? Well! good ole politicians snuck into the defense budget a 550 million dollar deal to buy themselves private jets to flight around in. Mud in our face once again. We don’t care as along as they keep promising us the moon and the stars. So how can anyone trust them on reforming health care? Are we so gullible and hungry for change that we will buy into anything?
Here is the answer to true healthcare for our country if the politicians are the creators or it. Make every politician and govt. official, from Obama down, sign a contract that as soon as the reform passes, they will drop out of their own private insurance and go solely on the new govt. plan. If they are willing to do this, maybe we can trust in something they say for a change.

Mr. Brownstein fails to show any research. The RIGHT ACTION website gives tactics including getting to the meeting before any of the locals. Since they don’t come to debate, they make it plain that they want to stop the debate.

Also, have you noticed how the GOP by & large isn’t meeting with their voters. With cost skyrocketing, how will the voters react come 2010?

The voters found a lot of muscle in 2008. 2010 may be rougher for the GOP.

By the way, the polling firm mentioned by Jack (Lewin or Levin) is a wholly-owned subsidiary of UnitedHealth out of MN.

Thank you for a lively show.

am curious about how the release of the two journalists has been reported on this and other shows.

your website describes it as “And a dramatic homecoming for two freed American journalists.” fair enough.

however, the description i keep hearing is of ‘the women’ being valiantly rescued by former President Clinton.

a lovely fairy tale ending. but is this recounting challenging anyone else’s squirm threshhold?

with regard to deception in art …

didn’t many established artists in the past have workshops in which their assistants would carry out their vision?

Someone alluded to this uproar being Nazi’ish. What is Nazi’ish, or rather totalitarian in origin, is Obama’s administration’s insisting that those of us who oppose this plan are manipulated thugs. This sounds remarkably like Erich Honecker of old, or Ahmadinejad of recent news. What did he say in Iran? All the protesters there were sent by the imperialist American dogs…well, we are apparently sent by the Republican dogs. As a northern European, social liberal immigrant, someone who has supported the Democratic party for over 2 decades, and I am also a physician trained in the US, I find these recent maneuverings of Obama frightening and dictatorial. Edward Murrow said: We must not confuse dissent with disloyalty. When the loyal opposition dies, I think the soul of America dies with it.
Something for everyone on this board to ponder, as well as our president.

These “protesters” are laughable, completely undermining intelligent discourse in the democracy they so vehemently purport to love. These morons actually think that idiotic barking and disruption is the way to win debating points. Oh yeah! The majority of Americans will really buy in to that! Socially incompetent infants also yell and throw tantrums when they don’t get their way.

“Wittle baby’s candidate not wim da ewecshum? Ohhhhhh…Poor baby! Ohhhhhh.” HA HA HA!

A handful of idiots whose cultural intolerance and gullibility causes them to consistently vote against their own interests are not likely to dominate any national discourse for long. Even if they could have significant impact on national policy, they’d just be screwing themselves along with everyone else, so at least the rest of us would get a good laugh out of it.

Just sit back and let these pebble brains put the last few nails in the conservative coffin. Come 2010, plenty enough Americans will know precisely where to place the blame for government inaction: squarely on the shoulders of these fanatical conservatives.

Not A Chance wrote: “A handful of idiots whose cultural intolerance and gullibility causes them to consistently vote against their own interests are not likely to dominate any national discourse for long.”

Not A Chance, I agree. Look at all the liberals/progressives who voted for Obama while holding their noses, which is the equivalent of voting against their interests. Look at the liberal/progressive position on issues like single-payer healthcare, war, gay rights, domestic wiretapping – to name a few – and look at Obama’s stance on these issues. Not A Match!!

Not A Chance wrote:
“Come 2010, plenty enough Americans will know precisely where to place the blame for government inaction: squarely on the shoulders of these fanatical conservatives.”

America as a society, in general, is quite conservative, whether you and I – living in our progressive little bubble here in Boston/Cambridge – like it or not. By the way, why is government inaction (and on which specific issues?) blamed on conservatives, when the Democrats have:
1. a filibuster-proof majority in the Senate,
2. an overwhelming majority in the House, and
3. a Democrat is in the White House?
The President’s approval ratings are quite high. What more, according to you, would the Democrats need to do their job?

This would indicate that the majority of American citizens are behind Democrats, since they voted and gave them an overwhelming mandate. So, why would the conservatives – who are in a minority, according to your calculations – be blamed for Democrats’ non-accomplishments and failures? I do not understand what kind of logic you’re using here, and would appreciate an explanation. On the face of it, your statement comes across as highly illogical and pointing fingers at others (forgetting that three fingers point back at you), but I could be wrong and am willing to be shown the light.

What are the mechanics by which conservatives have tied up Democrats – who have a clear mandate as well as majority – and are preventing them from implementing the agenda on which they ran and won? Could it be that in spite of your and many other people’s unrealistic expectations, Obama is nothing but a centrist and not a progressive further to the left? Let’s blame the conservatives for that too. Or maybe the real Obama has been kidnapped by the conservatives and they have placed a doppelganger in the WH.

“These morons actually think that idiotic barking and disruption is the way to win debating points. Oh yeah! The majority of Americans will really buy in to that! Socially incompetent infants also yell and throw tantrums when they don’t get their way.

Just sit back and let these pebble brains put the last few nails in the conservative coffin. Come 2010, plenty enough Americans will know precisely where to place the blame for government inaction: squarely on the shoulders of these fanatical conservatives.”
-

Wow, Not A Chance. So much name-calling instead of responding to the merit of arguments!! And it’s ironic that the liberals lament that the dialog is sullied and there’s name-calling and mudslinging by Bill O’Reilly and others. Perhaps they need to take a closer look at their own words and the liberal media and how much name-calling happens there.

“These morons actually think that idiotic barking and disruption is the way to win debating points. Oh yeah! The majority of Americans will really buy in to that! Socially incompetent infants also yell and throw tantrums when they don’t get their way.

Just sit back and let these pebble brains put the last few nails in the conservative coffin. Come 2010, plenty enough Americans will know precisely where to place the blame for government inaction: squarely on the shoulders of these fanatical conservatives.”
-

Wow, Not A Chance. So much name-calling instead of responding to the merit of arguments!! And it’s ironic that the liberals lament that the dialog is sullied and there’s name-calling and mudslinging by Bill O’Reilly and others. Perhaps they need to take a closer look at their own words and the liberal media and how much name-calling happens there.

Gee, braniac. Why would these idiots be out there if they didn’t think they could stifle health care reform… or any legislation.

-And if indeed they succeed in their wishes to stop it in its tracks, then aren’t they responsible for the inaction?

The propaganda right-wing organizers use to brainwash these sub-humans states specifically the goal of intimidating legislators to vote against the reform that was mandated by a strong majority in a presidential election.

You’re betting the public will blame legislators for being cowed by fanatics.

I’d bet instead the public will blame the fanatics for forcing their obstructionist agenda on the rest of the country… it’s hardly a difficult argument to make, as videos of these pebble heads will be plastered all over You Tube for years to come.

Health care is a tangible problem now for a majority of Americans. It’s no chore predicting the problem will be proportionately worse by the end of 2010… and those incriminating videos will be played again and again.

I work for a company which allows its employees to vote on a benefits package every three years, and for the last nine years we’ve had to vote one trade-off over another as coverage has dwindled little by little… and my company consistently makes it into Forbes Top 100 Work Places (usually in the top 30). I don’t even have to imagine how the rest of the country is faring in this regard, as the horror stories are absolutely plentiful.

So I’d ask you politely to stuff it. You take your gamble and I’m quite content with mine.

Not A Chance, I’d recommend a course in basic logic for you before you engage in any mature discussion. I can’t really follow your incoherent babbling and rhetoric – perhaps you’ve been affected by the very same pebble-brain syndrome that you mentioned in an earlier comment. In that case, do consult your PCP or shrink ASAP.

“Not A Chance, I’d recommend a course in basic logic for you before you engage in any mature discussion.”

- I’m glad there’s not a chance you’d recommend a course in basic logic, considering the source.

Ho ho ho, ha ha ha. I’m so amused by your stupid pun – I can’t stop laughing. Ha ha ha.

I don’t know if the full information just wasn’t out yet on the St. Louis incident, but to simply say that “scuffles broke out” and six people were arrested is not the full story. In fact, it was SEIU thugs who punched a guy in the face, then kicked him in the head as he was lying on the ground. This was not stated on the program and the context of ‘right wingers going crazy’ suggested that this was something other than what it was — the beating of a man because he was a conservative.

A video has been posted on the internet where one of those “grass-roots protesters” actually turned out to be a local republican party operative, who had even run against the Congressman giving that particular town hall talk. Of course, she introduced herself as just a mom. Nice.

Great show.

I think that we need to find better ways of distinguishing between people who are inadvertently saying things that we believe not to be true and people who are saying untrue things deliberately that we know and they know to be untrue.

For example, media outlets are “reporting” that Sarah Palin has claimed that health care reform would lead to her baby being executed by Obama’s “death panel.”

The proper response to this does not exactly — thank God — fit in with the decorum of public radio. Nevertheless, reporters should be saying it more plainly:

This woman is lying. She is saying something she could not possibly believe is true. (This is the lie part; she’s saying something she herself does not believe.)

We could spend all day speculating about why Palin, why Limbaugh, why Dobbs, why most Republicans in Congress actually are lying about a variety of topics (by the way, Democrats, factually speaking, are not Nazis), but I think it would be good enough if reporters, journalists, became more comfortable using the word when it is so demonstrably appropriate.

Nina are you delusional? I’m all for dissent but what went on at some of those meetings was not dissent. It was a deliberate attempt to keep people from debating or discussing the issues. It was also designed to strike fear into some of the legislators.

Some of these people are not smart enough or informed enough to know that Medicare is run by the government.

Good Going Nina.

Don’t listen to Defenders of US Foreign Policy. You are 100% right.

In USA, half of the people think: “The Police was doing his job” when he arrests an Elderly Prof in his home, just because he raised his voice.

In Tehran, agitaters and protestors hit Iranian Police, throw rocks, destroys property, burns government people during illegal protest marches, and when they are arrested, 1000% media and public is on the side of the Protestors (mostly rich/ethnic minority) who does not want to accept the results of the election.

Let’s Find out What Really Happened on 9/11.

The answer to Iraq and Afghanistan ($1,000,000,000,000/year) sink hole.

Then, this nation will be allright. These people below are not idiots or bunch of dillusionals. They have higher IQ’s, more enlightened than general population.

•Architects and Engineers for 9/11 Truth
•Firefighters for 9/11 Truth
•Lawyers for 9/11 Truth
•Medical Professionals for 9/11 Truth
•Patriots Question 9/11
•Religious Leaders for 9/11 Truth
•Scholars for 9/11 Truth & Justice
•Scientists – Journal of 9/11 Studies
•Researchers – Complete 911 Timeline

If we don’t do that, we will continue living with fear, war, searches, defense contractors and screwed up US Foreign Policy.

Conservatives have made the calculation — accurate, in my opinion — that if a civil, informed, sober, democratic, rational debate on health care reform takes place, they will lose the day.

So, they are doing everything in their power to confuse, frustrate, intimidate, and end that public debate.

The cynicism underwriting this strategy, while contemptible, should not be surprising to anyone who has followed politics for the last 10 or 15 years.

In the end, we depend upon the Democrats to trust that the American people will come around to a health care reform that controls costs and expands coverage. If the Democrats blink, Limbaughism wins.

The sad thing is these people don’t have a clue how badly they’re screwing themselves and the rest of the country.

They’re simply stuffed full of contempt because they’re losing the culture war, and because they have absolutely no conservative leadership with a clue about how to solve a single problem or how to broaden their ranks in the least.

Thus, out of exasperation, they’ve latched onto this cynical, desperate last hope that they can somehow win back some of America by ensuring that any Democratic attempts at solving the country’s problems fail utterly.

This is such incredibly selfish, anti-social behavior as to border on maniacal delusion. It places all of these poor slobs in the same camp as racial supremacists in terms of the approach to solving their grievances.
The whole thing truly is Fascist, in some of the word’s clearest connotations. I’d not have such an extreme interpretation if these people had even an inkling of an idea about how to better the issue they’ve embraced (health care). I’m now certain these fanatics have no real conviction whatever about the issue, but simply use it as a platform for their intolerance.

This is really scary stuff, yet the truly insane thing would be to back down from fighting this stupidity in the least. If terror-mongering by a handful of extremists is allowed to win sway in national politics, then we might as well be Iran or Somalia.

Ms. Stark repearedly said “the banks” voild lose mkoney if loan principals were reduced.

Yes, and no. Remnber ALL the talk of “slice and dice” that has appeared on this program in the last year? Those mortgages are all over the place. If Boston U. has a pension fund it probably holds some mortgage- backed bonds.