On top of the horrible jobs report that DougJ just mentioned, Calculated Risk has a slew of horrible awful not good news- sales decreased as compared to last year by 1.2% at GM, the manufacturing index plummeted, mortgage applications are flat and refinancing declined, and so on. And mind you, none of this is in a vacuum- global manufacturing is crashing, and the austerity parade in Europe is paying dividends:
You can see why we’re now at the panic stage. The Bundesbank is already very upset about its large claims on troubled debtors, which are backed by sovereign debt as collateral. Yet if financing stops in the wake of a debt restructuring, the result will be to collapse the debtor nations’ banking systems, a process Martin believes would lead to their ejection from the euro. (He makes me look like an optimist!)
So the ECB keeps saying that restructuring is unthinkable. Yet austerity programs are not working; the prospect of a return to normal financing is receding rather than approaching.
If you ask me, the water level has now dropped so far that the fuel rods are exposed. We really are in meltdown territory.
Domestically, the WH is by all appearances paralyzed and unable or unwilling to do anything because the Republicans, the Blue Dogs, and the “suffer little children” brigade in the media have them completely cowed on the issue of spending and job creation:
If I had to guess, I’d say many White House officials would approve of this kind of approach, but tend not to say so. Why not? Because of political realism — the president and his team don’t see much value in pushing a series of proposals that have no chance of passing Congress. An ambitious approach to lowering unemployment was effectively taken off the table the moment Americans elected a Republican-led House. If voters wanted policymakers to focus on jobs they shouldn’t have backed candidates intent on making unemployment worse.
The administration could still push the issue, even if a jobs agenda can’t pass, but Obama’s team see political risks in such an approach — the more the president sticks his neck out, the more he appears ineffectual when Congress ignores him.
But Krugman urges everyone who still cares about the issue to speak up anyway: “As I see it, policy makers are sinking into a condition of learned helplessness on the jobs issue: the more they fail to do anything about the problem, the more they convince themselves that there’s nothing they could do. And those of us who know better should be doing all we can to break that vicious circle. “
This viewpoint was thoroughly reinforced yesterday when almost 100 dems joined with the wingnut caucus to vote against an increase in the debt ceiling. We are well and truly fucked, and barring a miracle, we’re looking at another economic collapse on the heels of a non-recovery.
And the Dems will have no one to blame but themselves when President Romney/Palin/insert wingnut du jour is elected in 2012 and begin to enact more of the same policies that got us where we are now.
Just start drinking and keep a good eye on your garden. It’s you or the god damned rabbits this year. At least we still have plenty of money for bombs.
