It was appropriate for Meredith Whitney to title her latest 600-page report for her investment clients The Tragedy of the Commons. That title was borrowed from an article written in 1968 by Garrett Hardin and published in Science magazine, illustrating the ultimate failure of people hoping to live off the incomes of others eternally.
When Zacks Equity Research announced on Monday the failure of two more banks in the current recession, the silence was deafening. The report blamed the usual suspects: “tumbling home prices, soaring loan defaults, and a high unemployment rate continue to take their toll on such institutions.”
Remember all those jobs the stimulus law supposedly created? Well, “tens of thousands” of them, reports the New York Times, are going to vanish “within weeks unless Congress extends one of the more effective job-creating programs in the $787 billion stimulus act: a $1 billion New Deal-style program that directly paid the salaries of unemployed people so they could get jobs in government, at nonprofit organizations and at many small businesses.”
Organized labor, like the octopus of government, ignores the realities of ordinary life. America is in the midst of a depression and unemployment is a profound problem in much of our nation, particularly in those older industrialized regions which have come to be called the “Rust Belt.” Big unions, so present in American elections with money and foot soldiers, extracts its own irregular benefits and protections as the price of political support.
Despite the wave of popular anger over the ongoing recession (no, it hasn’t ended, as just about everybody outside the Beltway has figured out by now) and the enormous expansion of government debt that is sucking the private sector dry, President Obama is refusing to contemplate extension of the Bush tax cuts for America’s high earners.