You know the economy is in the tank when officials hail the loss of 539,000 non-farm jobs in the U.S. economy during the month of April as good news. President Barack Obama termed the latest unemployment figures "somewhat encouraging," despite the fact that unemployment rose from 8.5 to 8.9 percent nationally. Obama was somewhat encouraged in part because most economists had expected April job losses to be higher than 600,000, as had happened in each of the first three months of 2009.
President Barack Obama revealed new details in his fiscal 2010 budget on May 7, with a statement saying: “We can no longer afford to spend as if deficits don't matter and waste is not our problem. We can no longer afford to leave the hard choices for the next budget, the next administration — or the next generation.”
Back in the bad old days of the Great Depression, the breezy assurance of the Hoover Administration that “prosperity is just around the corner” became, as the years of depression dragged on, a mainstay of Vaudeville comedians and Hollywood screenwriters alike. As things turned out, elusive prosperity did not re-appear until after 16 years of depression and world war, and even then was not fully in evidence until after Congress finally removed all wartime price controls and slashed government spending by a third. An entire decade was squandered by eager-beaver social engineers in the Hoover and Roosevelt administrations, who could not be shaken from the notion that more government spending and controls on market activity could solve the economic crisis — a crisis that had been created by government in the first place.
In order to meet government out-of-court restructuring demands and to be eligible for more government financing, Chrysler agreed last week to a deal that gave the United Auto Workers union 55 percent ownership and a seat on the board of directors of the restructured company. The UAW stands to exercise major influence on the U.S. government during the impending bankruptcy proceedings.
The handwriting has been on the wall for Chrysler for many, many years, but it appears that the storied 84-year-old automotive corporation, almost three decades after its last government bailout under CEO Lee Iacocca, has reached the end of the line. After the swift breakdown of last-ditch negotiations yesterday, Chrysler Corporation and its creditors are in court today to begin proceedings for the first-ever bankruptcy filing by a major U.S. auto corporation. For the moment, the White House and Chrysler officials are still chirping about a well-ordered bankruptcy that would allow a leaner, retooled Chrysler to emerge from receivership in 30 days or so. But that won’t happen.
Despite rosy earnings reports from some closely watched corporations, the Great Recession is far from over, according to the latest economic data from the Commerce Department. America’s GDP, which shrank at an annualized rate of 6.3 percent in the last quarter of 2008, was expected to decline at a rate of about 5 percent for the first quarter of this year. Instead, it fell 6.1 percent, suggesting that last year’s meltdown continues more or less apace.
New revelations from the New York State Attorney General’s office have all but proven that Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Hank Paulson committed bank fraud crimes in the case of the Merrill Lynch/Bank of America merger that took place last year. New York State Attorney General Andrew M. Cuomo revealed that Paulson and Bernanke illegally suppressed adverse financial data on the merger and threatened to replace the Bank of America CEO and board of directors if the company backed out of the Merrill Lynch merger. “Secretary Paulson has informed us that he made the threat at the request of Chairman Bernanke,” Cuomo wrote in an April 23 letter to Congress.
Item: The Washington Post for March 31 reported: “The billions of dollars spent in U.S. aid to Afghanistan over the past seven years have been largely wasted, Secretary of State Hillary Rodham Clinton said Monday. ‘For those of you who have been on the ground in Afghanistan, you have seen with your own eyes that a lot of these aid programs don’t work,’ she said. ‘There are so many problems with them. There are problems of design, there are problems of staffing, there are problems of implementation, there are problems of accountability. You just go down the line.’ Clinton called the amount of money spent without results ‘heartbreaking.’”