Letter: Thoughts about the â€˜former recessionâ€™
Economists, politicians and pundits proclaim â€œThe recession’s over … the recession’s over!â€
If the recession is over, why don’t the rest of us feel better? If the experts are indeed telling the truth, why isn’t there more evidence beyond their â€œhappy talk?â€
So many of my constituents are unemployed, losing their homes, falling even farther behind on crippling credit card debt, and we’re scared, angry and some are becoming desperate. â€œJobless recoveriesâ€ are esoteric and frankly worthless for those whom I serve.
Ben Bernanke assures us that the bailouts worked, and got reappointed. Tim Geithner has slowed the breathtaking pace of government takeovers of private enterprises, and I trust is now paying his own taxes. Vice-President Joe Biden claims that the $787 billion so-called stimulus package â€œis not only working, but is exceeding expectationâ€ by â€œhaving created or saved between 500,000 and 750,000 jobs this year,â€ but who really takes Mr. Biden seriously?
I’m trying not to shout â€œYou lie,â€ but our current administration seems to be proving the adage, â€œPoliticians campaign in poetry, but govern in prose.â€ It seems like a better place to begin a true recovery is by telling the truthâ€”Americans can handle it.
You can either believe what politicians and powerful bureaucrats say or you can trust what you actually see for yourself. The facts, as my Illinois constituents see them, do not confirm the Alice in Wonderland/Bernie Madoff blow sunshine at ’em until the money runs out.
The Bureau of Labor Statistics reports that the unemployment rate is over 10 percent in 15 states, with high-taxing states like Michigan at 15.2 percent, California at 11.6 percent, and Illinois at 10.3 percent. The jobless rate, including those who have stopped looking, is now 16.8 percent.
Congress was pushed to pass the stimulus quickly with the promise that, if they did, unemployment would remain below 8 percent in 2009. Shouldn’t nearly $1 trillion of taxpayer money have more and a better effect than just another broken promise?
According to the Census Bureau, median U.S. household income dropped 3.6 percent to $50,303 last year, the sharpest drop since 1967, and sent income to its lowest point in 12 years. Professor Sheldon Danzinger, at the University of Michigan’s Population Studies Center, points out that second years of recessions are typically worse and predicts a drop of 5 percent or more this year.
We are told by the Fed that the banking system has been stabilized, but $49 billion of bad loans were written off in just the past 90 days, up 85 percent (almost double) from one year ago. Delinquent commercial loans for construction and land are now 21.2 percent in Chicago, with delinquent mortgages at 6.1 percent, according to Crain’s Chicago Business. I shudder to think about the impact of consumer credit card loan defaults.
With bad loans piling up, the FDIC has increased the number of endangered banks in jeopardy of closure to 416. Barron’s Financial News reports that FDIC’s insurance fund has fallen to $10.4 billion, setting the stage for the government agency to borrow up to another $500 billion from the Treasury. Taxpayers now and in the future will again be on the hook.
Yet, even with a scorching stock market rally that has increased the S&P 500 Index by more than 50 percent since March, why has the financial sector, the beneficiaries of the first Bush bailout with our money, gained roughly 140 percent during that same vainglorious stretch?
The taxpayer-sponsored Cash-for-Clunkers Program proved a boon to the U.S. economy, but an even greater godsend for Asian automakers. You and I financed 700,000 new car purchases with Asian car companies selling 41 percent (Toyota with 19.4 percent), U.S. car companies sold 39 percent of the total, and European manufacturers taking the rest. China is currently tooling up to enter the American market in the next wave with a big chunk of money provided by multibillionaire Warren Buffet.
Dollars-for-Dishwashers is the next artificial, debt-fueled stimulus program ready to be rolled out. Our children and grandchildren will pay back billions in debt incurred so that our friends and neighbors can buy washing machines, central air conditioners, furnaces, refrigerators, freezers, water heaters and heat pumps. Politicians and bureaucrats will justify this largesse by requiring the Energy Star rating for environmental efficiency.
According to the National Association of Colleges and Employers, only 20 percent of 2009 graduates who applied for jobs landed one by graduation day, compared to 51 percent of 2007 graduates.
But most of all, the impact of the political and economic turmoil of the last two years is reaching deeply into the psyche and social fabric of our fellow countrymen. More people are delaying marriage and home-buying, turning to carpools just to get stuck in ever-worsening traffic, staying put but fighting constantly escalating property taxes rather than moving to new cities. The White House says that it’s a â€œplausible scenarioâ€ that by Thanksgiving, 50 percent of us could catch H1N1 flu and 90,000 Americans could die from it. Do you wonder why suicides are increasing?
If it were my decision alone to set our priorities, next to our spiritual health, I would focus on jobs rather than medical healthcare. With higher income, more people and employers can afford healthcare.
Sarah and I have always believed and taught our children that incentives matter: work hard, treat others respectfully, stand against corruption, rein in your appetites and productive results will occur.
Is it selfish for those of us who follow the rules and find it hard enough to take full responsibility for our own families’ actions and welfare to resent being forced by the Obama-Reid-Pelosi government, elected by the majority of Americans, to pay for other people’s mortgages, buy their clunkers, and soon their appliances?
Let’s face it, we are being coaxed into accepting the notion that â€œless badâ€ news is good news. We were promised better than this during the campaign more than a year ago, i.e. better economic conditions and a new era of bipartisan leadership. It is obviously not here yet; we are patiently hoping for change.
Senator Chris Lauzen