Allen L Roland

President Obama inherited a Bush recession but instead of initiating badly needed banking reforms ~ Obama chose a top down Wall Street bailout which accelerated Main Street's agony to the extent that it is now an Obama Depression:

Obama's top down banking rescue has temporarily bailed out Wall Street and left Main Street still in ruins ~ setting the stage for a major Depression. As N.Y. Attorney General Cuomo's recent report shamefully notes: "Two firms, Citigroup and Merrill Lynch suffered massive loses of more than $27 billion at each firm. Nevertheless, Citigroup paid out $5.33 billion, in bonuses, and Merrill paid $3.6 billion in bonuses. Together, they lost $54 billion, paid out nearly $9 billion in bonuses and then received TARP bailouts totaling $55 billion. For three other firms ~ Goldman Sachs, Morgan Stanley, and J.P. Morgan Chase ~ 2008 bonus payments were substantially greater than the banks' net income."

Make no mistake about this ~ Government tax revenue is now the worst since the great Depression, the federal deficit has ballooned to a record $1.8 trillion, unemployment continues to skyrocket and we are obviously in a major Depression. The sooner Obama stops wishful thinking and faces this reality ~ the better.

William Gayle, co-coordinator of the Tax Policy Center, sums up Obama's dilemma ~ " If the economy doesn't recover soon, it doesn't matter matter what your social, economic and political agenda is ~ There's not going to be any revenue to pay for it ! "

Columnist Mike Whitney also says let's Skip The Happy Talk ~ This Depression is just beginning " What does all this mean? It means the consumer is down-for-the-count. His credit lines have been cut, his home equity eviscerated, and his checking account swimming in red ink. That spells trouble for an economy that's 70% dependent on consumer spending for growth....which brings us to another interesting point. The uptick in GDP last quarter was almost entirely the result of the surge in government spending; ie "fiscal and monetary stimulus". How long can that go on? How long will China keep slurping up US Treasuries rather than let their currency rise? http://informationclearinghouse.info/article23182.htm

This is no longer a free market ~ it's a manipulated market in servitude to the major banks of Wall street ( particularly Goldman Sachs ) while the secretive Federal Reserve holds the world in financial bondage.The latest stock market rally was, in essence, a short covering rally. Eventually Obama's lack of backbone in implementing true Wall Street reform, instead of attempting to re-inflate the credit bubble that just burst, will result in the now obvious Depression being appropriately called the Obama Depression.

It's time for a primer on the present state of the American economy as well as what's really happening on Wall Street. In that regard, the Renegade Economist went to New York to hear Dr. Michael Hudson's views on the present state of the US Economy ~ this is a must watch ten minute video interview. http://informationclearinghouse.info/article23191.htm

Congress may be on recess but the people are in session and they're getting mighty angry. As Mike Whitney concludes ~ " The US consumer is broke; the tank is on empty. Household equity has declined by 94%, jobs are scarce, personal savings are rising, and families are cutting back and hunkering down. It will take a decade or more before household debt is whittled-away to a point where people can consume at pre-crisis levels. Another stock market bubble won't change a damn thing. This Depression is just beginning ! "

Allen L Roland http://blogs.salon.com/0002255/2009/08/05.html

Freelance Online columnist Allen L Roland is available for comments, interviews and speaking engagements ( allen@allenroland.com )
Allen L Roland is a practicing psychotherapist, author and lecturer who also shares a daily political and social commentary on his weblog and website allenroland.com He also guest hosts a monthly national radio show TRUTHTALK on www.conscioustalk.

Cartoon courtesy of Pat Oliphant / Washington Post

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Allen Roland’s weblog: http://blogs.salon.com/0002255/
Website: www.allenroland.com
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