Bernanke, Obama 'averted Great Depression 2.0': report
But "You Call This a Recovery?"
Bernanke, Obama 'averted Great Depression 2.0': report
Joseph N. DiStefano
"The most aggressive fiscal and monetary policies in history" worked, argues West Chester-based Moody's Economy.com analyst Mark Zandi and ex-Federal Reserve vice chairman Alan Blinder, now of Princeton University, in this 30-page review, "How the Great Recession Was Brought to an End."
Despite "critics calling them misguided, ineffective, or both," and the fact "more government support may [still] be needed," Federal Reserve Chairman Ben Bernanke's "quantitative easing" of the money supply, Obama Treasury secretary Timothy Geithner's bank "stress tests" designed to force lenders to set aside enough reserves to cover their losses, and the Bush Administration's Targeted Asset Relief Program to temporarily finance failing banks, automakers and the occasional big insurer have had a "huge" impact in saving nearly 6 million jobs and preventing a ruinous deflation and negative growth, Blinder and Zandi argue.
Zandi also credits the Obama and Democratic Congressional stimulus programs with "very substantial" effects, creating another 2.7 million jobs.
But if the economy's been cured, why are so many people still out of work? asks Zandi's colleague Michael Bratus in his article, "You Call This a Recovery?"
INCORRECT. Actually it was a combination of things that averted the 2nd Great Depression. First, lets look at some general causes of the first Great Depression and how they closely match those of the “Almost” 2nd Great Depression: 1) Unrealistically low interest rates maintained by the “Federal” Reserve Central Bank created financial “bubbles” 2) Lack of legitimate “common sense” oversight into lending practices by the Financial community (see Community Reinvestment Act) 3) Lack of protections within the Financial community to contain the spread of failures from one section to another (see the 1999 Financial Modernization Act which repealed the 1933 Glass Stegall Act protections) 4) International trading of securities and sovereign debts created by the “bubbles”. Obama didn’t save us from anything directly…no President really can. However it was a combination of A) TARP, a Bush product, (which soaked up much of the toxic assets on the books of lenders (which prevented them from lending due to mounting losses). B) “Quantitative Easing” which is essentially printing money that isn’t backed by anything (risk of inflation and M “values”) but increased the amount of currency in circulation C) STIMULUS, a Obama product, did less then either TARP or “Quantitative Easing” (especially considering only 50% of STIMULUS has been spent). That being said, there is NO GUARENTEE that we will emerge from this Recession any time soon. In fact, though a Double Dip isn’t necessarily in the cards, an “L” shaped economy is most likely. The one thing that IS GUARENTEED is all these efforts are on the backs of taxpayers and only help the large financial institutions that benefited from the taxpayer bailouts and the taxpayer will have little to show for it beside higher taxes and tighter lending standards.
Just delayed it! The economy is a house of cards built on smoke & mirrors! The Federal goverment is debt up to its neck with the National debt and unfunded entitlement programs, Most states are broke or in serious trouble, even your local townships are going broke. But I guess Bernake will just keep print money until the hyperinflation starts and the dollar is worthless becuase there is no real growth.— edith bunker
The decisive acts of President Bush and President Obama using Keynesian stimulus as a counterbalance to the private sector collapse is deservedly acknowledged and re emphasized. The tea party anti intellectual attack on elitists have to explain themselves in greater detail than lurid slogans prominently featuring death. Death Panels, Death Taxes, and of course the retro: Better Dead than "fill in the blank". While ignorant defenders of the privileges and power of the oligarchs who continue to loot the Republic blame the poor and the powerless, like ACORN and so called dead beat unemployment insurance benefit cheats, the truth is that the Obama administration acted heroically to go against the grain to do the right thing. History has been written and will not be fooled by the crazies and the bitter losers of a political election that put the Democrats into power just when we needed them most.
