Virgil
11-14-2008, 07:56 PM
http://counterpunch.org/cockburn11142008.html
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...Obama’s Poisoned Chalice
Back in the spring Republicans used to chortle at the prospect of handing over power to a Democratic president who would promptly be engulfed in recession. It would start in March of 2009, discredit the new president and prepare the way for a Republican renaissance in 2012.
Six months early, the crash swelled up in September, leaving an incumbent Republican president tarred with the same brush of historic failure as Herbert Hoover in 1932. He may mismanage the sequel, but no Republican will be able to claim it was all Obama’s fault.
Bush is urging the world’s leading economic powers, now mustered in Washington, not to give up on capitalism. The mere fact that an American president should feel obliged to issue this worried advisory shows how desperate things already are and much worse they will soon get.
Each week brings a terrifying lurch, like a house on the edge of some cliff being pounded into slush by a Pacific storm. On the Doppler radar, we can see financial storm after financial storm lined up out there. Next to burst: the credit card overhang, of some $2.8 trillion in consumers’ plastic debt, much of which will have to be written off. The week after? Scores of cities and towns and even states are on the edge of bankruptcy.
This week’s storm center has been the US auto industry, effectively bankrupt. “What’s good for the country is good for General Motors and vice versa,” said GM’s chairman Charlie Wilson in 1952, amid the glorious surge of the postwar auto boom. This week GM’s stock was trading at around $3, and analysts at Deutsche Bank said America’s largest industrial corporation, the ninth largest company in the world, is effectively worthless. Congress seems to be saying, bailout is only for bankers. GM has 266,000 employees. If it goes under, the ripple effect will put 2.5 million Americans out of work.
Drive through any American town and you’ll see hundreds of acres of malls and box stores, almost all of them built in the past 20 years: Target, Best Buy, Circuit City, Home Depot, Borders Books, Linens ’n Things… Each day brings another bankruptcy. Circuit City, Borders, Linen ’n Things have gone. Home Depot is shutting down branches. In my local town of Eureka, northern California, the mall owner, General Growth has gone broke. With malls from Hawai’i to Maine, it was the second largest in America. The US Postal Service, with almost a million employees, and $2 billions worth of red ink this year, is considering the first layoffs, of 40,000 workers, in its history.
Already America’s real unemployment rate, if shorn of statistical tricks designed to conceal bad news, stands at around 15 per cent and is rocketing up. Consumer spending in the third quarter was the worst in 28 years. As the country totters wanly into what promises to be an appalling holiday sales season, Obama and his advisors gingerly finger the poisoned chalice handed them by Bush.
Vivid in their minds is Bill Clinton’s terrible transition, which permanently scarred his presidency. An incorrigible and disorganized procrastinator, surrounded by a self-indulgent, arrogant and inexperienced staff, Clinton left crucial posts unoccupied, ignored burning issues, dithered on policy, offended Congress and by the end of five months had lost control of government.
<snipped>
================
...Obama’s Poisoned Chalice
Back in the spring Republicans used to chortle at the prospect of handing over power to a Democratic president who would promptly be engulfed in recession. It would start in March of 2009, discredit the new president and prepare the way for a Republican renaissance in 2012.
Six months early, the crash swelled up in September, leaving an incumbent Republican president tarred with the same brush of historic failure as Herbert Hoover in 1932. He may mismanage the sequel, but no Republican will be able to claim it was all Obama’s fault.
Bush is urging the world’s leading economic powers, now mustered in Washington, not to give up on capitalism. The mere fact that an American president should feel obliged to issue this worried advisory shows how desperate things already are and much worse they will soon get.
Each week brings a terrifying lurch, like a house on the edge of some cliff being pounded into slush by a Pacific storm. On the Doppler radar, we can see financial storm after financial storm lined up out there. Next to burst: the credit card overhang, of some $2.8 trillion in consumers’ plastic debt, much of which will have to be written off. The week after? Scores of cities and towns and even states are on the edge of bankruptcy.
This week’s storm center has been the US auto industry, effectively bankrupt. “What’s good for the country is good for General Motors and vice versa,” said GM’s chairman Charlie Wilson in 1952, amid the glorious surge of the postwar auto boom. This week GM’s stock was trading at around $3, and analysts at Deutsche Bank said America’s largest industrial corporation, the ninth largest company in the world, is effectively worthless. Congress seems to be saying, bailout is only for bankers. GM has 266,000 employees. If it goes under, the ripple effect will put 2.5 million Americans out of work.
Drive through any American town and you’ll see hundreds of acres of malls and box stores, almost all of them built in the past 20 years: Target, Best Buy, Circuit City, Home Depot, Borders Books, Linens ’n Things… Each day brings another bankruptcy. Circuit City, Borders, Linen ’n Things have gone. Home Depot is shutting down branches. In my local town of Eureka, northern California, the mall owner, General Growth has gone broke. With malls from Hawai’i to Maine, it was the second largest in America. The US Postal Service, with almost a million employees, and $2 billions worth of red ink this year, is considering the first layoffs, of 40,000 workers, in its history.
Already America’s real unemployment rate, if shorn of statistical tricks designed to conceal bad news, stands at around 15 per cent and is rocketing up. Consumer spending in the third quarter was the worst in 28 years. As the country totters wanly into what promises to be an appalling holiday sales season, Obama and his advisors gingerly finger the poisoned chalice handed them by Bush.
Vivid in their minds is Bill Clinton’s terrible transition, which permanently scarred his presidency. An incorrigible and disorganized procrastinator, surrounded by a self-indulgent, arrogant and inexperienced staff, Clinton left crucial posts unoccupied, ignored burning issues, dithered on policy, offended Congress and by the end of five months had lost control of government.
<snipped>