The next financial crisis? Didn’t we just have one, you ask?
As President Obama travels to Grand Rapids, Mich. today for all the wrong reasons, I wanted to recommend a documentary to you. It was recommended by one of our readers, who goes by Techie.
At 47 minutes, it’s not short, but it will feel that way, because it is riveting.
The documentary presents a theory about what has happened to our economy. It all makes perfect sense in retrospect, though few saw it coming. The film features the few who did.
The United States is addicted to bubbles. The Dot Com bubble drove the economy for a while, and after it burst, we got the housing bubble which, as you found out last time you thought about refinancing, also burst.
And now the scary part.
We’re currently in a credit bubble, and when it bursts, nothing can save us. Because the next crisis will be caused by the very medicine the government uses to fix the economy: Low interest rates and stimulus spending. If the crisis is caused by our deficit being too high, we cannot run up the deficit to fix it. And interest rates are as low as they can get.
Predictions made in the documentary, filmed in 2010, are already coming true.
One of the analysts featured is former U.S. Comptroller David Walker. I covered Walker sometimes when he testified before Congress. He always had this weird thing about him: he made perfect sense and backed it up with numbers. Lawmakers could ignore him, but I don’t remember them refuting him.
Here’s what he said A YEAR AGO in the documentary.
Today the United States is rated triple A, but if it doesn’t start taking steps to put its financial house in order, that triple A rating will be lost – it’s only a matter of when and how quickly.
Well, not bad for crystal ball gazing.
Which brings me back to Obama. The president, as you well know, has provided no leadership on the deficit. Reducing the deficit is about cutting the growth in entitlements. That’s what it’s about. That causes political pain. And this president, despite all the baloney about change and his willingness to be a one term president, is not about political pain.
And he’s not about seriously restructuring entitlements. It’s not what he believes in.
Here’s what White House Press Secretary Jay Carney said today on the way to Grand Rapids, where the president will visit a plant that makes batteries for electric cars.
While at Johnson Controls, the President will highlight the key role innovative technologies will play in helping automakers achieve the historic fuel economy standards, establishing U.S. leadership in advanced vehicle manufacturing, spurring economic growth and creating high-quality domestic jobs in cutting-edge industries across America.
Johnson Controls, the White House brags in a press release, was selected as part of the stimulus “to receive $300 million to build domestic manufacturing capacity for advanced batteries for hybrid and electric vehicles.”
So Obama is headed to a company which got a debt-financed gift to make cars nobody wants in order to help automakers satisfy a fuel economy mandate that will cost the the auto industry huge sums, kill people in lighter cars, and have no measurable impact on global warming, in the grand scheme of things.
It’s exactly why the economy is going to Hell.
Walker says we can still save ourselves. I pray he is right.
We can do it. But we need to do it soon, because the clock is ticking, and time is not working in our favor.
I hope you have time for the video.
11 thoughts on “President Obama and the Next Financial Crisis”
Keith, can’t wait to watch the vid, though I already know ‘llI agree with most everything it says. This last great bubble burst—the credit bubble—will be a gully washer. But will lead to curing what ails us. BTW, there’s no way of avoiding it at this point, imho. We’re too far down the road of credit. But we may be able to mitigate the worst of it.
Ben Bernanke needs to go and go soon. He has single handedly done more to wreck the economy than any one man should be allowed.
Starting off with the collapse of the World Trade Center buildings was depressing, then the message went downhill from there.
OK, no one can disagree that the world economy is in big trouble and the US must put it’s fiscal matters to the forefront.
What the heck does anyone expect ‘us’ to do about it? other than the ballot box and one vote, we’re hostage to the big DC machine that guides and controls most of our lives. We complain, write e-mails, attend town halls with our elected officials and then…. they do what they want anyway.
The President’s speech today was a fire-burner; he blamed everyone but himself and said he was “frustrated” by the lack of statesmanship or American patriotism or something by the people who oppose his agenda.
We’re frustrated, too. We showed that frustration last year at the ballot box and most of Washington ignored our expressions. They are still castigating anyone who wants to balance the budget, cut expenses and show some restraint in the making of laws and regulations that we don’t want.
We all take it personally when our elected officals ridicule our intentions, when they describe our motives as the basest of humanity and consider us no less than the foreign terrorists that want to destroy our beloved country.
We will do what we can, again, we haven’t given up yet. We’re mad as h*ll and we’re watching. 2012 will be a watershed year in politics.
That comment deserves a standing ovation srdem. You absolutely nailed the mood of America.
And this to the madness:
“”I understand why extending unemployment insurance provides relief to people who need it, but how does that create jobs,” Wall Street Journal’s Laura Meckler asked Jay Carney at Wednesday’s WH briefing.
Carney responded: “Oh, uh, it is by, uh, I would expect a reporter from the Wall Street Journal would know this as part of the entrance exam.”
Then Carney went on to say he “estimates that unemployment benefits could create up to one million jobs.”
This is the kind of math I just don’t understand.
P.S.- Keith, I’m glad you took the time to look at the video.
I don’t know about create–but this sure keeps a lot of grocery clerks, gas station attendants, etc working and people surviving jumping between the lilypads as many do these days.
Read about the Jenkyll Island meetings and the Rothchild family and it will be clear that the republicans are playing around with the U.S. economy through their banks. The Federal Reserve is not a reserve but a private bank thaat makes money during a carisis and the country becomes endebted to it. Money does not disappeaar. It changes hands.
As an election is looming the republicans want to make Obama look bad. They do not want him to make money l by taxing the rich. They want him to borrow from the reserve and make this group richeer and under their control.
We need to get rid of this guy Obama, and I don’t mean in 2012 by voting republican, we’ve played that game long enough. It will most probably be too late if we wait a minute more to act. Whole states are being wiped out and he’s out with Tiny Tim trying peddle up support for a Euro bailout which would sink all of civilization into a Weimar style Hyper-Inflation… This is a disaster situation for a major portion of otherwise productive and decent American people and it is our moral obligation to act on their behalf to remove this nut job from office in a timely manner. There are the necessary provisions in our constitution to remove a president for being deficient for the purposes of carrying out his obligations and it would not be hard to apply them to this man, those provisions exist under the 25th Amendment, Article 4.. We are running out of time but we have a clear hand being extended to us from our Pacific neighbors in China and Russia, as they are beginning some of the most aggressive economic and scientific developments ever before seen and need our partnership to extend that development into the Bering Strait Tunnel project which has been spoken about for over a century. Watch this video as these people have figured out the strategic importance of these recent developments in the Eurasian world and as they (could) relate to our United States. http://larouchepac.com/node/19612
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