I’ve been thinking about unraveling. Actually I’ve been thinking about the Obama administration, unemployment, housing, Afghanistan, our economic/ financial messes, the coming November elections, October surprises, and sand. Sunday I was gone all day. I went to church, I stayed for Sunday school, I went out to eat, and I attended a memorial service for a long time friend, Bud Elkin. I thought I looked pretty good in my khaki slacks, a white knit golf shirt, and my burgundy colored sweater over the top. I needed the sweater because it was cool – Fall was rapidly descending on us here. What I didn’t realize was that I had snagged the sweater around the side of the waist band. One thread of the wool yarn had apparently broken and as the day progressed, I was coming apart at the seams – literally! The progression of the unraveling was brought to my attention by numerous people during the day. Each time I thanked them for the information, but I kept TH*NK*NG why was the public not so astute at assessing the unraveling of the Obama Administration, and the US economic situation.
You see we have officially been in a recession (make that a depression) since the last quarter of 2007. Now we are being informed that the “economic dislocation” (What a lovely - and innocuous - way to describe our mess, don’t you TH*NK?) had ended July of 2009, well over a year ago. The Federal Government and the Federal Reserve Bank had sewn a few TRILLION here and there into the major money center banks, the investment banks, Fannie Mae and Freddie Mac, the US insurance giant AIG, and the US automakers. Not much – as in nothing – had been divided out to main street America – nothing except increasing the time to draw unemployment to 99 weeks! We have been, and are being inundated, with numbers, graphs, and stats that support their claimed recovery. Do you feel this first downturn of the 21st century is behind us? I sure don’t. Please read on.
It is normal for members of a presidential team to depart during the course of the term of the President. These are captains in their respective fields who traditionally make fortunes in the private sector. They inform us how they sacrificed much (in money and wealth) to become public servants. Trust me that they don’t need to worry about paying for their next Starbuck’s latte. The tradition has been for many to withdraw during the last few months of an administration. For the Obama team, the tenure span has been diminished to less than two years. It looks like these are heading for the lifeboats.
Peter Orszag, the White House Budget Director, left in June. Christina Romer, Chairman of the President’s Council of Economic Advisors, left in September as did Larry Summers, top economic advisor to the President. That leaves only Timmy Geithner as Treasury Secretary on the economic team. White House Chief of Staff Rahm Emanuel is going back to Chicago (for the Mayor Daley’s job?) as is senior advisor David Axelrod to run political campaigns. How many military commanders have been reshuffled or relieved of their commands? When will Secretary of State Hillary Clinton “return” to her home in New York and begin work toward a Presidential run in 2012? Even the President’s wife, Michelle, is apparently not happy with their move to 1600 Pennsylvania Avenue! These departures speak silently, but loudly about how things are really going.
Unemployment figures “improved” to a 9.5% rate - until this Thursday that is. Everybody knows the real number is at between 22% and 24% when you figure in the underemployed, those whose benefits have lapsed, and those who have given up looking. Housing is stagnant. Foreclosures have stalled only because of glitches in who is actually holding the valid title to the packaged mortgages. The most recent “good news” was that housing (construction) starts increased in August. What we were told only in the micro-footnotes was that “the new construction” included rental construction, not just single family homes. As more people lose their homes, they had two choices - move in with family, or become renters. Our troops have been moved out of Iraq to next door Kuwait except for the 100,000 or so advisors, instructors, and paid private sector mercenaries. Afghanistan has a “new” commander, General Petraeus, who has vowed their will be no graceful exit next July (as we have been promised).
These “truths” of our real situation are being reflected in the changing poll results and predictions for the coming mid-term elections in November. It is likely that the Republican Party will regain control of the House of Representatives. Fifteen US Senate seats are now in play. October is known for its surprises. I wish I could predict what is coming at US/ us first. An Israeli (US) attack on Iran, Gaza, Jordan, Syria…? A major stock market “correction” of greater than 20%? A significant downward spiral of the Dollar revaluation to other world currencies? An outbreak of war on the Korean peninsula? The Federal Reserve being forced to purchase all the failed rollovers of maturing US government debt instruments? Inflation? Deflation? What will become the rock foundation for this elusive recovery? Will we see any changes for the better?
I TH*NK about a hymn that we just sang in church: “Upon this solid rock I stand… all other things are sinking sand… all other things are sinking sand.” Sinking sand? Humm… Time will tell…
I’m Fred Cederholm and I’ve been thinking. You should be thinking, too.
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