So if your looking for any little bit of a piece of a slice of good news, take heart in the fact that today's first two guests, Senators Lindsey Graham (R-SC) and Chuck Schumer (D-NY), can identify clearly the problems we're facing. Part of recovering is first understanding what the problems are. Yes, that's a great stretch but we have to start somewhere. Here's where it all collapses. Senator Graham accurately stated that the key is to get credit flowing again and then said that no amount of money printed by the Federal Government is going to solve this. That is where he logic comes up short because the banks, who have no confidence in the economy, do not have any money to lend to get credit flowing. Where is the only place the banks are going to get that money? It's from the government. graham says getting credit flowing is key - no amount of money printed in washington is going to solve this. When are Republicans going to come to grips with the fact that no one, and we mean no one, has ready liquid assets, with the exception of the government. This what those three Republicans Senators that voted for the stimulus bill conclude.
And the stimulus should have been an even larger number... The numbers are so fictitious that our imaginations haven't caught up to what it will actually take. Senator Schumer did touch on the fact that most economists feel that more money is needed, but that the Democrats couldn't get more because of the political wall they ran into. To that point, Former Republican Speaker Newt Gingrich stated later in today's program that we must break the system in a bi-partisan way. And though he said that has to happen on both sides of the aisle, it looked as though a visible pensive (a posture we do not recall ever seeing) Speaker Gingrich pointed this more toward his own party. He followed this up with saying the it is irrational to not want the President to succeed (you know the rest of that story...).
With that said, we do agree with Senator Graham when he said that we can not keep throwing good money after bad. To stop that, the government has to go to these few too-big-to-fail entities and figure out one number, AIG for example. Figure out a number to get it back on its feet. If the executives can't make it work at that point, take break the assets and break up the company into many smaller ones with the prospect of redistributing that targeted TARP money.
All the above is in concern with private enterprise, but what about public enterprise? That's where the new spending bill comes in along with the ever-roaring debate about earmarks. Yes, of course, MTP had a clip of Senator McCain at the ready, who incidentally called out Senator Graham for an earmark, and it's important to know what that earmark is. Senator Graham said it was for a convention center in Myrtle Beach. Think about that for a moment... Is that wasteful spending or is it a construction project that will bring jobs and potentially facilitate greater commerce in hard hit vacation area, hence helping the state itself generate more revenue? Senator Graham said he was going to continue to fight to leave it in the bill. Remember, right now only the government has the money to make that happen. If it is any consolation, all of the 9,000 'earmarks' are posted online with a Congress person's name attached so you can decide for yourself. We at least appreciate the transparency.
As we mentioned earlier, Mr. Gingrich was part of today's panel that also included "Lords of Finance" author Liaquat Ahamed; CNBC's Erin Burnett; and editor-in-chief of U.S. News & World Report Mort Zuckerman. If the lack of bluster from the former speaker was not sobering enough, it was Mr. Ahamed who started the conversation off by flatly stating that a depression certainly could happen again.
As Mr. Gingrich pointed out, this is not politics as usual, that it has been 80 years - three generations - since something like this has happened and the consensus around the table was that President Obama is taking the Roosevelt New Deal approach and throwing a ton out there and seeing what sticks. What else is he supposed to do? It is all too much for people to digest, Ms. Burnett mused, but what she failed to say is that the American people are, by this time, desensitized to all these numbers. At this point, just do whatever it takes, right?
We started today's column with a sliver of good news so we figured we'd end it the same way. The silver lining for the United States is that this abysmal state we're in is global baby, everyone's cutting their losses and walking away - no one's exempt. And we're not getting the worse of it. Imagine living on an island in the Northern Atlantic in the winter, a five-hour plane ride from the continent, where no money comes out of the ATM with jobs and food in short supply. That describes Iceland, which just for fact sake, has a 99% literacy rate. At least the U.S. isn't that.
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