Today's featured guest, National Economic Council Director Dr. Larry Summer, answered, "We're in a different place," referring to Mr. Gregory's initial question on whether the recession is over. Dr. Summers is correct on more levels than even he realizes. It's like the one solid truth that everyone believes. Financially, we certainly are in a different place, in fact, we're all over the map.
President Obama, this week in discussing race, referred to the unfortunately Gates-Crowley situatution as a 'teachable moment.' Well, the interview with Dr. Summers was certainly one of those with regard to the economy. One should be suspect of any layman who completely disagrees or agrees with what the Obama Administration is doing in trying to fix the economy. There are so many facets in deficit, so many institutions holding toxic assets, so many feelings with the rise and fall of the Dow. In conversation, you say 'off on a tangent' meaning the point isn't completely germain to the conversation, but when discussing the economy, tangents are just other causes for anxiety - main point being that no one really has a complete handle on it all. However, Dr. Summers provided hard truths and hard defenses as to where we are now.
First and foremost, he said that the job situation will not get better for a while, that jobs are always the last to bounce back after a recession. It's the ugliest reality, with which we have to deal. Unemployment benefit aid is running out for those without a job, unemployment higher than expected (9.5%) and that also translates to the people with work who are now continually balancing themselves on a wobbly base. It's easy to criticize the stimulus plan, but Dr. Summers is correct that without it, many more teachers and policemen around the country would have been laid off, and even though new construction projects are still at a crawl, the stimulus is pumping cash into new building. Speaking of construction, it is the one manufacturing industry in this country that can serve as a true barometer of how we're doing. Construction is bought and sold in country. It's not like a car made and then shipped someplace else.
And it can not be emphasized enough, as it was during the interview, that when the Obama Administration took office, the economy was in much worse straits than was originally thought, which makes all statistical indicators guesses at best. With that said, Dr. Summers clarified that the Administration was always clear that there was no clear picture of where the economy was when they started - a worrisome political answer.
And this gives an opening to conservatives who criticize President Obama's deficit spending. In all fairness, where were these cries when the Bush Administration enacted its tax cuts or the prescription drug benefit, which didn't include negotiating with the pharmaceutical companies? No one has paid for that yet so no one is exempt from big spending. Unfortunately, Americans have short memories... At least, as Dr. Summers pointed out, people are speculating when the recession is going to end and not if we're going into a depression.
What is essential is investment and that is what the stimulus is! For long term health, we do need investment in our schools, solar and alternative power, and reforming healthcare as Dr. Summers pointed out, 'crucial foundation for the country's future.' That's where the focus has to be - on the future because the 'now' is an alternate reality, certainly a different place.
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