EconomicCrisis.US

In 2008 and 2009, Washington strove to save the economy. In 2010, Americans will get a clearer picture of how Washington has changed the economy.

Only as the recession recedes will it become fully evident how permanently the state’s role has expanded and whether, as a consequence, a new, hybrid strain of American capitalism is emerging.

One thing is clear: The government is a much bigger force in today’s U.S. economy than it was before the financial crisis. “The frontier between the state and market has shifted,” says Daniel Yergin, whose 1998 book “Commanding Heights” chronicled the ascent of free-market forces starting in the 1980s. “The realm of the state has been enlarged.”
[USA INC]
Previously in USA Inc.
Read the rest of this entry »

Paul A. Volcker visited nine cities in five countries in the past eight weeks to warn that bankers and regulators “have not come anywhere close to responding with necessary vigor” to the worst economic crisis in 70 years.

“There is a lot of evidence that financial weaknesses brought us to the brink of a great depression,” Volcker, 82, said Dec. 8. at a conference in West Sussex, England. He told executives there that the changes they’ve proposed are “like a dimple.”

Two years after the start of the deepest recession since the 1930s, no U.S. or European authority has put in force a single measure that would transform the financial system, based on data compiled by Bloomberg. No rule- or law-making body is actively considering the automatic dismantling of banks that Volcker told Congress are sheltered by access to an implicit safety net.
Read the rest of this entry »

President Barack Obama warned Thursday that the U.S. economy was running up to 8 million jobs short of where it should be, and that filling even part of the hole would take fresh action from his administration.

“You’ve got essentially a 7 million to 8 million gap between where jobs should be for relatively full employment and where we are,” Obama said in a White House interview with the Free Press and USA Today. “That is my greatest fear … we don’t close that gap.”

In a 25-minute discussion in the White House Map Room just hours before he hosted a jobs summit with business, government and policy leaders, Obama touted the need to balance spending prudence with more spending to stoke an economy still prone to a “double-dip” recession without it. He said the rescues this year of General Motors and Chrysler and other steps were needed to stabilize the economy.
Read the rest of this entry »

From Enron to Madoff, bear markets to financial crises, bubbles to bailouts, jobless recovery to double-digit unemployment — this has been an economically brutal first decade for the new millennium.

It has bred doubt about the resilience of the American economy. It has stirred calls to dust off New Deal designs.

It has turned our world upside down.

After all, the 1990s were a jobs machine, a deficit destroyer, a stock market utopia. We even deflated the Y2K threat.

It seems now that all those zeros on our new calendars were trying to warn us about the encroaching fleet of financial Hindenburgs.
Read the rest of this entry »