Tuesday, December 13, 2011

Living in dead economy

A euro zone that somehow stays afloat but can't be reformed, banks awash with cash that don't lend, and incoherent economic policy. We've only found a sticking-plaster solution to our crisis

Jobs, rather than debt, are the core problem afflicting the United States. This is what the Federal Reserve declared on August 10, 2011 when it confirmed what many of us have feared: The country’s economy is stuck and without drastic action won’t move for at least two years. As an unprecedented statement by the nation’s central bank, it was a clear signal that the jobs crisis has no end in sight. It also serves as a plain message to elected officials: You are the only ones who can fix this mess.

The longer the economic crisis goes on, the less credible sticking plaster solutions become. Four years in, Europe is heading into a nasty recession, China is flirting with a hard landing, the governor of the Bank of England is warning of a systemic banking crisis and George Osborne has announced spending cuts that will continue for the next six years. The United States is the one part of the world where the news has been better recently, with signs of life returning to the housing market and a welcome fall in unemployment.

Even as stocks swoon and worries mount, our president continues to hold his head high -- a little too high, in fact -- every time he strides to the podium. This makes him the anti-Princess Di. He is always triumphantly chin up, just as she, poor thing, was always tremulously chin down. Given the lousy state of the economy, he might try to be a little self-effacing himself. He should stop acting as if he expects his every word to be greeted with rapturous applause. Read more....

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