AlterNet: Are We Facing Just Another Market Problem or a System Collapse?

[marmar]

Are We Facing Just Another Market Problem or a System Collapse?

By Danny Schechter, AlterNet. Posted July 28, 2008.

Even as foreclosures double, and the price of gas and food rises sharply, it's been business as usual in newspapers and in Washington.



The question we face in late July, as regulators seize two more banks, is: will we be engulfed by a further collapse in our economy or can the damage be contained, or, even turned around?

We know what goes up must come down but when will what's down go back up?

It isn't looking good -- and, even now, the two presumptive major party presidential candidates are talking about everything but this deepening crisis. They are debating terrorists and Afghanistan and how to meander out of Iraq but not the reality that so many Americans are living with: a squeeze that is leaving so many of us broke, in deeper and deeper debt and disgusted.

Until now, the doom and gloomsters were mostly to be found in the margins, in financial blogs or in the campaigns of Ron Paul, Ralph Nader or the Greens. The mainstream media has been looking the other way and mostly downplaying the unfolding disaster. Even as foreclosures double, and the price of gas and food rises sharply, it's been business as usual on the business pages, and among the liberal political pundits who would rather debate the cover of the New Yorker than the growing desperation of so many Americans.

The Congress finally passed a housing bill a year into the crisis with most of the money allocated to try to shore up two housing agencies with more than a half a trillion in housing assets. The markets are melting down with more major stocks tanking, banks writing off still more billions. and unemployment rising.

People in the know like George Soros are saying this is the worst financial crisis since the depression. Others fear another depression. This pessimism has reached Newsweek, a guardian of conventional wisdom, which now says "It's Worse Than You Think, writing "this downturn is likely to last longer than the eight-month-long recession of 2001. While the U.S. financial system processes popped stock bubbles quickly, it has always taken longer to hack through the overhang of bad debt. The head winds that drove the economy into this dead calm -- a housing and credit crisis, and rising energy and food prices -- have strengthened rather than let up in recent months. To aggravate matters, the twin crises that dominate the financial news -- a credit crunch and the global commodity boom -- are blunting the stimulus efforts."

We have two challenges: understanding the gravity of what is threatening us, and then discussing what could or should be done. We might also want to think about what the press should be reporting and what policy makers should be proposing. ......(more)

The complete piece is at: http://www.alternet.org/workplace/93031/are_we_facing_just_another_market_problem_or_a_system_collapse/

[Trillo]

1. this is odd

This all happened three blocks from the White House. While federal regulators visited, none of the progressive DC think tanks or even unions showed up in solidarity even though AFL-CIO headquarters is a block away.

[bemildred]

2. Well, they ended the Glass-Steagal Act.

WTF did they think those protections were put there for? But this is going to be worse, the US was still underpopulated and resource rich back in the 30s. Now we all live in cities and nobody knows how to grow food without lots of petroleum inputs, and our currency was still tied to something real.

[populistdriven]

4. I donno, ask Bill why they ended the Glass-Steagal

[bemildred]

5. No, you ask Bill why he signed it.

But he has a lot of other things to account for. But you ask Congress why they passed the repeal.

[desktop]

3. It's been a slow system collapse for the middle and lower class since the 80's

W. Bush supported by his corporate minions have just rapidly moved things along. You can dump on the middle and lower classes for quite a while until things start breaking. For decades Americans have dismissed the lower class with either thoughts of they deserve it for being lazy or at least it's not me, I'm middle class. Now that many of the middle class are falling into the lower class or finding you can't make it on what is supposed to be a middle class wage, the collapsing has begun. When health care becomes un-affordable for the middle class, what good is the middle class. If you don't have health care what have you got, a plasma TV doesn't cut it. A question I ask is who is going to buy your house when the only available buyers make 8 to 10 dollars an hour?

[checks-n-balances]

6. Here's an **Excellent** point from this article re: Obama/Dems

"If Obama or McCain are to "fix" what's broken, they better start talking about it."

Why? Because the GOP are already preparing a case against the Dems blaming them for the economy. They're starting to repeat the meme now, and that needs to be addressed. I've also read that the RW is planning to leave Dems with this whole mess after the election and not only saddle Dems with the mess at the beginning, but it'll be too hard for whoever is in office to improve it to the point of getting re-elected. Then the situation will be ripe for the GOP will move right in and "save" the faltering economy. It sounds pretty much like a lose-lose situation.

So I agree that Obama should speak up now and:

1. Refute the insane idea that Dems are to blame for this economy in any big way, and
2. Talk more about how the economy can be fixed, NOT using the old unregulated unfettered capitalism solutions.

If he doesn't refute these talking points, our country and democracy are doomed.