November 28
By HELEN THOMAS
HEARST NEWSPAPERS
WASHINGTON -- Few prominent
economists will say it, but to
me it looks and feels like we
are in another Great Depression
or a reasonable facsimile.
The current meltdown is dubbed a
"financial crisis." But a rose
by any other name would still
inflict the same hardship and
suffering on most people and
businesses.
Clearly, the lessons have not
been learned from the Herbert
Hoover era. Nobel Prize-winning
economist Paul Krugman, a
columnist for The New York
Times, says the current banking
crisis is "functionally similar
to that of the Great
Depression."
"Many of the symptoms" are the
same, including the impotence of
monetary policy -- like cuts in
interest rates -- that has not
halted the economic downturn.
Typically, the current
Republican administration has
acted first to bail out the
collapsed financial industry,
with few strings attached.
Belatedly, the government now
has come up with an $800 billion
program for hard-pressed average
Americans to make it easier to
get loans for homes, cars and
education or borrow through
credit cards.
The moves evoke the old quip on
Capitol Hill: "A billion here
and a billion there and pretty
soon you are talking about real
money."
The big three auto-makers -- on
the verge of collapse -- won
little or no sympathy from the
nation's lawmakers in a recent
appearance before Congress. They
will be back again next week to
make their appeal along with
some representatives of the
United Auto Workers union.
Thousands of workers at
auto-assembly plants in Michigan
and at car-parts suppliers in
the Midwest are losing their
jobs. No one is predicting a
quick turn around from Detroit's
9 percent unemployment rate.
Former Energy Secretary Spencer
Abraham, a former Republican
senator from Michigan, said in a
New York Times opinion column
that allowing the auto industry
to go into bankruptcy would be a
"disastrous course." Thousands
of Americans would be forced on
"the rolls of Medicare and
Medicaid, costing billions of
dollars," he said.
President-elect Barack Obama has
promised a "strong Wall Street
and a strong Main Street" if his
multi-billion-dollar stimulus
package is adopted after he
takes office on Jan. 20. In a
radio address last Saturday he
promised the creation of 2.5
million new jobs, following
Franklin D. Roosevelt's recovery
blueprint for needed public
works projects.
After speaking by phone to
President Bush on Monday, Obama
told a news conference: "We have
to do everything we can to keep
the financial industry working."
He also named his economic
policy team, many of them
familiar from the Clinton era,
which prompts the question:
Where is the change that Obama
promised in his presidential
campaign?
It's all going to get worse,
according to the experts. We
have had recessions before but
nothing like this, with massive
layoffs, hundreds of
foreclosures, retail stores
closing, stock market losses,
and widespread fears about the
future.
I
grant you I have yet to see
former wealthy men selling
apples on the street corner as I
did during the Great Depression
in the early 1930s but the
current uncertainty is cause for
worry.
And the outlook for a return of
consumer trust in the market is
bleak at this time.
Obama told reporters: "The truth
is, we don't have a minute to
waste. With our economy in
distress, we cannot hesitate and
we cannot delay. Our families
cannot keep on waiting and
hoping for a solution."
Obama will have the customary
honeymoon and some political
running room, at least at the
start. But he has to move fast
to restore confidence in the
market place and trust in the
banking system.
His heady presidential campaign
is over but prosperity is not
just around the corner.
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http://seattlepi.nwsource.com/opinion/389882_helenonline29.html
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