I was driving around yesterday early afternoon and happened to listen to a radio rebroadcast of Meet The Press. The guest was our esteemed Treasury Secretary Timothy Geithner. One good thing about MTP is that the guests do get to answer questions without constant interruption. One frustrating aspect is that we have to rely on the good sense of the moderator to ask follow up questions. In this particular case David Gregory wasn't up for the job.
As I listened I heard Geithner defend his and the Obama Administration's approach to "solving" our economic crisis and their efforts to get the "economy going again". Just once I wish Gregory would have asked what was meant by getting the economy going. I've said this many times and I'll say it again. What passed for economic growth from late 2001 to 2006 was a debt driven mirage. That's why I would have liked to have heard Geithner have to explain his thought process a little more. The housing gold rush and the subsequent refi deluge were the forces behind the consumer society that was America circa 2005, 2006 and 2007. The thing is, even with all of that debt driven consumption all we ended up doing was spending borrowed dollars on stuff manufactured elsewhere ( for the most part). Even if we are able to revive the consumer over the next quarter or two what would the consumer spend on and how would it benefit American manufacturers even if this spending came to fruition? The fact that the average American has seen his housing stock decline precipitously and at the same time has seen his retirement portfolio decline anywhere from 30-60% over the past year is a double whammy I don't think there will be any short-term recovery from.
Talk of "getting the economy going again " is absurd at this point with massive stimulus and more debt is absurd.Maybe Tim G and his boss mean well but as far as I can see the only beneficiaries of all this will be the bankers at Goldman and Morgan as well as the other vermin who feed off of Washington pork.
