The Stall

By David Glenn Cox

There are a great many differences between Ben Bernanke and myself other than that he has a good paying job with all the perks and benefits. He judges the economy by the reports he reads say and I judge it by what I see and hear. He reads his reports of economic performance while I merely look out the window.

“The U.S. economy remains “weak” and “fragile” and has a “significant” chance of falling back into a recession, Harvard University economics professor Martin Feldstein said in an interview with Bloomberg Radio.”

The auto body shop next door has no cars on the parking lot to paint or to work on. The cabinet shop next door to me has no work. The owner has laid off his second man and Thursday the owner was working on a chair he brought in from home. Today he didn’t come in at all and on the other side of him is Dinky’s Harley shop. When Dinky is busy the Harley’s roar up and down the lane. Dinky is a quiet man in his fifties with a real nice shop. Dinky told me once his health insurance cost him $3,000 a month because he had problems with his kidneys a few years back.

No Harley’s have roared out of Dinky’s this week and this the week end before the last holiday weekend of summer. On the other side of Dinky is another auto repair shop and they don’t have any work either. In the back of the complex is B&G Automotive a fella named Andreas operates it and until the other day I had never seen the back wall of his shop. He was always busy and sometimes we swap parts back and forth to help each other out. The other day I was emptying the trash and Andreas was sitting in the office reading a magazine. His shop was empty and the parking lot was empty.

All these things tell me more than all the reports written up by worms they tell me more than Ben Bernanke has ever heard. They tell me there is big trouble right here in river city. Burger King still has their dollar cheeseburger the Krystal down the street is advertising three Krystal’s fries and a drink for $2.99 and Steak & Shake is advertising four meals under four dollars. These things tell me that business is lousy and that the business has ceased to be about what we want but what we can afford.

Any loose money floating around in the economy is being spent on school supplies. Office Depot is offering pencil boxes for a penny and other ridiculous come ons to try and draws some business to try and sell something. Old Ben Bernanke is so isolated from the real economy he doesn’t get it. He promises to stay on top of the situation and reminds us the Federal Reserve is doing all it can now by giving banks money at a zero percent interest rate. Barack Obama and Joe Biden are telling us all about the great projects the stimulus money is being spent on.

But down here on the ground the rain doesn’t fall. The saw’s not cutting, the wrenches aren’t turning. They aren’t buy wood or varnish and they aren’t buying carburetors and brake pads. They aren’t buying cheeseburgers they aren’t buying anything.

Stall- the condition of an airfoil or aircraft in which lift is lost and the airfoil or aircraft tends to drop.

In the case of an aircraft life and death is dependent on how much room is left in the sky before hitting the ground. We are flying too low to survive a stall yet Bernanke insists he watching close and Obama & Biden are singing, “I couldn’t be more tickled if I had a feather up my ass.” Pretending, wishful thing, I think we can, I think we can!

Most of the money spent up to this point has been squandered on Rube Goldberg whirly gigs and zero interest rates loans to the big banks that take the money and invest it in Wall Street or Chinese Real Estate or rape the struggling public with credit card interest. It is important to understand that when the Federal Reserve passes out free money to the banks the bill is sent to the American taxpayer. They give the money to the banks for zero percent and then sell Treasury bills that you the taxpayer will be on the hook for.

This is 1932 and we have as our President Herbert Hoover and when the Great Depression set in Mr. Hoover’s suggestion was to cut spending and give low interest loans to banks and industry to restart the economy. Problem was no matter how much money they made available to Ford and GM and United States Steel no customers showed up to buy anything. Anyone who has ever played Monopoly understands this, one or two players control all the money in the game and for the rest of the players doom is but one roll of the dice away.

Our economy must take its medicine and this time it is the upper income levels that must hold their nose and swallow higher taxes. It will not get better any other way. We must put fuel to light the fire at the bottom to heat the steam at the top.

"When we [the Republican Party] assumed direction of the Government in 1921 there were five to six million unemployed men upon our streets. Wages and salaries were falling and hours of labor increasing. . . . The Republican Administration at once undertook to find relief to this situation. At once a nationwide employment conference was called. . . . Within a year we restored these five million workers to employment. But we did more; we produced a fundamental program which made this restored employment secure on foundation of prosperity; as a result wages and standards of living have during the past six and a half years risen to steadily higher levels. Herbert Hoover, October 1928

“During the past year you have carried the credit system of the nation safely through a most difficult crisis. In this success you have demonstrated not alone the soundness of the credit system, but also the capacity of the bankers in emergency.”
Herbert Hoover, Address before the annual convention of The American Bankers Association, Cleveland
October 20, 1930

(Reuters) - President Barack Obama, anxious to show he is still focused on the battered economy despite being on vacation, took time out of his golf game on Friday to chat about the growth situation with New York Mayor Michael Bloomberg before they hit the course.

Yeah, that’s keeping your eye on the ball!

‘Such objectives as these three, restoring farmers’ buying power, relief to the small banks and home-owners and a reconstructed tariff policy, are only a part of ten or a dozen vital factors. But they seem to be beyond the concern of a national administration which can think in terms only of the top of the social and economic structure. It has sought temporary relief from the top down rather than permanent relief from the bottom up. It has totally failed to plan ahead in a comprehensive way. It has waited until something has cracked and then at the last moment has sought to prevent total collapse.
It is high time to get back to fundamentals. It is high time to admit with courage that we are in the midst of an emergency at least equal to that of war. Let us mobilize to meet it.’ Franklin Delano Roosevelt