We're Going Up?

Just after I blogged about the economy going down, what happens? It goes up! Ah, the joy of being a pessimist!.

(Being an engineer, I get paid to think about what might go wrong, so being a pessimist is a occupational hazard!)

MSNBC proclaimed today: "Dow ends at almost 2-month high." Quoting that byline: "The stock market rally continued Thursday, driving the Dow Jones industrials above the 8,000 mark for the first time since February and to its highest close in nearly two months."

Maybe I can put that Bruce Springsteen song on hold for a while.

We're Going Down, Down, Down, Down

Bruce Springsteen sang "I'm going down, down, down, down. I'm going down, down, down, down. I'm going down, down, down, down."

This downfall in the economy hasn't been a real "crash" like the stock market crash of October 29, 1929, known as Black Tuesday.

Instead we keep going down, down, down, down. (Then we take a break.) Then we resume going down, down, down, down. (Then another break.) Then, we keep going down, down, down, down.

And the worst part is that no one knows how to stop the fall. No one knows where we're going or when we will hit the bottom. Not the President, not the Secretary of the Treasury, not stock brokers or financial advisors.

But in an almost surreal way, we're not panicing. Maybe it's the air conditioning and sealed windows, but we never had business men jumping from office buildings like in '29. We don't have former stock brokers selling apples or pencils on the street. It's bad on paper, but our life goes on. Yeah, we're not retiring at 65, and we cut back on things, but life goes on.

So for now, we're going down, down, down, down; we're going down, down, down, down; we're going down, down, down, down.

President Speaks in Coherent, Complete Sentences

For the first time in 8 years, we heard a President respond to press questions in coherent, complete sentences. Now, that's change we can believe in!

That said, the tone of the press conference was somber. There is no end in sight to the economic downturn with the stock market headed down and unemployment rising.

The answers were long, though generally well thought-out. No funny sound bites. No fodder for SNL or Leno or Letterman. In some ways, almost boring.

As I've said before in this blog (see Sept. 2008 posts), our leaders don't really understand the economic downturn or what will work to reverse the trend. This applies to Pres. Obama.

While I don't pretend to understand it either, I do know we have but 2 choices:

1. do nothing, or
2. try to spend our way out.

Some conservatives prefer a tax cut. But the total value of a tax cut will not be realized in the economy as some portion will go to savings or debt reduction.

Spending, paticularly on infrastructure can have a factor of 1.4 or so in terms of economic benefits. First, the money employes people in infrastructure construction. Then, materials for this construction a purchased (trickling back to suppliers, manufacturers and delivery companies). Then, with ample work, the construction workers will be more likely to buy consumer goods. All in all there is a trickle impact through the economy. Finally, the improved infrastructure has an overall positive impact on commerse, be it do to better roads, more reliable utilities, or ending a load restriction on a bridge that cause truck traffic to detour.

While we clearly have an intellegent leader, our economic future remains uncertain.

The Doldrums of These Lame-Duck Days

It’s all over, and now we wait. Over are the long campaign, the high of Election Day, and the afterglow of the historic victory of Barack Obama.

Now we sit and wait. And wait. And wait.

Like a long, boring half-time, when will it end? This is the “hot stove league” of politics. We can only speculate about the next political season. Who will be in the cabinet? What will be the first issues that Pres. Obama will work on?

Back in the horse and buggy days, they needed 3 or 4 months to make the presidential transition. Communications took days. Travel to Washington, DC might have taken a week or so. That’s how we ended up with a 3-month power vacuum.

We still may have the biggest financial crises since the Depression plus a couple of wars, not much will happen until January.

Yep, there’s just not much going on.

Eve of Destruction?

I’ve read so much about the economic crisis I can’t remember which writer used the words “eve of destruction.” As a music junkie, it reminded me of the song "Eve of Destruction" sung by Barry McGuire. (words and music at http://www.brownielocks.com/eveofdestruction.html)

Written in 1965 by P. F. Sloan, the chorus of the song goes:

“But ya tell me
Over and over and over, my friend
Ah, you don’t believe
We’re on the eve of destruction.”

At the time, the US was in the midst of the Vietnam War, a cold war with the Soviet Union and China, race riots in the cities, and protests on college campuses. But with the market in free fall, banks failing around the world, the rings haunting true today.

Then I see some European blogs (like Euro Yank’s http://euroyank.blogspot.com/) predicting the imminent fall of the American economy and maybe Europe, too. (Not to mention a prediction that the chaos will lead to Bush declaring marshal law and postponing the elections. Well, Euro Yank's got a apocalyptic blog, so he's been long predicting the outbreak of fascism in the US.)

I don’t know if how far things will fall, but it can be scary times. Clearly the 3 Horseman of the Economic Apocalypse (Bush, McCain and Obama) are clueless. Bush parrots Secretary of the Treasury Paulson’s recommendations for a socialist-style intervention of unprecedented proportions. Our candidates are reluctantly behind this recommendation. But, with widespread public outrage at the idea of bailing out Wall Street fatcats, the Congress voted down a bill today. (From verse 3, the prophetic words: "handful of senators can't pass legislation")

So, ya tell me over and over and over again, you don’t believe we’re on the eve of destruction?

The Economy Today

While we remain teetering on the brink of who’s knows what, we can watch the candidates in action.

McCain Jumps into Inaction

John McCain, our "man of action," stops campaigning, suggests delaying the debate, rushes to Washington to save the economy. But after the summit with President Bush, he has little to offer. He’s caught between the Administration’s proposal and Republican senators and representatives who don’t want to sign on (at least in an election year).

Obama Wants to Debate

Barack Obama, the "man of concensus" (let's get everyone at the table), meanwhile, sees no reason not to debate, and reluctantly returns to Washington for the meeting with the President. But like, McCain, is vague and uncommitted.

Conclusion
No news today. But the debate is on tonight!

3 Horseman of the Economic Apocalypse?

With the US economy teetering on the brink of depression or collapse, most US papers were leading with Bush, McCain and Obama. None of the above convince me they have a clue on how to solve the situation.

Are we looking at the 3 Horseman of the Economic Apocalypse?

The chorus of nations responds: “God help us; God help us all!”