It was an uplifting and positive speech, but did you notice that it was all about tomorrow, not the current state of our affairs. President Obama laid out all the things we should be doing in education, innovation, green energy, new rail transit. But sadly, we are simply not doing these things now. The claim that we have already "broken the back" of the recession was also a wild hope for tomorrow. In real terms, with unemployment deeply entrenched now, the recession is as still cold as the eastern winter this season. Only 47% of Americans presently have a full time job. 28 million are forced to work only part time, while a staggering 85 million are reported by the BLS as "not in the labor force" simply because they haven't looked for work the last four weeks--they've given that quest up.
Yet the one thing I found odd about the speech is that it simply failed to mention or acknowledge any of this, or the tremendous transfer of wealth from the public to the banks that has been underway in massive bailouts the last three years. Or the fact that the banks remain operating only because of accounting rules changes that allow them to carry worthless property portfolios at boom year values on their "balance sheet." Or the fact that the Fed balance sheet has nearly tripled in size as it absorbed a raft of toxic assets presented by banks as collateral for low interest loans so they could go out and buy treasuries, or invest in more securities schemes, not lend. Or the fact that the Fed itself has tinkered with the rules so they don't have to report these losses either. Gentlemen's agreements... They lost billions, but none of it has been properly acknowledged by any real accounting. They have simply decided to pretend nothing catastrophic actually happened, and the burden of all these losses has been quietly and deviously passed to the public taxpayer--that would be you.
People think the biggest banks only received little bundles of $25 to $50 billion each during the crisis. (Sums of money, I might add, that would feed every hungry person on earth for a year, all glibly given to the banks without a second thought while a tide of social unrest sweeps across North Africa, toppling governments as people protest the cost of living and corruption in government there.) In reality the big banks, who's former officers now hold all the key posts in our government, received a real bailout sum exceeding $12 trillion dollars, which would feed every soul on earth for generations.
The only reason we have not seen such unrest here in the US is that people simply don't know any of this with any real understanding--even intelligent, well educated people. The media doesn't report any of it, and most people are not diligent enough to seek the information out on their own. And of course it will never be mentioned in a state of the union address. The average person does not know what "the Fed" is, how it operates, or what its "policies" really mean or do. That ignorance, along with our endless fascination with dancing and ice skating celebrities, has kept the lid on any movement to the streets to protest the real state of our union. Another reason is that people are not yet desperately hungry here, in spite of the shrinking product packaging and rising food prices.
They are hungry enough in Tunisia, and Morocco, and Egypt, however, and the world had better take notice, because what we are seeing there is a well tried template that can quickly transfer to western nations as well. There comes a point when the reality of people's lives, in real terms, becomes so onerous that they will indeed take action and demand change. And as the old Indian once said: "if we keep heading in this direction we just might get where we're going."
Will it be a land of new high tech industries, revitalized educational systems, high speed trains? Perhaps, but not until we first acknowledge what really happened in the arcane realms of high finance, where the money really went, where the losses really are... At present the total funding dedicated to all the things Obama talked about last evening would not equal even a small fraction of the sums trucked off to to vanish into the black hole of big bank balance sheets. That is the sad fact, and the real state of our union.
