There is no denying that an economy that the Bush administration did so much to drive into the ground with its lust for deregulation, aversion to oversight and mania for an enormously expensive and unnecessary war is showing some signs of life. A four-week-long market rally and positive profit reports from struggling financial institutions should not be ignored. But my non-economist view is that Barack Obama is wise but not a wizard and the best that can be hoped for in the 16th month of a recession is that the bottom is finally coming into sight but we certainly have not reached it.
It took Bush, who had a good head start because of Clinton era profligacy, some eight years to trash the economy while Obama has had a mere 12 weeks to try to fix it, and so his assessment that we are "beginning to see glimmers of hope" in a speech yesterday at Georgetown University seems about right.
The president noted that recessions are not uncommon, but this one was not caused by a normal downturn in the business cycle but rather "by a perfect storm of irresponsibility and poor decision-making that stretched from Wall Street to Washington to Main Street."
Obama did not offer any new economic policy pronouncements. (Thank dog!) But he mounted a vigorous defense against charges that his administration is trying to do too much -- as opposed to the Republicans trying and succeeding in doing nothing. (My view and not his.) Indeed, the speech was determinedly nonpartisan and included a defense of Bush's TARP program and was delivered in his usual thoroughgoing way.
He noted that "since the problems we face are all working off each other to feed a vicious economic downturn, we've had no choice but to attack all fronts of our economic crisis at once," and that cutting back on spending instead of stimulating it would have made the situation even worse.
Has Obama figured out all the pieces to the recovery puzzle, let alone put them into place?
No. His bank recovery program still gives me the willies, General Motors is brain dead and a broad-based recovery won't be underway until the hemorrhaging of jobs stops and overall demand starts growing.
But credit is beginning to flow, home refinancing is up, stimulus money is forestalling layoffs in government, education and law-enforcement, clean-energy companies are hiring, and the construction companies that built highways and other infrastructures are showing signs of life.
Then there is that great intangible.
As bitter right-wingers gather for "tea parties" today, more and more people seem to believe that we're beginning to see the end of the greatest economic collapse since the Great Depression. They have not given up hope. Nor have I, but I'm still sticking to the view that we're only seeing the end of the beginning.Images by Scott Moore via The Big Picture