The Bush administration's idea for cleaning up the mess was to throw money at the problem - hundreds and hundreds of billions - and hope for the best.
Anybody see any difference with what the Obama administration is doing? I sure don't.
The Bushies threw tons of money at AIG, Citigroup, BoA and other failed institutions - the Obama people are doing the same.
The Bushies refused to "nationalize" zombie (i.e., failed and insolvent) banks because "we're, uh, capitalists, you know..." - the Obama administration has the same policy.
Meanwhile every week the U.S. government prints more money and borrows as much money as it can from overseas and hands it out to these failed institutions.
And the list of failing "bluechips" keeps growing - the latest rumor going around is that General Electric needs a bailout. If GE goes belly-up, well, that would be pretty bad for the American economy. As Joe Nocera put it in the NY Times:
A General Electric bailout would be a devastating blow to a country that is already reeling. I can’t think of anything that would be more corrosive to our already low confidence, and it would serve as a huge setback for the economic recovery we’re all praying for.The jobs numbers keep getting worse and the housing numbers are abysmal - the Times reports this today:
Despite tentative signs of recovery in hard-hit areas like California and Florida, the broader housing market is far from reaching bottom, economists say. Across much of the nation, prices are likely to keep falling into 2010.
So this March-to-June season, when most homes are bought and sold, will be bad, perhaps the worst since the market began to spiral down in 2006.
Across the nation, 19 million houses and apartments — nearly one out of every seven — are vacant, the highest percentage since the 1960s. But only about six million of those homes are for sale or for rent. That means millions more could still flood onto the market, depressing prices further.
For would-be sellers, the bad news keeps coming. This week, one new report showed that one in nine mortgages was delinquent or in foreclosure, while another showed that January contract signings for sales of previously owned homes fell at their fastest pace in two years.
Doesn't look like the housing market is getting better any time soon and if the job market continues to dive, well, that doesn't bode well for either housing or the overall American economy, does it?
Nouriel Roubini - the man who predicted the current mess would happen - says world governments are not doing enough to remedy the problems:
The global recession may continue until the end of 2010 as the response by governments to rectify it is “too little, too late,” said Nouriel Roubini, the New York University professor who predicted the financial crisis.
“Governments are falling behind the curve,” Roubini said at the India Today Conclave in New Delhi today. “This recession can end up becoming even worse.”
The situation can be improved by appropriate policies, including governments taking over insolvent banks, cleaning them up and re-selling them to private investors, he said. The Group of Seven and the Group of Twenty economies “must act together to get out of this mess,” Roubini said.
Roubini says if we continue on our current course, the recession will go through 2010 at least.
And the new bosses don't seem to be doing anything different than the old bosses.