To Wall Street, that may be a reason to rejoice. To the average American, it means things continued to get worse.
In early August, the New York Times reported that "The most heartening employment report since last summer suggested on Friday that a recovery was under way.86 This "heartening" report actually showed an additional quarter million job losses in the month of July, and while the seasonally-adjusted unemployment rate declined a tenth of a percentage point, it was "mainly because so many people dropped out of the hunt for work, ceasing to list themselves as unemployed."87
Once again, the market was not celebrating things getting better, but that they were getting worse more slowly!
Then towards the end of August, another New York Times article reported that Standard & Poor's Case-Shiller Home Price Index was showing improvements in major cities across the country, "in a convincing sign that the worst housing slump of modern times is coming to an end.88 But at the end of the same article, there was a brief mention of the fact that "with unemployment nearing 10 percent, there are probably more foreclosures to come," which could push prices back down,89 making that "convincing" sign of a reversal of fortunes seem a little less convincing!
That same week, Federal Reserve officials started pushing out the message that taxpayers had actually made multibillion dollar profits off of the banks that had repaid their TARP funds.90 But as Rolling Stone writer Matt Taibbi pointed out in his blog, "This is sort of like calculating the returns on a mutual fund by only counting the stocks in the fund that have gone up," since only the healthiest banks have repaid their TARP funds so far.91 However, a recent study actually found that TARP was $148 billion in the red as of June.92
All the chatter about economic recovery and the end of the recession is no more credible now that it was a year ago. In fact, as financial stocks tumbled at the start of September, even CNNMoney reported about "worries that market gains have raced ahead of any economic recovery."93
Wall Street's eternal optimism when it comes to the economy is just a distraction to keep us from demanding real regulatory reform. This allows the big banks to carry on with business as usual, continuing to rob us of trillions of dollars -- perhaps for decades to come.
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Obviously we need a real economic recovery. The banks broke the economy, made us pay for repairs that benefited bankers but have had little or no good effect on most of the rest of us, and now they are ready to break the economy again, at our expense but certainly not at theirs.
It is high time that our government fix what they broke and get the economy back on track in a way that works for us, the taxpayers who bailed them out when their backs were against the wall. But this will not happen if most Americans and most politicians remain oblivious to what has actually taken place and what continues to take place.
To access the footnotes in this article, go to: http://ss29.squarespace.com/storage/Trillion_Dollar_Bank_Job.pdf
