Ditch “Boomergeddon!”

By Peter Galuszka

It’s been one hell of a week — with an emphasis on “hell.”

Thursday, stock markets taken more than 500 points following days of disastrous performance. Congress finally passed a bill that would raise the debt ceiling — meaning the U.S. magnanimously agrees that it will pay for money it has borrowed — and we have a new Congressional group that promises to cut federal spending in a way designed to gladden the heart of every little right winger out there.

Now there’s very real concern that the world will slip into a second recession after the recent one that was the worst since the 1930s. There’s all kinds of turmoil about. Debt crises in Portugal, Greece, Italy, and Spain. A boomsey-daisy Chinese economy built on overheated production and lending and artificially valued yuan. The currency in Europe that doesn’t seem to be pegged to anything. It was another sweet dream of the “End of History” types back in the 80s.  The Japanese are still trying to crawl out of its “lost decade” more than a decade ago.

So what are we doing? In the words of Washington Post columnist Ezra Klein,  “Washington just spent two months arguing over whether it would pay its bills or spark an unnecessary financial crisis.” Taken a step further, it means there’s not much leadership in Washington (Barack Obama included) and the “Boomergeddon” chorus is starting to sing way off tune and it’s getting hoarse.

We can talk all we want about the dire need to tighten our belts and stop spending. Mind you, the people who do most of the talking send their kids to private schools and want the cuts to be put on people not of their social or economic class. Cut tax breaks for the rich? No way! Even Obama is too scared to do that. Meanwhile, we now have old-stand-by George Allen, Mr. Republican, decrying raising the debt ceiling although he supported it with hesitation for years.

So, now, after dodging an artificial financial crisis we are stabilizing into  a very real one. The Boomergeddon principles don’t work. That is plain. They were written with an eye towards getting the GOP as far as it could go in last fall’s elections. In other words, the ideals are of, so 2010.

We really need to do something globally and quick. That is going to mean another and bigger stimulus. Spending. Now. If the GOP doesn’t like it, screw ’em! Too bad Obama didn’t have the guts to just didn’t email Boehner and Cantor that, “Buzz off, if you keep on, I’m pulling a 14th Amendment and you can bitch all you want. See ya in court.”

It’s time to start acting and stop philosophizing about cuts, cuts, cuts. We need jobs, not. Polls show that 80 percent of Americans understand that.

Share this article


(comments below)


(comments below)


9 responses to “Ditch “Boomergeddon!””

  1. Peter, you see but do not comprehend. We cannot “stimulus spend” our way out of this crisis. Add more debt, and you will bring the final reckoning — Boomergeddon — that much closer and make it that much worse. We are living through the final throes of the democratic welfare state, in which governments cannot possibly keep all the promises they’ve made. You think higher taxes (on the rich) will help? Well, Europe has higher taxes on the rich, and they’re even closer to Boomergeddon than we are.

    The reasons the markets reacted negatively to the debt-ceiling resolution is not because we “just spent two months arguing over whether it [we] would pay its bills or spark an unnecessary financial crisis.” If that uncertainty caused the sell-off, we would have seen some sign of it long before two months. The markets reacted negatively because after two months of angst and maelstrom, Congress came up with a fig leaf of a deficit-cutting package that cuts virtually nothing today and puts off all the hard decisions until later. The markets realized that there is zero hope of making a dent in the deficit until after 2012, when there is a chance that Barack Obama and the Democratic majority in the Senate will be sent packing…. and even then there is no assurance that a GOP-dominated Washington would have the cajones to make the decisions that need to be made. Throw in a U.S. economy that’s slowing as a result of the job-killing Obama administration policies, the resurgent woes of the Euro (and impending collapse of the European welfare state), and the cooling off of the over-heated Chinese economy, and you can understand why investors are suddenly spooked.

  2. Peter Galuszka Avatar
    Peter Galuszka

    Job-killing Obama policies? Details? Any at all?

    He actually CREATED jobs, but not enough.

    Peter Galuszka

  3. Job killing. I will give you a real live example. I know a businessman in Bethesda who is trying to build a wireless broadband company. He is leasing Educational Broadband Service radio licenses that are held by K-12 schools and colleges, a few of which I have represented in negotiations. Like most other small businesses in this field, the Bethesda company applied for some Stimulus money. In round one, it did not receive any, but did receive some in round 2. But the investment market stopped making any investments with these smaller companies waiting to see which companies obtained Stimulus funding. The little company could not get private funding when it was needed; didn’t hire employees to build its network; laid off most of its existing employees; and is close to defaulting on some of its leases. While there is always a risk of failure with small companies, this one would have had a much stronger chance of surviving and even growing had there been no Stimulus bill. This one was caused by the absolute incompetence of the federal government.

  4. Richard Avatar

    Such grand statements!

    Mr. Gulaskza – Although the Republicans are certainly the bigger hypocrites in this farce, the Democrats had their moments as welll.
    Mr. Bacon – “job-killing” – do you guys get a special mantra dictionary from Karl Rove? And awfully broad statements about “Europe” – It’s my understanding that the tax rates in Germany and Sweden are higher than ours, and they seem to be doing ok (and with health insurance too)!

    Here’s my broad statement – the Parties both wrong and both ridiculous. Where are the leaders who will get done what everyone knows must be done? In the short term we need to focus on jobs – and despite the wishful thinking of the Republican party, that means spending, at least in the short term. Firing cops, teachers, and the EPA and cutting back on university research is the wrong approach. In the long term, we need to control entitlements – and despite the wishful thinking of the Democratic party (and the fears of the Republicans), that means doing something about Medicare.

    [And no, the Republican party has no cojones – they only follow the will of the American people!]

  5. Peter Galuszka Avatar
    Peter Galuszka

    My name is spelled Galuszka, not Gulaszka. Do me the courtesy. OK?
    Peter Galuszka

  6. ”Washington just spent two months arguing over whether it would pay its bills or spark an unnecessary financial crisis.”

    Wrong: Washington just spent two months arguing over whether it would continue borrowing money to give handouts; there is plenty of revenue ($200 billion/month) to pay bills (interest on the debt; contracts). There’s even some left over to pay for defense, and some handouts.

  7. Morgan Stanley is now charging a fee, negative interest, to accept foreign deposits. Despite all the angst the us is still the best place to invest. I increased my equity holdings today and am prepared to continue to do so.

    What about you?

  8. Richard, yes, you figured it out — I follow orders from Karl Rove. He sent out a mental telepathy broadcast to all his zombie followers to start describing Obama’s policies as “job killing” — and I slavishly followed. How did you know?

    I have been slavishly following Rove for years on the “job killing theme.” I’ve blogged about a single provision in Obamacare killing 25,000 jobs in physician-owned hospitals — as well as how Obamacare has created enormous uncertainty for business generally and small business in particular. I’ve blogged about how Obama’s energy policy has discouraged oil drilling in the Gulf, Alaska and offshore. (You may be able to justify the regs on environmental grounds, but try to stay focused, we are talking about jobs right now.) I’ve blogged about how an Obama appointee blocked Boeing’s plans to build an airliner manufacturing facility in South Carolina. Again, you can make arguments for that decision, but the bottom line is some 5,000 (as I recall) lost jobs. Obama has held up the approval of free trade agreements with Korea and Colombia that would create thousands of export jobs. The list of particulars goes on and one. But the single biggest problem is that his policies have created so much uncertainty about the future that business is scared to invest. This has been the weakest economic recovery since the Great Depression. At some point, blaming it on Bush just doesn’t work anymore. It’s time to man up and admit that Obama has the worst economic track record since Herbert Hoover!

  9. Maybe, but he got handed the worst set of tools to work with – ever.

    What other president stepped into the office with the banking system in collapse? It takes a long time to stop an avalanche, clean up the damage and replant the slope.

    And it takes more than one person to do it.

Leave a Reply