March unemployment data

[Beet]

A pyrrhic victory.

While it shows that the government interventions of late 08/early 09 (much of the credit for which goes to Bush and Paulson) worked, a few things have to be kept into account

1) In the 1990s, an average of 225,000 jobs were created each month with a workforce that was significantly smaller. The financial sector was also smaller. And the 1990s were not by any means an anomaly for postwar decades. 125,000 jobs have to be created each month just to keep up with the natural growth in the workfoce-- although that could begin to tape off in the next decade as more baby boomers retire.

2) The bailouts which got us to today's numbers were so unpopular that it's questionable whether they would be repeated (or could be). Which means that the economy must be reformed in a fundamentally new direction so that TBTF never happens again. Or at least not in as long a time as can possibly be helped.

3) This reform has not happened.

The Obama administration has spent all of its political capital and more on the health care debate. Glass Steagall needs to be brought back, the Volcker rule implemented, the big banks broken up, derivatives to be forced onto the open in exchanges, executive compensation massively reformed, an independent consumer protection agency formed and headed by Elizabeth Warren, and the people most responsible for the bad decisions fully investigated and prosecuted to the full wherever they broke the law.

To do this, the independent power of bad lobbying and Wall Street must be broken. Campaigns must be publically funded, much harsher restrictions must be put on lobbying and on jumping between the regulated and regulator. There must be much more openness in government. This is not happening.

The partisan battles that you see every day are bread and circuses. Genuine popular outrage has been co-opted, first by the 'tea party', which had some claim to authenticity at one point, now by the GOP.

After all of this, the economy needs to be restructured through industrial policy focusing on technology, health care, energy and other leading or exportable sectors, the American workforce reeducated, and the entire paradigm that we think about economics changed so that "GDP" and the stock market are not the main measures of wealth and we are not so dependent on finance and debt.

Just as I was typing this, and ad came on TV for a product advertising "no interest for 4 years". This shows that the mentality has not shifted.

Obama is not addressing any of this. His apparently awareness of these issues is like Teresa Wright's character in Shadow of a Doubt, because that is what he has. A shadow of a doubt that the "big thinker" is not thinking big enough, and has not been thinking big enough since January 2009.

We have prevented an epic cataclysm [edit: for now] that would have had historic social repercussions. But we are only about 20 percent of the way there. The above list will take decades to complete but unless we have make substantial progress on these financial and economic transformations, a full response to the crisis is nowhere close.