Who is going to buy our way out of this economic disaster?

The California budget and economy is falling apart. 21,000 state employees are getting layoff notices in about a minute.  Those remaining will be forced to take 2 day furloughs per month — but at least they’ll still have their work.  The federal stimulus package was just signed by Obama, so over time, some lost ground will be regained, and states will get some relief, but, boy, oh boy.  Are we in trouble. 

I’ve been getting emails from readers who are so disappointed the Obama hasn’t already “fixed” this crisis.  There are certainly problems with how our 2-party system in the US makes it very easy to become paralyzed and road-blocked.  But, this economic freefall isn’t even a question of how our federal government works — because the economic challenges are global.  The world financial leaders allowed this to happen by a serious lack of oversight combined with a Roman Empire style greed and love of excess.  So it is no surprise that the cards are not just tumbling, but rather cascading down. 

We are in absolutely in crisis and according to Obama, possibly heading into catastrophe.  It is dire.  We are all scared.  And we have to get cracking… as a people and not counting on government alone…to get innovative and find the ways to cauterize the bleeding.   The newly signed stimulus package is, to my mind, like half a cauterization.  The artery will stop projectile bleeding (so hopefully we, the patient, won’t bleed out in 4 minutes) but there is a gaping, seeping wound. 

I have the urget to go off ona tangent here (but there is a point, I promise):

A couple of years ago, I re-fractured my navicular bone (a small, but critical bone near the ankle) in my left foot.  I went to a highly recommended orthopedic surgeon, Clifford Kahn. I remember meeting him for the first time.  Very tall, attractive in an unusual way — with a very unorthodox full Z-Z-Top beard and cowboy boots peeking out from under the scrubs.  I’d never met a doctor who didn’t actually look like a doctor, but he was incredibly brilliant and incredibly kind and he was able to put me on the right path to fixing my teeny, tiny little injury.  That is not what this tangent is about.  It is about the other part of Dr. Kahn’s practice — that of wound healing and care.  He specialized in trauma to the foot and circulation to the feet tends to be poor as we age…resulting in very slow wound healing.  Part of wound healing, as I learned, requires taking off unhealthy flesh to the point of leaving only healthy flesh, so that the wound will bleed freshly and allow nature to heal the diseased area.  And often, it was necessary to work on the wound with no freezing so that the doctor would clearly know where diseased flesh ended and clean flesh began.  Imagine having a deep wound cleaned with no anaesthetic.  Yes, people scream in pain.  I heard it…not good for a gal with a weak stomach.  When I asked Dr. Kahn about that, he told me that the patients understand why the rot needs to be cut out and that they also understand why they need to communicate the pain.  So that they can ultimately and hopefully heal — without amputation.

I’m not a doctor, so perhaps I didn’t understand the explanation perfectly, but that is the image I carry around in my head regarding our economy.  Our government is trying to figure out what the extent of the rot is, what is salvagable and what needs to be amputated.  Obama is the new head doctor and he’s hearing the screams of the patients whose rot developed on another surgeon’s watch.  He took over the job, he wanted the job and now he’s got to get us out of the mess.

We are all realizing that is not going to be a short-lived crisis.  Speak to any older person, let’s say 70 years and older.  They will all tell you they see a struggle for the next 3-5 years until we can feel a bit of economic confidence.  I agree with them.   I also believe that our carbon-fuel economy will ultimately be replaced by renewable and alternative energy solutions.  But that also will take a ton of time and new infrastructure building.

We all know that housing is a disaster and will be the next big item on Obama’s plate.  Right next to the auto industry.  If you were watching the news yesterday, both Chrysler and GM had to present their viability plans.  It’s pretty bad.  A big restructure is in the cards for GM and Chrysler.  And a painful restructure this will be.  Here is a link to the GM press conference.  It will be available as of Wednesday at noon. You’ll have seen the sound bytes, but what CEO Rick Wagoner put forward in terms of the viability options is that GM projects it will cost much less to support the plans for restructure than to support a bankruptcy.  47,o0o employees will be terminated at GM and about 3,000 at Chrysler.   Additionally GM and Chrysler may need $22 Billion now and ultimately as much as $39 Billion over time to bail them out. 

I cannot see how we can let any of the Big 3 can go into bankruptcy.  Their effect on world economy is so huge that the ramifications of letting any of these companies fail are beyond imagination.  We need them to take the lead, on a global level, on renewable and alternative energy solutions, do it well and do it as quickly as they can.

Today we’ll hear the next pain solution as Obama lays out what he’s looking at regarding the housing market.  Crikeys.  Can’t wait.

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