- Sunday, December 20, 2009
- Sunday, December 6, 2009
- Sunday, November 8, 2009
- Sunday, October 25, 2009
Mark Howell, editor of Solares Hill, last week asked, "What in the world happened to Obama?"
For economic recovery, there is only so much any president can do. If things are becoming, as Mark said, "much grayer, much stormier," it is due in large part to what our banks, local governments and even charities are doing -- or failing to do. We might better ask, "What is up with us, the people?"
Under both presidents Bush and Obama, our nation advanced hundreds of billions of dollars to our largest national banks for two reasons. The first was to keep them afloat, which worked. Doing nothing allowed Lehman Brothers Holdings Inc.'s failure, which could have led to a ripple effect of banks collapsing across the land.
The second reason was to get mortgage money and other business loans flowing through the economy. The banks selfishly failed their task.
Making loans is work. Instead, they passively put most of our money into "the bank," buying our own Treasury bonds and bills and pocketing the interest. Easy work, million-dollar bonuses for the top execs who thought it up, and to heck with helping America's recovery.
Both administrations similarly advanced hundreds of billions of dollars to the states. The intention was to help them keep or increase their work forces while completing useful infrastructure projects. This has worked partway.
Our high unemployment is not due to government layoffs, the only sector of the economy with steady or increasing job growth. But governments too have taken much of the money and sat on it, using it to balance their books instead of creating jobs and public works.
Another example is our local school district. The federal government is giving them millions of dollars in stimulus money, but they too are in effect putting much of it in the bank. Their reserves, which is unused money for a rainy day, are more than twice what Florida law requires. They are sitting on the money while negotiating to deny teachers raises, extra money that could flow quickly through the local economy.
Finally, there are our charities, both the large, national foundations and even our popular local ones. This is not the time for them to hunker down and sit on their money.
In many cases, they have funds they have solicited from us with the promise to spend it wisely on things such as medical research or on other worthy nonprofits that don't have savvy fundraising operations of their own. The flush charities with more than $100,000 in the bank should not be sitting on the money we gave them while commendable groups ranging from, for example, Sculpture Key West to a proposed community gardens in Bahama Village, would blossom with grants of a few thousand.
So let us not ask what is wrong with Obama or, for that matter, what was wrong with Bush. Let us take the words of comic strip character Pogo to heart: "We have met the enemy, and he is us."
Rick Boettger was a business professor before writing his book and hosting a 25-state talk radio show on political economics. He has done tax and financial advising in Key West since retiring here in 1996. Questions, information and differing opinions are welcome at rd.boettger@gmail.com.