There are many media outlets that have been broadcasting recent gains for the stock market as if the Allies liberated Europe on V-E Day.
Not so fast. The Dow is the wrong metric to judge our collective fiscal health, and when any news reader takes to the airwaves to celebrate those numbers – he/she hopelessly under-states the weakness of the American economy.
Elected officials keep ignoring the 800 pound gorilla in the room: “It’s the debt, stupid.”
The cost of living, the lack of credit, and plummeting home values are combining to make ghost towns out of many main streets across Massachusetts. Too often for young and old, married with kids or single adults – they all simply wait to collect their pensions, finish their schooling or job training, and then they bolt Mass. for greener pastures.
Only select groups have truly been bailed out:
-Chase, Bank of America, Citibank, Fannie Mae and Freddie Mac, etc.
-The CEOs of failed, startup companies, (like Evergreen Solar or Solyndra), who have received millions to try and change consumer behavior in emerging markets not yet commercially viable.
State/federal officials have not yet performed their number one duty to the American people: Tell us the truth.
The truth is there may have to be another massive rescue plan akin to what the European Union finally came to terms with in the Greece debt crisis. Call it an “era of fiscal austerity” irrespective of market indexes or unemployment rates, led by substantial banking restructuring and large scale spending reform. Only then will the free market be allowed to grow.
We have wasted four years getting to the business of climbing out of this hole, and toxic assets still sit idle on banks’ balance sheets.
Under the Troubled Asset Relief Program (TARP), according to Treasury Secretary Timothy Geithner, in winter 2011 testimony, only $2 billion out of $700 billion (that is .3 of 1 percent) handed over to the big banks three years ago has actually been spent on homeowner loan modifications.
The Secretary used the phrase “under-performing” and conceded that under the toothless law, the banks are not compelled to help a single U.S. homeowner in distress.
So, the programs widely marketed by President Obama, Gov. Patrick and State Sen. Eldridge as a panacea are mostly voluntary and ripe with fraud and incompetence.
Just ask any realtor brave enough to have stayed in the profession.
Dean Cavaretta (R-Stow)
2012 Candidate for State Senate
Middlesex & Worcester District
On Twitter @DeanCav