President-elect Barack Obama yesterday and Nobel Prize winning economics columnist Paul Krugman on Sunday tried to tell an unbelieving America the truth about how bad things are going to get -- bad as in Great Depression II.
It was unmistakable in the words and writing of the brilliant duo that we are now in a vicious cycle of deflation -- except at the gas pump because of the escalating Israeli-Hamas conflict -- that results in even larger layoffs while most consumers have less money to spend. Alcoa announced layoffs of 13,000 human beings yesterday.
Meanwhile, Obama -- facing trillion-dollar deficits with the need for immediate economic stimulus while Americans have less to pay in taxes and invest in the stock market -- now is telling his liberal base that he is going to be a fiscal conservative. The poor guy is going to have no honeymoon with Congress when he takes office Jan. 20.
Krugman worries that the economic stimulus plan, delayed for only a few months, will leave America with the worst economic year in memory in 2009, and with a soft descent into a Depression that will last for who knows how many years. Three decades of excess and greed cannot be sweated out of America's economy overnight. Wealth lost in 401ks is not going to be replenished any time soon.
Meanwhile, from my own weak analysis, cities and states are going to default on bonds sold for infrastructure investment. Older and more affluent people are going to be ruined by a Madoff-kind-of result. Just ask Kevin Bacon and Kyra Sedgwick who Madoff took for part of their fortune. The MUNI bond disaster is going to make that look like pennies.
Bad is going to get worse.
And so on this blog site, this post explains why you have been reading a lot about an inaugural ball in Nashville. The bipartisan and multi-racial gathering is creating the kind of political coalition needed to save Nashville and Middle Tennessee during the coming decline.
Obama is telling us Washington won't be able to help beyond a stimulus check.
And Krugman is writing that the check in the mail is going to be too late.
If you're still in the stock market awaiting a Bull rally, you're going to lose another 20 to 25 percent of your money. There are no quick fixes.
Welcome to the Great Depression of 2009, 2010, 2011 and who knows how long.
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