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Truth in America

US economy | Truth in America Bill Sharon

Truth is an emotion applied to a set of facts. President Obama stated early in his State of the Union speech:

“Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again”.

He went on to lament the current state of unemployment and the economic pain that many Americans are suffering. It is hard to reconcile the two statements. If the economy is growing and profits are up then why the pain? Consider the following:

  • The Federal Reserve is printing $75 billion a month in its ongoing QE2 effort.
  • The latest housing report tells us that we will have more foreclosures in 2011 than we did in 2010.
  • There are reports that states are exploring the legality of bankruptcy as an avenue to void public employee pension obligations.

We could apply a truth to that set of facts and come to a completely different conclusion about whether or not the recession is over. It is a schizophrenia that affects nearly every public conversation these days – from gun control to the national debt. Pick your set of facts and you will have a truth that others will insist is a lie. Some would say that that is standard operating procedure for our political process.

But I would suggest that there is a different dynamic emerging that separates our current situation from the economic and political cycles of the recent past. The truths that we are being presented with have been recycled to the point where they are ossified. Positions are hardened. Despite the tremor of Tucson the best we can realistically expect is a more polite expression of the sentiment that the other guy is dead wrong and will likely burn in hell.

Several months ago David Brooks made the following observation on the PBS News Hour television program. Change, he suggested, was sometimes the result of the actions of leaders and sometimes the result of an attitudinal shift on the part of the people. He felt that we are in a time when the latter idea is in effect and I would agree with him. Things change when people change their minds, when they develop a truth based on a set of facts that come from their own experience rather than the ideas of their leaders.

The recent events in Tunisia would seem to demonstrate this concept. Is this just the replacement of one repressive regime with another? Perhaps, but it would seem that there is a decent chance that we are seeing the kind of shift that occurred in parts of Eastern Europe after the fall of the Soviet Union. For those in the West who see this as a strictly Middle Eastern and North African phenomena I would suggest keeping an eye on the Irish as we move into the spring.

It’s hard to disagree with the goals that President Obama laid out in his State of the Union. Yes, we want our children to have better educations, yes we want a modern infrastructure with bridges that don’t fall down and high speed railroads, yes, we want our energy to come from non-polluting sources (although how natural gas and uranium got into that mix is a mystery) but it’s hard to imagine how we get there from here with a political system that seems devoid of any plan that entails confronting the very substantial problems that face us.

In a way, the political process is a head fake. What we are looking for isn’t going to come from there. What we are looking for will come from innovative thought and action. Some of it will be half-baked and fail, some of it already exists on a small scale and is growing (like local currencies and the move by Washington State to emulate the state bank of North Dakota) and some of it will seem like it is coming out of the blue. The only thing that seems clear is where it won’t come from.

This guest blog was first published on

Tags: banking , Federal Reserve , financial crisis , foreclosure , QE2 , reform , US , US housing
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