The Great Recession: It could have been far worse

Conservatives can say what they want, and we will continue to haggle over what the real unemployment rate is (9.5% or at high as 16.5%), but the consensus among leading economists and financial experts continues to support the actions taken by both the Bush and Obama Administrations to prevent Great Depression 2.0.

In a report released on Wednesday, July 27, 2010, Mark Zandi (Chief Economist for Moody's Analytics) and  Alan Blinder (Gordon S. Rentschler Memorial Professor of Economics at Princeton University) state that while there are good questions about the need for TARP, extending Unemployment Insurance, the Stimulus Package, Cash for Clunkers, Home Buyer Tax Credit, etc..., "it is clear that laissez faire was not an option; policymakers had to act."  Zandi and Blinder go on further to conclude: 

"When all is said and done, the financial and fiscal policies will have cost taxpayers a substantial sum, but not nearly as much as most had feared and not nearly as much as if policymakers had not acted at all. If the comprehensive policy responses saved the economy from another depression, as we estimate, they were well worth their cost."

Which brings me to another point.  Why haven't some of these Bankers and Hedge Fund Managers gone to jail?!!!  Why hasn't there been universal, bi-partisan support for Wall Street Reform like there was back in 1934? 

I think we all know the reason why.  Just in case you don't here is a great article in Vanity Fair about the (Ferdinand) Pecora Commission and how it lead to the formation of the Securities and Exchange Commission and passage of the Glass-Steagall Act (strict separation of Commercial & Investment Banks).  

When you totally repeal the laws that were suppose to prevent our economy from coming close to another Great Depression, and you weaken the SEC's enforcement powers, you shouldn't be surprised that we are in the shape we are in right now.  So, when did all this happen?  The total repeal of the Glass-Steagall Act happened in 1999 and the SEC saw it's enforcement powers steadily stripped from 2001 - 2007.  In case you are wondering who was in control of Congress during those times, Republicans. 

As the 2010 Mid-Term Elections get closer, you need look no further than the full-court press that Conservatives are putting on K Street donors in anticipation of the GOP taking back control of either the House or the Senate, or both.  No wonder Senate Republicans refused to lift the filibuster on the most recent revision of Campaign Finance Reform. 

If the GOP can overcome the Tea Party takeover and they do win control of Congress back from the Democrats, does this mean that K Street Lobbyist will be writing their legislation (again)?  Does an elephant have a trunk? 

Image found at:  http://riverdaughter.files.wordpress.com/2009/08/great-depression-unemployment-line.jpg