Economic crisis still looms as winter looms nearby

This is the quote of the week at Mortgage Blues: “”People have been celebrating that we’re through the financial crisis, but the underlying issues are all still there,” said Dean Baker, co-director of the Center for Economic and Policy Research. “We’ve lost trillions of dollars in housing wealth, and consumption’s going to be weak. It’s not the ’30s, but there’s really nothing to boost the economy.””

Interest rates are already low. The Fed cannot drop rates to stimulate the economy.

A false sense of reality from cash-for-clunkers and other stimulus programs let people pretend that the economy has recovered.

Ben Bernanke said, in late September, that the recession was over. Really?

The truth is very simple. The slowdown is now coming home to roost. Going into the winter Americans prepare for heating bills and the holidays. Reality is here today. Bank balances are dwindling. IRA and 401-K accounts have not recovered.

Will we see ten more years of this? Personally I did not take my eye off of the ball while focus shifted to America’s health care debate.

In previous years voters wanted to know which side of the abortion debate potential candidates would be on. Health care is the same. Pick a side. Make them squirm. But don’t lose focus on the recession.

It will only get worse. Just look at the jobs report. The unemployment rate rose to 9.8 percent in September, the highest since June 1983, as employers cut far more jobs than expected. The report is evidence that the worst recession since the 1930s is still inflicting widespread pain.