Who Saved Us From A Great Depression?

July 30, 2010

Steven Pearlstein

As usual, Steven Pearlstein has hit the nail on the head. He never lets political ideology get in the way of truth and facts, unlike the vast majority of the so-called news media today. The country would be in much better shape if news was reported Pearlstein-style.

In yesterday’s editorial Pearlstein points to a paper put out by Alan Blinder of Princeton and Mark Zandi at Moody’s Analytics. Blinder was once a vice chairman of the Federal Reserve, and Zandi was an adviser to John McCain. Pearlstein’s editorial wasn’t about the paper, but the Old man considers it the high light of the article. Put in Pearlstein’s words, the paper said:

The government saved the country from another Great Depression. Using a standard econometric model, [Blinder and Zandi] backed out everything the government did to tame the financial crisis and stimulate the economy — the zero interest rates and extraordinary lending by the Fed, the bailouts of the banks and the auto companies, the takeover of Fannie Mae and Freddie Mac, the tax cuts and the infrastructure payments and the money for the states. And what they concluded is that, without these actions, the economy would now be 8 percent smaller, with 8 million fewer jobs and a federal budget deficit this year of $2 trillion rather than $1.4 trillion.

In case you didn’t get it, it was the government that saved us from another Great Depression, albeit with taxpayer money — NOT the [conditional] capitalist!

Although Pearlstein talks about how well the auto industry has faired with government help and the fact that they’ve added 55,000 jobs over the past year after 10 years of layoffs, he doesn’t mention that the first $25 billion the industry got was from the Bush administration. I wouldn’t expect him to mention that, given his intent to remain politically neutral. But the latter fact is something we never hear mentions by the anti-Obama crowd. All they want to do is criticize the bailout funds provided by the Obama administration. And if you’re one of those people, ask yourself this question: How many commoner jobs have the Republicans Wall Street friends provided since they were bailed out?

These are the things those Wall Streeter’s and their public relations news firms would rather not be true, let alone published. Most certainly, the Republican Party and their media cheering section won’t talk about it. But it’s there, and there’s little any of them can do other than what they seem to do best, which is spin the facts if it becomes headline news, then hope the same set of gullible listeners, who depend on only one news source, believe them.