There are many media outlets that have been broadcasting the previous month's gains for the Stock Market as if the Allies Liberated Europe on V-E Day.
Not so fast.
The Dow is the wrong metric to judge our collective fiscal health, and when any news reader takes to the airwaves to celebrate those numbers — he/she hopelessly understates the weakness of the local or national economy. Elected officials keep ignoring the 800 pound gorilla in the room:
“It’s the debt, stupid.”
The cost of living, the lack of credit, and plummeting home values are combining to make ghost towns out of many main streets across Massachusetts. Too often for young and old, married with kids or single adults – they all simply wait to collect their pensions, finish their schooling or job training, and then they bolt the Commonwealth for greener pastures.
Only select groups have truly been bailed out:
1. Chase, Bank of America, Citibank, Fannie Mae and Freddie Mac, etc.
2. The CEOs of failed, start-up companies, (like Evergreen Solar or Solyndra), who have received BILLIONS to try and change consumer behavior in emerging markets not yet commercially viable.
State/Federal officials have NOT yet performed their #1 duty to the American people: Tell us the truth.
The truth is there may yet have to be another massive Rescue Plan akin to what the European Union finally came to terms with in the Greece Debt Crisis. Call it an “Era of Fiscal Austerity” irrespective of market indexes or unemployment rates, led by substantial banking restructuring and large scale spending reform.
Only then will the free market be allowed to grow.
We have wasted three years getting to the business of climbing out of this hole, and toxic assets still sit idle on U.S. banks’ balance sheets.
Under the Troubled Asset Relief Program (TARP) of 2008, according to Treasury Sec. Timothy Geithner, in recent congressional testimony, only 2 Billion out of 700 Billion (that is .3 of one percent) handed over to the Big Banks three years ago has actually been spent on homeowner loan modifications!
The Secretary used the phrase “under-performing” and conceded that under the toothless law, the banks are not compelled to help a single U.S. homeowner in distress. Not one.
So, the programs widely marketed by President Barack Obama and Gov. Deval Patrick as a panacea are mostly bank voluntary and ripe with fraud and incompetence.
Just ask any realtor in MetroWest brave enough to have stayed in the profession.