New York Times Leader

The lead article in today’s New York Times, “Flat Jobless Rate a Sign the Worst of Slump is Past,” lists the unemployment rate for February, unchanged at 9.7 percent, and interprets the results as positive news for the economy. As verification of that interpretation, the stock market rallied on Friday upon release of the news.

There does seem to be one unchangeable result of the “Great Recession,” and that is the hardening of lines of our citizens into “two Americas.” The term, first used in John Edwards political campaign, emphasizes the split of our people into two groups, the relatively affluent, and those struggling to make ends meet.

People in the second America don’t travel by car — they use the bus and mass transit. People in the first America have kids who are going to prominent colleges, and, as a result, will be set for life. The kids in the other America attend public schools and tend to drop out or go to vocational community colleges.

The growth of the second America can be seen in the increase of long-term unemployment — people who have been out of work for a year or more. What chance do they ever have of finding new jobs? People in the first America are already experiencing the upturn of the economy.

This split of the United States is dangerous, more so than Republicans and Democrats, and we must find some way to reverse it.

The lead article in today’s New York Times is titled, “In Surprise Move, Fed Signals Pivot to Normal Policy.” The article describes an increase in the interest rate charged to banks for short-term loans from 0.5 percent to 0.75 percent.

The announcement was made after the stock market closed, and it remains to be seen whether this action will touch off a selling spree on Wall Street. The Fed was careful to say that it still considers the economy very fragile and would be moving deliberately.

On the other hand, many in the financial sector may see this as the beginning of a spiral of increasing interest rates, what many see as the inevitable result of pumping so much money into the economy combined with ever-increasing deficits.

It is disconcerting as a citizen to see the power of the big banks and the financial sector compared to the average American. The lobbying efforts of these industries have resulted in a halt to financial reform. Derivatives are still being traded, and business continues much as it did before the financial crisis.

So the rate increase by the Fed just represents one more potential blow to any growing confidence in the recovery of our economy. Especially when the markets react to it as you can bet they will.

The lead article in today’s New York Times is titled, “Party Gridlock Feeds New Fear of a Debt Crisis.” It describes the effect of partisanship on issues of overriding national importance, such as gaining control of the long-term federal debt.

Our current system is widely viewed as dysfunctional, to such an extent that observers worry if anything can wake up our legislators to the urgency of action on long-term issues. Part of the problem involves the dichotomy between short-term and long-term actions; when legislators are concerned about the security of their jobs in the face of current elections, it is hard to convince them to take long-term actions widely viewed as unpopular.

In addition, these unpopular actions vary by party: for the Democrats it concerns cutting popular programs such as Social Security and Medicare while for the Republicans it involves raising taxes to pay for these programs. Thus, the gap between the Parties widens because their respective bases support diametrically opposed, unresolvable policies.

It seems to me that the answer lies in strong Presidential leadership. If President Obama becomes more assertive and uses the bully pulpit of his office, we may be able to make progress. The healthcare summit may prove to be effective in this respect, though it is uncertain how much can be achieved in front of TV cameras. We shall soon see.

The lead story in The New York Times this morning is titled, “Senators Strike Bipartisan Deal on Job Creation.” The story describes an agreement between Senator Max Baucus, Democrat of Montana, and Senator Charles Grasslely, Republican of  Iowa, on a combination of job creation and tax breaks for business. Though the result seemed to have been blessed by leadership on both sides of the aisle, the result was thrown into doubt by some revisions made by Harry Reid, the Democratic majority leader in the Senate.

Apparently, Mr. Reid was concerned by previous Republican negotiating tactics on  healthcare when they had made early progress and then torpedoed the effort by poison pill, political amendments.

And he was right to be concerned. The Republicans  have almost no incentive to bargain in good faith, and their idea of compromise, as President Obama noted, is to get all their proposals passed while giving little in return. Senator Reid was rightly concerned by some rumblings from Mitch McConnell and some special deals for some senators that could be attacked by the Republicans just like they did for Senator Ben Nelson in the healthcare debate.

Let the Republicans remember for a change who won the last election. And the latest CBS/New  York Times polls seems to put the public on the Democrats side as far as trust and lack of ulterior motives.

The lead article in The New York Times today is titled, “Jobless Rate Falls to 9.7%. Giving Hope Worst is Over.” It describes the fall from the 10 percent rate last month despite the net loss of jobs.

Talk about rose- color glasses, or grasping for straws, or seeing the glass as half full … or any other metaphor you can think of. Surely, we can hope for something better than this. Being happy at a net loss of jobs?

Yes, there are some positive signs. Manufacturing jobs increased as did temporary workers — indicating a need for more labor hours even if businesses aren’t hiring new full-time employees. But with the number of people who’ve lost their jobs — what is it eight million now? And the continuing blight of foreclosures? And an increased likelihood of a double-dip recession?

We need some new legislation from Washington that addresses these problems. Just like the automobile industry was resuscitated by “cash for klunkers,” we need to resuscitate the out-of-work and under-employed in this nation. Only in that way will we start to generate the badly needed revenues that will bring us out of this mess.

Let’s hope the Democrats and Republicans can work together for a change to help a nation in crisis. It’s no longer just the tea partyers who are angry.

The lead article in today’s New York Times is titled, “Markets Routed as Worry Grows on Europe Debt.” It describes a decline in the Dow Jones stock market index after news about the weak economic situation in Greece, Portugal, Spain and Ireland.

Since these countries share a common currency with stronger nations such as France and Germany, the whole continent is affected, and now the troubles have started to impact the Dow Jones index as well. In fact, the index temporarily fell below the 10,000 mark for the first time in months.

All this reminds us about the fragility of the global economy and the fact that things remain unsettled after the recent worldwide financial crisis. For those in the United States who are predicting a double dip recession, it does little to assuage their worries.

And what effect does news like this have on the individual investor, the middle class taxpayers who have seen a rapid decline in net worth thanks to events far out of their control? It’s just one more straw on the camel’s back regarding concern for the future.

Many have remarked how this generation of Americans is the first who believe their children will be worse off than they are. This is all a sad commentary on the hope that was once endemic in this nation.

The lead article in today’s New York Times is a news analysis titled, “A Red-Ink Decade.” It describes the limited options for future Presidents in light of the size of the deficit and the necessity to address it.

Apparently, President Obama’s projections call for significant deficits for the next ten years. This makes it highly unlikely that future Presidents will have the opportunity for any domestic programs. It is compared in the article to homeowners whose mortgage is greater than the value of the house; in other words, the American government is “under water.”

The article also makes several astute political observations including the unwillingness of the Republicans to raise taxes and the unwillingness of the Democrats to cut programs, especially Social Security. In light of these limitations, the article paints a very pessimistic picture of their implications.

The article concludes on a somewhat optimistic note, citing Stein’s law. “If a trend cannot continue, it will stop.” In fact, the addressing of the problem on the front page of The New York Times means that even a so-called liberal newspaper is increasing awareness of the situation.

Ideally, President Obama will stimulate the economy in the short run, boosting jobs, and therefore revenue, and will ride that additional revenue to reduce the deficit. Sounds easy on paper …

The lead story in today’s New York Times is titled, “Fed Chief Wins a Second Term Despite Critics.” The vote was the weakest in history for the Chairman of the Federal Reserve, 70-30.

Ben Bernanke is simultaneously viewed as the architect and savior of today’s economy. His lax policy positions caused it, and many view his rapid bailouts as saving it.  According to the article, Senator Jeff Merkley of Oregon made one of the most strident remarks, accusing Bernanke of helping to “set the fire that destroyed our economy.”

The attacks on Bernanke, in my opinion, represent a desparate attempt to find a scapegoat. It’s easier to blame the Fed than your own institution. In reality, virtually noone anticipated the bursting of the housing or credit card market bubbles.

The attacks by Senators at the confirmation hearings were mainly meant for the general public who are outraged at the enormous bonuses still being awarded at major banks. This is an election year, and after the upset by Scott Brown, no incumbent feels very much at ease about their own chances.

The alliance of nay voters included some very unusual coalitions including, for example, the only Socialist, Vermont Senator, Barry Sanders, and the Republican conservative, Jeff Sessions of Alabama.

One can only hope the renomination will become less and less important as Happy Days Come Here Again.

The lead article in today’s New York Times is titled, “Obama, On Own, to Set Up Panel on Nation’s Debt.” It describes the failure to do so by Congress — the vote was 53 in favor in the Senate when they needed 60 votes — but the new commission will have no legal authority to force Congress to act.

The death of the commission in the Senate shows the hypocrisy of both parties in the attempt to get the budget under control. Democratic liberals were afraid of Medicare, Medicaid and Social Security cuts while Republicans were afraid of an attempt to raise taxes. The Democrats were also upset by the exemption of the military from the Commission’s jurisdiction while social programs remained a prominent target.

Well, this new executive commission is a little flabergasting. It seems like a waste of time because Congress will do whatever it wants in any case. Meanwhile, the President is buffeted by two opposing forces: the pressure to create jobs in the short term, involving more spending, and the pressure to balance the budget in the long term, involving less spending. His proposed three-year freeze on 8 percent of the government’s expenditures already seems to have been discounted.

Well, let’s see how the State of the Union goes tonight. I’m still upset by the refusal of the House to pass the Senate’s healthcare bill!

The lead article in today’s New York Times is titled, “Obama to Offer Aid for Families in State of Union.” It describes some issues the President will address in his speech including initiatives designed to help middle-class families, senior citizens and students paying back college loans.

Negotiations are still ongoing regarding the healthcare bill, and it is unsure how the President will treat it. Most of the proposals are small-budget items, primarily because of the loss of the election in Massachusetts and the feeling that the people are angry about the rapidly increasing deficit. In fact, the article directly compares President Obama’s new agenda to the “go small” approach of the Clinton White House during a similar time of trouble.

As a political Obama fan, I can’t help but feel a sense of extreme disappointment and sadness while reading the article. There was so much hope for his Presidency, and the current floundering around represents a failure of what might have been. If it weren’t for the Massachusetts election, we would be finishing up healthcare and going on to the next step to help the American people.

How can the voters be so ignorant and manipulated by the Republicans? One day, they will realize they were duped, but it will be too late. Here’s a special dart aimed at you, Mr. DeMint. May it be on your conscience what you’ve truly done. Yes, you’ ve achieved the Waterloo you wished for, on the backs of the American middle class.