Recovery?

Manufacturing at a 3-1/2 year high



Purchasing managers' index of manufacturing activity shows growth for the third straight month, indicating a 'sustainable recovery.'

Ford reports a nearly $1 billion profit


The only U.S. automaker to avoid bankruptcy posts an unexpected profit thanks to a big lift from Cash for Clunkers sales.

Home sales contracts rise for 8th straight month


Real estate rally attributed to first-time homebuyer tax credit that expires at the end of November

Stimulus creates 640,000 jobs


White House releases first broad look at stimulus-funded employment, focusing on $150 billion in spending. But skeptics question the number and quality of the jobs.

Reading the above headlines on CNN.com would give you the impression that apparently the country is emerging from a deep recession which would be a positive sign for the country if it could truly be considered a sustainable recovery. But as corporations are showing profits (although still trailing the profits that Goldman Sachs has shown) the average Americans haven’t quite seen this recovery hit their own pocket-books. Another running theme seems to be that a lot of these turn-around seem to be tied to government intervention including ‘cash for clunkers’ and ‘homebuyers credit’ so to call this sustainable may imply that they would have to remain partially funded by government programs. It all points to the Stimulus money, which may show its merit but if it’s just a propped up recovery than what happens when the stimulus money runs out?   I think calling any of this recovery sustainable without considering the government funding is premature

But this is where I’m always a bit confused in terms of capitalism. People will scream that the government intervening but so often those are the same people who themselves benefit from the crutch. If you have a guy screaming about public options because they will raise the national dept but not mention that the only reason they have been so successful is because of the pay-roll tax credit given for them offering health care. The manufacturing sector which is comprised of a bunch of Harley driving, tattoo having, Obama hating but when their jobs are sustained by government intervention nobody is bitching. Take the banking industry who will tell you that government involvement can’t understand their complexity and should not regulate them but then take handouts left and right.

See everybody complains except when they are getting hand-jobs under the table.


So where are we really? I think most American’s feel sick when they see Goldman Sachs show big earnings because they received TARP money both directly and also indirectly through AIG but the bigger picture is that they got a global confidence boost because it’s well established that our government has decided that this is the kind of company Too Big to Fail.

The only way to avoid this is to not allow any big companies (in any industry) to become Too Big to Fail and also by letting bad companies to die