Posted on 07/09/2011 6:24:25 AM PDT by SeekAndFind
For almost two years, federal stimulus cash has kept New York City's economy going like gangbusters. We shouldn't say thanks, though. Being on the dole will end up hurting Gotham.
Since 2009, the city has gained back some 90,000 of the 132,000 private-sector jobs it lost from 2008 to 2009, according to Mayor Bloomberg's June economic report -- about 70 percent, while the nation as a whole has replaced only 20 percent of its lost jobs.
Even as a national rebound stalled in early spring, New York's recovery accelerated. Last year, the city gained 4,500 private jobs each month, but between February and May, it gained 6,800.
Wall Street has zoomed for two years by gorging on federally backed loans people really can't afford.
Why? It's not that Wall Street and banking have been adding jobs -- finance jobs are 8 percent off bubble figures. Rather, banks have been profiting from Washington's open credit spigot.
In 2009, Wall Street firms made $61.4 billion -- three times the record $20.9 billion in 2006. In the first three quarters of 2010, the street took in another $21.4 billion.
That money goes into other local industries. Leisure and restaurant jobs have surpassed their bubble-era highs. Computer programmers, consultants and advertisers who work for finance are doing well, too.
It all sounds nice -- but it's really a disaster.
(Excerpt) Read more at nypost.com ...
Obama and Geithner seemed to have been betting the stimulus would tide their favorites over until the economic earthquake passed, but they didn’t count on a tsunami to follow.
You mean they are finally running out of other people’s money?
This was the real disaster of the porculous bills and the qe’s.
Didn’t solve a single thing...just deferred the inevitable.
Buh-bye, now.
A lot of people ( especially Democrats ) do not understand the difference between economic activity that is LONG LASTING and BUSINESS DECISIONS that work on CERTAINTY with those that are government driven and TEMPORARY.
Businesses want policies and regulations that they can work with and plan and depend on for the long term, not one that they are not sure will be there tomorrow.
Unfortunately, government injecting themselves and politics into business policy is accomplishing just that — UNCERTAINTY.
That’s the reason businesses are reluctant to expand and hire.
Washington’s “stimulus” artificially prompted people to borrow more money to fill in the holes in the housing market and in consumer spending.
The Federal Government now guarantees now back half of home and consumer loans.
Like a predatory lender, the government for two years offered first-time homebuyers a reward upfront for buying overpriced homes they couldn’t afford.
The Fed, for its part, launched programs to pretty up their bad investments, including one called TALF, which allows banks to park bad debt securities at the Fed for five years in return for good cash.
But the home-buyer credit ended last year (As did Cash for Clunkers) for all but veterans — and bank profits are already sinking.
As the government’s efforts to prop up home prices stalls, more people will walk away, causing more defaults and more losses on old mortgages. And as the Federal Reserve steps back from its own extraordinary policies to encourage borrowing and lending, banks’ profits on buying and selling debt securities are falling, too.
Wall Street already knows this. That is why you will observe that the current trend is to hire only CONTRACTORS (not full timers ) and also to RISING LAY OFF WORKERS.
See here :
http://www.theatlantic.com/business/archive/2011/06/whats-driving-rising-wall-street-layoffs/240904/
and here:
http://gothamist.com/2011/06/17/schadenfreude_index_passes_10000_wa.php
Most of it was not even Keynesian. Most of the stimulus money went to state and local governments to paper over their massive debt problems and keep government workers working. Now that the money is gone, the local government still face the over employment crisis they faced in 2007-2008.
all the 0 stimulus did was delay the pain, now those chicken's are coming home to roost.
And the democrats intended to keep the fake stimulus going too postpone the inevitable crash until after the 2012 election
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