According to Gallup Poll Daily tracking, even after the passage of the $787 billion stimulus plan, “more than three-quarters of Americans [are] saying the economy is getting worse.” Many politicians were hoping that the passage of the stimulus would boost consumer confidence. Their lack of optimism proves that consumers are savvier than the politicians who passed the stimulus.
On the heels of the $787 billion stimulus plan, President Obama announced a $275 billion plan to address the housing crisis. All of this is on top of last fall’s TARP program, which was designed to purchase or insure $700 billion of “troubled assets.”
In a move from billions to trillions, this week’s New York Times article “U.S. Tries a Trillion-Dollar Key for Locked Lending,” notes that “The Obama administration hopes to jump-start this crucial machinery by effectively subsidizing the profits of big private investment firms in the bond markets. The Treasury Department and the Federal Reserve plan to spend as much as $1 trillion to provide low-cost loans and guarantees to hedge funds and private equity firms that buy securities backed by consumer and business loans.”
If you are like me, you have to count the zeros to make sure that you are counting the billions correctly, and trillions may require moving to an exponential notation system. Well before arriving at the trillion mark, I had run out of fingers. New Math is one thing, but this boggles the mind.
This week when asking people about their particular businesses, I got the same response: business is down. It varied by big amounts – some said it was down by a quarter, others down by a third, still others down by a half. Many are already restructuring their businesses, moving to cheaper locations, reducing headcount – others are staying put and simply hoping that the upturn will happen fast enough to save them.
I knew that the week was tough when Wednesday’s tornadoes in the Atlanta area provided a welcome respite from the distressing financial news. At least with the tornado damage there will be no grandstanding about who allowed the tornadoes to occur. Instead, those affected by the tornadoes are focusing on recovering from the damage.
In Honor of His 103rd Birthday, Here Are The 20 Best Quotes From The Late, Great Milton Friedman | John Hawkins