Economic Mire Spreads Like Oil, Europeans Getting Tarred.

Virgin Oil

The economic news is all over the place, with the latest batch of factoids being a general sluggishness in private sector hiring. We realized that fact with unintended irony, since our private school ended the school year last Thursday with several employee contracts going unrenewed. The stock market took the news--the broader unemployment news--with some alarm, sending the Dow down below 10,000.

We are inclined to believe that this week will take the Dow down further, since there is nothing explicitly positive on the horizon to liven the spirits of people who pay attention to things like this. Other than, maybe summer and vacations.

As we speak at this later hour, the day officially Monday at 12:01 a.m. here in a blazing hot Phoenix, markets in Asia are getting fusty and reacting to our previous week's sell off and concerns about Hungary.

"The problem seems like a cancerous thing -- it's spreading from smaller country to smaller country, and many people are afraid that it will spread to a big country like France or Germany, although that's unlikely," said Jackson Wong, vice president at Tanrich Securities, in Hong Kong.

(AP via Yahoo)

None of this is entirely shocking, but it contrasts interestingly with various article titles I have seen with people admonishing the President, "It's your economy now!" This is tossed out as a way of saying that the president cannot blame the previous administration for any problems now that we are a year or more into his presidency. His critics are becoming bolder in their attempts to manufacture an image of a man who has done nothing during this time. Republicans in particular are not inclined to give him any specific credit, dismissing every piece of legislation and every act passed as some sort of monstrosity. He has done nothing, and...AND, he is not improving the job market. Unreconstructed laissez faire types are spitting this nonsense into the ocean-like expanse of the American mind.

Bad Oil

But let's be real here. You really cannot divorce the ongoing economic turmoil from the policies of the past, nor can you fix such turmoil easily or quickly. Compare it to the BP rig collapse and oil leakage. A year from now when the well is capped or cemented or blown up and coastal shores are still cleaning up the mess, imagine any sane person coming along and saying, "Well you can't blame BP, it's the Louisiana government's issue now." Nonsense. You cannot leapfrog culpability or causality.

Every single moment of our unemployed, credit rocked, under capitalized world is a function of previous policies from many presidents. And it's not nearly an American problem. It's a world problem, with many nations having followed our lead into murky financial waters.

Early last month, in an indication of just how dangerous the situation had become, European banks — which appear to hold more than half of that $2.6 trillion in debt — nearly stopped lending money to one another.

(N.Y. Times)

We have a habit of viewing everything in isolation, causality removed, perspective truncated. With Europe on the fritz and not exactly taking the bold action the U.S. took in the last two years, we are now faced with the risk of getting the blowback of our sins blown back at us. We led in the manufacturing of false prosperity and easy money, and European financial institutions followed our lead. Now they suffer, and if that pain is deep and hard enough, we will also hurt and remain mired in sluggish to non-existent job growth.

What Obama can realistically do about it remains to be seen. Righting the economy quickly is like cleaning up an oil spill quickly. Can't quite be done. The cleanup is long term, and there is a fight every step of the way as those responsible for lax oversight seek to shirk responsibility and deflect an accounting.

Pure Oil

What you cannot do is have it all ways in a consolidated "theory of everything" that begins with an Obama big bang explosion as the root cause of every single piece of man-made disaster extant in the U.S., and for a recession that began in December of 2007, and whose roots go deep into the depths of American spending, monetary, regulatory and credit habits.  Or rather, you can have it all ways, but you will sound like an idiot to anyone with half a brain to read between the lies.