Mort Zuckerman Laments "The End Of American Optimism", Takes His Criticism Of Obama To A Whole New Level

Tyler Durden's picture

Mort Zuckerman has not kept his displeasure with Obama's economic policies secret. A mere two months ago, the Boston Properties Chariman penned "Obama Is Barely Treading Water" - one of the most critical missives by the corporate oligarchy targeted at the president. A few days ago, he followed up with an even more angry op-ed for the WSJ, titled simply enough: "The End of American Optimism" which concludes simply that the gridlock in the economy, driven by the two sets of opposing interest of Wall Street and Main Street is strategically spilling over into the political arena, and that the country is pretty much doomed to years of economic deterioration unless a clear, independent leader emerges in the meantime (and whose candidacy is not tactically "blocked" by the money lobby of Wall Street, which is the only party more than happy to preserve the status quo): "if
the economic scene these days is daunting, the political scene is
downright depressing. We have a paralyzed system. Neither the Democrats
nor the Republicans seem able to find common ground to address what is
clearly going to be an ongoing employment crisis. Finding that common
ground is a job opportunity for real leaders.
"

From the Wall Street Journal:

The End of American Optimism

Our brief national encounter with optimism is now well and truly over. We have had the greatest fiscal and monetary stimulus in modern times. We have had a whole series of programs to pay people to buy cars, purchase homes, pay off their mortgages, weatherize their homes, and install solar paneling on their roofs. Yet the recovery remains feeble and the aftershocks of the post-bubble credit collapse are ongoing.

We are at least 2.5 million jobs short of getting back to the unemployment rate of under 8% promised by the Obama administration. Concern grows that we are looking at a double-dip recession and hovering on the brink of a destructive deflation. Things are bad enough for Federal Reserve Chairman Ben Bernanke to have characterized the economic outlook late last month as "unusually uncertain."

Are we at the end of the post-World War II period of growth? Tons of money have been shoveled in to rescue reckless banks and fill the huge hole in the economy, but nothing is working the way it normally had in all our previous crises.

Rather, we are in what a number of economists are referring to as the "new normal." This is a much slower-growing economy that, recent surveys have revealed, is causing many Americans to distance themselves from the long-held assumption that their children will have it better than they.

What was thought to be normal in the context of post-World War II recoveries? One is that four quarters into the recovery, real GDP would expand at an annual rate over 6%. We are coming out of the current recession at a 2.4% growth rate.

We did enjoy a GDP boost from a buildup of inventories anticipating a recovery at normal speed, but it didn't happen. David Rosenberg, chief economist of Gluskin Sheff, regards it as "frightening" that whereas the "normal" rate of increase in final sales is 4% annually, this time sales have averaged only 1.2%, the weakest revival in recorded history.

At this point after the onset of a recession, employment payrolls have typically exceeded 700,000 jobs above the previous peak. In this recession, we are still down roughly eight million jobs from the December 2007 peak. As for consumer confidence, the Conference Board survey shows an average a full 20 points below the average lows of previous recessions.

There seems to be a structural change in the American economy. The
relationship of household debt to income has proven unsustainable. The
ratio is normally established somewhere below 100%, but in 2007 the debt
ratio hit 131% of income. It has now fallen to 122%, but at this pace
it would take another five years to bring it under 100%. The pre-bubble
norm was 70%. To get to this ratio again, debt would have to be reduced
by about $6 trillion.

In the meantime, we may well be looking at a
vicious cycle of defaults that in turn would produce credit tightening
and still more economic weakness—compounding the caution among
borrowers, lenders and public financial authorities.

The most
obvious source of distress right now is lack of payroll growth, and it's
likely to get worse. Real unemployment today is well above the headline
number of 9.5%. That number held steady only because 1,115,000 people
gave up hope of finding work and left the labor force in the last three
months. Otherwise the headline unemployment rate would have been around
10.4%.

Now there are at least 14.5 million Americans still
searching for work: 1.4 million of them have been jobless for more than
99 weeks, 6.5 million have been jobless for over 27 weeks. This is a
stunning reflection of the longer-term unemployment we are coping with.

The
unemployment numbers are worse than reported. Last year the Labor
Department admitted it over-counted the number of jobs by 1.4 million.
Why? Because they used a computer program that tries to extrapolate how
many new companies are being created during each month and then
estimates the number of jobs these firms should be creating. They were
wrong.

Since April, the Labor Department has counted 550,000
nonexistent jobs under this so-called birth/death series. Without these
phantom jobs, the economy this year created virtually no jobs—certainly
not the 600,000 the administration has been touting.

The Obama
administration projects the unemployment rate will drop to 8.7% by the
end of next year and 6.8% by 2013. That is totally unrealistic. It means
we would have to add nearly 300,000 jobs a month over the next three
years. At the rate we're going, it will take anywhere from six to nine
years to climb out of this hole. The labor market may be improving, but
the pace is glacial.

If there is one great policy failure of this recession, it's that we
have not used the crisis to introduce structural reforms. For example,
we have a gross mismatch of available skills and demonstrable needs.
Businesses struggle to find the skills and talents that are needed to
compete in this new world. Millions drawing the dole to sit around
should be in training for the jobs of the future that require higher
educational skills.

Given that nearly eight in 10 new jobs,
according to the administration, will require work-force training or
higher education, it furthermore makes no sense that we have reversed
the traditional American policy of welcoming skilled immigrants and
integrating them into our economy. Because of a recrudescent nativism,
we send home thousands upon thousands of foreign students who have
gotten masters and doctoral degrees in the hard sciences at American
universities. These are people who create jobs, not displace them. The
incorporation of immigrants used to be one of the core competencies of
our economy. It's time to return to that successful model.

Higher
education is another critical issue. As President Obama pointed out
last week in his speech at the University of Texas, we have fallen from
first to 12th in college graduation rates for young adults. The
unemployment rate for those who have never gone to college is almost
double what it is for those who have.

Education may be the key
economic issue of our time, Mr. Obama said in his speech, for "countries
that out-educate us today . . . will out-compete us tomorrow." To
improve our performance will involve massive increases in scholarship
support for higher education, and an increase in H-1B visas for foreign
students who get M.A.s and Ph.D.s in the hard sciences.

But if
the economic scene these days is daunting, the political scene is
downright depressing. We have a paralyzed system. Neither the Democrats
nor the Republicans seem able to find common ground to address what is
clearly going to be an ongoing employment crisis. Finding that common
ground is a job opportunity for real leaders.

h/t Mark Mansfield

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megatoxic's picture

Translation:

Oy, vey!  Attack Iran, already, Mr. President! 

NotApplicable's picture

No, no, no, we need a new cold-war, that's all.

The real translation: Mid-term elections are coming!

Bananamerican's picture

in a sellout globalist nutshell...

"...will involve massive increases...in H-1B visas"

to hell with you Mortimer 

jeff montanye's picture

you misquote him intentionally.  he has a point and a good one.  regarding the oy vey above, mort is not good on the zionist entity but he had the sense to leave it out of this essay.  would we rather have phd immigrants or illiterate ones?  we're certainly getting the latter.  

he's a member of the ruling class, no question, and his u.s. news and world report suffers from the myriad faults of most of the msm.  but his critique above is pretty accurate as far as it goes.  education is hardly the only answer to the weak median wage growth of the last forty years but it wouldn't hurt to improve it.  his larger point that the worst failure of the pathetic current administration is not to institute structural reforms is unassailable.   

Timmay's picture

Cut off Wall Street credit lines, stop Gov spending, Cut Corp. and Individual taxes for a defined period of time, raise tariffs on all imported goods, Raise interest rates for a defined period of time, raise middle finger to China. Boom! Recovery.

Breaker's picture

" "if the economic scene these days is daunting, the political scene is downright depressing. We have a paralyzed system."

This quote, from the article, actually highlights the problem. Everyone assumes that a paralyzed system is bad. That we need a leader who can unite left and right and "get things done." We saw what happened in the 12 months after Obama and the Democrats got complete control of the government. No paralysis at all. And what a disaster.

As you say, we need to cut gvt. spending dramatically. We're not going to get that regardless. But we might get a paralyzed government, which may be the best we can hope for. A group of paralyzed man have a harder time mugging you than does a healthy mob.

The author wants a healthy mob in congress and the white house. He is sincere, I think. But shares the delusion of the ruling class that the government is capable of doing much good if the parties would just hold hands and sing Kumbaya. The idea of a united congress terrifies me.

bob_dabolina's picture

He is clearly rascist republican.

When is his next clan meeting?

fxrxexexdxoxmx's picture

Racism is the tool and heart of Democrats. Without racism how in the hell did this Obama idiot get into any position of authority? Obama is dimmer and less intelligent than fucking Bush.

Careless Whisper's picture

he's a bilderberger. if you don't know what that is, it will be worth your while to educate yourself on who really runs our economy.

If there is one great policy failure of this recession, it's that we have not used the crisis to introduce structural reforms.

the only structural reform we need is to nationalize the private banking cartel known as the federal reserve, which is a privately owned bank beholden to the international banksters.

mister zuckerman, please peddle your bilderberg crap somewhere else.

Ricky Bobby's picture

We don't need no stinkin Middle Class. We have 300,000,000 Chinese slaves. If they ask for a raise then substitue with 300,000,000 Indian slaves.

Jason T's picture

American British Imperialism bitchez

John Self's picture

Vietnam.  That's where the sweatshops go when the Chinese ask gets too high.

anony's picture

"We have a paralyzed system".

Duh....You can't govern a nation of millions of square miles, multi-cultural, multi-racial, multi-religious, multi-everything people who don't much give a merde about one another.  

When in hell has it ever been done, but disastrously?? 

Bust the damned thing up into manageable pieces. 30-40 regions ought to do it.  The African/European model is light years ahead of us. Many nations on one continent.

No, it's not the most efficient, but if the people in France want to burn the cars and strike the Metro, they can do it in five minutes of organization.

Try that here.

We can take what we've learned reverse the Global Order New Order of the Bushies, Clintonites, and other power mad narcissists who can't govern their own personal behavior, let alone a nation growing to 400,000,000 diversified people.

Break the fucking country up or live with paralysis, global corruption, and chaos.

 

megatoxic's picture

I like this idea.

Personally, I no longer give a fuck what happens to Californians, New Yawkers, and coastal elites in general.  I'm happy to trade with them, but I'd really rather not have them writing my laws for me, telling me how to live my life, etc.

 

Mad Max's picture

You like it - I LOVE IT.  But how could we find roughly 30-40 administrative regions within our 50 states?  ???  Anyone?  Anyone?

Hey, I've got an idea.  FEDERALISM.  That thing that we had until FDR obliterated the Constitution.  50 states might be a bit much - we'll let the Dakotas merge (if they want) , ditto for true New England, maybe Oregon and Washington will want to cozy up, who knows.

I am in 100% agreement about not caring a fuck about NY and Kalifornia.  I feel more kinship with Ontario, Canada generally, and frankly even the UK than I do with those states.

Rick Masters's picture

I second that. And I'm from the Northeast. Check out the number of federal dollars received and paid in between the states on the coasts and the the so-called freshwater states. You would be fucked. Sure you got the grains; we got the ports. Tariffs bitchez! I'm being very facetious and I apologize; I really don't think we should seperate.

Mad Max's picture

Most states would do just fine on their own, EXCEPT the New York-Virginia corridor of government and thievery.  The midwest can happily export its products in any other direction, or just establish a trade route by force.  It's not as if any large number of citizen-soldiers arise from the native population of the government corridor.  If you want to talk about force, it would be the SE and Texas that people would have to fear.

But, anyway, this is all just internet wanking talk...

Incubus's picture

ok, but give me time to gtfo of glennbeckistan before you break the damn thing up

Mad Max's picture

Your own damn fault for moving there in the first place!  (Wherever it may be.)

megatoxic's picture

Gladly.  I'd really prefer not to have to share whatever ends up being my parcel of the country with fucktards like you.

You'll do better Federal Reservistan, anyway.

Incubus's picture

yeah... call me crazy, but 'freedom' is subjective.

 

I'd rather do my years and have infrastructure than live out in the middle of nowhere...with my land and...livestock?

Who cares if it's all a sham, they reset things and after a while, we'll get to pretend everything's rosey again. I'll get old, and everyone will be pretending still, to hell with future generations if the ponzi unravels on them, so what: they face a couple of years/decades of tough times until there's a new system to draw the labor & wealth from the masses.

 

It's sisyphean in the grand scheme of things, but I'm not entertaining any illusions of making a better future for people who won't give a damn about me.

what... bust my ass improving society, so my great great grand-kids can look at photos of me, all teary-eyed?  Puh-leeze.

Take what you can out of it, screw those that didn't make it out... so sorry, better luck next time, pals.

Dr Emilio Lizardo's picture

Ever thought of running for office?  You'd fit right in.

I can't determine whether you're a symptom or part of the disease that is eating this country. 

grunion's picture

Your spiritual house is not in order. Wherever you go, you will be miserable until you make some fundamental changes. Do that and be pleasantly surprised...

Breaker's picture

"Bust the damned thing up into manageable pieces. 30-40 regions ought to do it."

Actually, America started as a federal republic. The states were a lot as you describe in your post. The federal government was small and weak. Obviously, the configuration was unstable over time in the face of an ever increasing and ever more powerful federal government.

Milestones's picture

why not consider going back to the scheme of city-states of ancient Greece.? Maybe some of you might have picked this up from Naked Capitalism a couple of days ago. That was my first thought as well as the almost certain coming genicide due to demographics.  Milestones

 

Beyond City Limits Parag Khanna, Foreign Policy (hat tip reader John D). Today’s must read

pyite's picture

This is not nearly as direct an attack on Obama as his last article.  Clearly, both major parties need to act like adults/leaders and work to get rid of the unpayable debt ASAP.

What depresses me is that the partisan divide gets worse and worse.  If a problem is "bipartisan," nothing will happen until it is too late.

The government needs to make personal bankruptcy easier, and should put derivatives at the end of the line when it comes to resolution of bankrupt corporations.  In other words - embrace the deflation and get it over with already.

VK's picture

But there is bipartisanship between the DemocRATS and RepubliCONS, to screw over America! That's what you're dear leaders are for. It ain't about left or right, it's about corporate power. And what the corporations want, they get. Without regard for the rule of law or justice. This is what fascism is, both parties are clearly working together to screw America over. Just grab some KY Jelly America, you're going to need it.

Serf's up!!

rocker's picture

Excellent VK. Could not have been said any better by anybody. The party of yes we can screwed by the just say no.

Bottom line is what the corporations want. They are the real power. What scares me is that now our Supreme Court has

decided that America is no longer for or by the people.

Corporations will now control the media, which the mostly do already, with the power of any amount of money than need to control the sheepies minds.

What's really scary is that foreign corporations or entities, such as the Saudi Oil interest, will be financing presidential

campaigns too.  We are now a real third world nation without hope or a voice.

But hey, Godman Shafts is doing well.  We paid for Lord Blankfeins 100 million dollar bonus.  Go Bankers.

Mad Mad Woman's picture

Rocker rocks!  You and VK are right on the money.  We're fucked.

grunion's picture

Corporate personage made man of machine and wants to rule. End the privilige. End corporate personage.

New_Meat's picture

pyite:

"What depresses me is that the partisan divide gets worse and worse."

I don't get it.  The republicans have minorities in both houses.  There is no divide-dems can do anything they want to do.

So don't be depressed at the divide, it doesn't exits.

- Ned

RockyRacoon's picture

Thassafact.  And we wonder why politicians won't ever give a straight answer:  Obama's "promise" of that 8% unemployment rate was a big mistake!  It gets quoted right back to him every 5 minutes of the day.  If he had been wishy-washy and not given a hard number we would have to fall back on some other "fact" or "promise" to ream him about.  No wonder politicians never answer questions!

grunion's picture

It is hard for him to answer a question with so many lies to remember.

grunion's picture

It is hard for him to answer a question with so many lies to remember.

trav7777's picture

Mort, you and your cousins need to go strangle some other nation

cossack55's picture

...job opportunity for real leaders."   All real leaders have long since been outsourced or otherwise fled this sinking piece of shit.

I am too old to lead and everyone I know doesn't need a leader anyway.

sharonsj's picture

What do you expect?  You didn't need a college degree to work in a manufacturing facility or be a file clerk.  But those jobs are gone and aren't coming back.  So you want those high school grads (and dropouts) to go back to school?  They can't afford it.  College fees are skyrocketing and people can't take on any more debt.

 

Instead of bailing out the banksters, the government should have bailed out the average citizen.  Instead of making Halliburton richer with two wars, we should use the money to rebuild our crumbling infrastructure with all those idle construction workers.  There's a lot that could be done, but I doubt the corporate clowns in Congress will do it.

Dr Emilio Lizardo's picture

How about NOT bailing out anyone...failure used to be an option, and a damn fine lesson in life

John Self's picture

Yes, in fact, the whole reason that college costs are skyrocketing is because the government is involved in the college funding process.  You can see it most clearly now in the for-profit colleges that are under the microscope these days, but it's the same scam in "real" colleges too.  Get the government out and let the market determine the value of college education.

Votewithabullet's picture

 Ya cant get thar from hare.

uraniuman's picture

Excellent plan -- Gridlock will help us all conserve on the KYjelly.

Milestones's picture

Why not make job retraining a s part and parcel of unemployment pay. Training could take place in existing businesses locations as potential free trainees to learn the new skills needed.Everyone gains: The unemployed get some training and the busineeman gets leads on new potential employee's when help is needed.    Milestones

MilleniumJane's picture

@sharonsj:  Amen and hallelujah.  I would love to finish my degree, but I am not willing to end up $100,000 in the hole.  I have a family to provide for.

 

Short of winning the state lottery, I see no way of returning to school in the near future. 

 

The higher education system is a great balloon ready to burst.  The higher tuition rates are scandulous.  If the government was serious about making sure our citizens were receiving the best education in the world, they could have taken measures to stop this bullshit a long time ago.

MilleniumJane's picture

@sharonsj:  Amen and hallelujah.  I would love to finish my degree, but I am not willing to end up $100,000 in the hole.  I have a family to provide for.

 

Short of winning the state lottery, I see no way of returning to school in the near future. 

 

The higher education system is a great balloon ready to burst.  The higher tuition rates are scandulous.  If the government was serious about making sure our citizens were receiving the best education in the world, they could have taken measures to stop this bullshit a long time ago.

MilleniumJane's picture

Apologies to all for the double post.

KevinB's picture

Not that I disagree with your comment, but just to add on:

First, going back to college is not only financially not on, it's not academically not on either. Today's high school kid is, for the most part, tragically unequipped to study maths or science or medicine; a significant portion can't read past a grade 6 level, let alone do calculus or trig. So what are they going to study? Anthropology? Literature? or (shudder) economics?

The only hope for North America to get back anything close to its former standard of living is a complete shake up of the educational establishment, from Grade 1 upwards. Crush the teachers unions, disband the NEA (that's the National Education Association, not the Nat'l Endowment for the Arts, though I wouldn't mind trashing that either), reintroduce such sticks as punishment, expulsion, keeping kids back, and load on incentives - scholarships, prizes, recognition, privileges, etc. - for kids who do well. It will take 20 years, but it's the only hope we've got.

Dr Emilio Lizardo's picture

"Education may be the key economic issue of our time"

 

Amen. We're being ruled by a bunch of highly educated statist fools.

(intelligence + knowledge) != wisdom

grunion's picture

I guess experience is no longer applicable?

grunion's picture

I guess experience is no longer applicable?