Coral Gables: Looking for Good Economic News and Real City Financial Policies

I continue to look for an analysis that leads me to think that we will soon see an economic recovery lead by consumer spending and private business activity.  But I keep finding solid evaluations that lead me to believe that it will take many years for unemployment and the private economy to respond.

I mention a.  Basically, he reminds us that the Obama Administration and the Congress have failed to provide enough government stimulus, have failed in fixing the billions of dollars of underwater mortgages and threw all of the cost of the financial debacle on taxpayers (rather than on the owners of the banks and investment houses who speculated in mortgages).  Basically, this is a failure of Obama, the Congress and the Fed.

He concludes that

…the future looks bleak. The last two recessions before this one–the early 1990s and early 2000s recessions–both had a financial crisis component. And after those recessions there were no visible signs of the magic of the market returning the economy to full employment through the economy’s natural processes, at least not until something else new came along. In the case of the 1990s the new thing that came along was the dot-com bubble and the technology explosion. In the case of the 2000s the new thing that came along was the housing boom and the coming of mortgage securitization.

Thus I can see no reason to believe that there will be substantial private sector forces to push the employment-to-population [ratio] up anywhere toward normal over the next several years. And we have shot ourselves in the head with respect to expansionary government policies. I see no possibility for any such on a large scale [recovery] for the next two years, and possibly for longer.

Message for the city government of Coral Gables:  you need to plan for the future and you should find a better balance of sacrifice between government, its employees and taxpayers.

About Stephen E. McGaughey
International consultant in economic development programs and projects

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