Free Markets, Free People

Wow – if this is "recovery", I’d hate to see "recession"

Tim "Turbo Tax" Geithner has an op-ed in the New York Times entitled, "Welcome to recovery".

No, really.

Or perhaps I should say that it is a litany of liberal talking points and just plain old fantasy. He has a list of indicators which he’d like you to believe prove we’re just around the corner from full recovery.

I don’t have the time to go through all of them, as much as I’d like too, but a couple caught my eye. For instance, jobs:

Private job growth has returned — not as fast as we would like, but at an earlier stage of this recovery than in the last two recoveries. Manufacturing has generated 136,000 new jobs in the past six months.

That’s just nonsense on a stick. If your best example is a major economic sector which may be adding 23,000 jobs a month, you haven’t much to crow about. Not when you look at the jobs that are going away each month. The reports are not good and pretending they are doesn’t impress anyone and makes what little credibility you might still retain suspect.

And this:

The auto industry is coming back, and the Big Three — Chrysler, Ford and General Motors — are now leaner, generating profits despite lower annual sales.

That’s either a flat out lie or it’s from a second set of books.

e21 points out that if you analyze the auto industry, the news is not good:

The auto companies are certainly not out of the woods yet.  There has been a massive rebuild of negative working capital balances at GM (and Ford).  What does that mean?  Well, working capital is current assets minus liabilities – and it’s a good way to measure whether a company has the liquid assets to grow or build the business (and add shareholder value).  Positive working capital is also a useful measure for gauging a company’s financial resilience.  Negative working capital, on the other hand, means that current liabilities exceed assets – and a firm in this situation can’t spend as aggressively.

How massive is the “rebuild of negative working capital?”  Massive:


Those are monthly figures (GM’s only from Jul 09 when it emerged from bankruptcy).  There’s nothing in those figures that makes any sort of case that the companies are turning a profit.  In fact, if you look at what e21 says, it is clear that they’re still doing what got them into the shape they were in previous to the financial downturn.

Certainly their position hasn’t been helped by slow auto sales (even during the “recovery”), but what all of them could use is some investment help.  Ford could possibly get it but it is also possible investors are not likely to risk their capital on an industry that has a government presence.  Again e21 explains:

The roughshod methods that were used against bondholders in the bailout, the questionable methods used to pick winners and losers in the rush to close thousands of auto dealerships and the favorable treatment given to the unions (followed by the codification of this policy in the Orderly Liquidation Authority in the Dodd-Frank financial regulation bill) serve as the case study for why investors and lenders will be skittish about lending or investing in U.S. companies that have a big union presence and/or would be deemed Too Big To Fail by the government.

And then there’s all the money they owe under TARP.

Like I said, just two of the many examples which are pure fiction.

The rest of his article is an attempt to write a favorable history of the government’s effort – but those who watched it and assessed its results aren’t particularly impressed.  Geithner ends his ramble with this:

And as the president said last week, no one should bet against the American worker, American business and American ingenuity.

No one should be at war against any of those either, yet this administration has been at war with the financial industry, the energy industry and business in general from it’s first day in office.   Perhaps it is time for a little internal administration introspection – honest introspection – with the aim of determining whether they’re part of the problem of part of the solution.  If they actually did that, they’d have to honestly assess themselves as part of the problem.  Geithner’s fantasy piece is all the proof you’ll ever need to know that will never happen.


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16 Responses to Wow – if this is "recovery", I’d hate to see "recession"

  • Indeed, welcome to the jobless, wageless, anemic growth, I-can’t-believe-it’s-not-a-depression “recovery”.
    You’re welcome!

  • He wrote it in the NYT,  it was meant only for the true believers.

  • Sweden…that heaven on earth…has structural unemployment of AT LEAST 9%.
    Sound kinda familiar…?
    Obama either is an economic idiot, or he’s doing exactly to the American economy what he intends.

  • It’s too bad this piece by Geithner can’t be used as the equivalent of testimony taken under oath.  He could be convicted of perjury and thrown in jail where he belongs.

  • That last one was hysterical in a macabre sort of fashion.  I’m not betting against the American worker, business, or ingenuity.  What I am betting on is the government successfully keeping its boot on the neck of all three.  The bet is that this won’t turn out nicely.

  • So we went from the “failed policies of the Bush Administration” to the “vapid polices of the Obama Administration” and a Democratic Congress which have left us in the middle of a slow motion “train wreck” of epic proportions.
    Frankly, if Bush was able to do all he is credited with doing (shoot, he supposedly fooled every global economic institution into lose their senses, not to mention the US) the man deserves something better than a Nobel Prize (it’s overrated now).

  • The problem for republicans is that in order to get a real recovery, we are going to have to endure a recession first.  Home prices have to drop, budgets have to be cut, and jobs will be lost.  My guess is that Republicans will win the congress in november, and maybe even the white house in ’12, but they are just going to pursue the same keynsian policies that got us into this mess.  Just like Bush and Obama.

    • if we are still in recession by 2012, then I feel certain that some new policies will be pursued. Whether they work or not is another question.

  • Manufacturing has generated 136,000 new jobs in the past six months.

    Do you recall snickering at The Dear Golfer ordering the gubmint to cut (IIRC) $100 million out of its budget last year?  We scoffed because $100 million is nothing to Uncle Sugar; SanFran Nan spends that much on liquor for Air Force 3.  However, The Dear Golfer was counting on the fact that, to John Q. Citizen, $100 million is a lot of money.  Turbo Tax Timmy is doing that same thing: he’s hoping that anybody who reads his drivel will think that 136,000 is a a lot of people and not bother to ponder the size of the  size of the whole US labor force.  In effect, Timmeh! is cheering because manufacturing generated a new jobs at about the whopping rate of  about 0.05% per year*.

    I feel so buoyed by this.

    The auto industry is coming back, and the Big Three — Chrysler, Ford and General Motors — are now leaner, generating profits despite lower annual sales.

    Great!  Can we have our money back now?

    When I read stuff like this from The Dear Golfer, Plugs, Timmeh!, and the rest of those idiots and hoodlums in DC, I am reminded of Ming the Merciless from “Flash Gordon”:

    “They will learn to be satisfied with less.”


    (*) According to the BLS, the US labor force is about 154 million people.

  • “are now leaner, generating profits despite lower annual sales.”

    Sure, they are leaner  now that they have stiffed all those GM bondholders who saw their retirement nest eggs vanish. 
    No matter. Old folks lose their sense of taste and they are really making some nutritious dog food these days.