You can’t be serious! Federal Reserve chairman Ben Bernanke says what anybody with a passing interest in economics already knows — that it will take time for the economy to turn the corner — and the market tanks. The market seemed punch drunk on the massive stabilization packages — $2.5 trillion and counting — that the industrialized world was showering on failing financial institutions. A mere 36 hours later, though, Wall Street realized that it cannot regain its strength without a healthy Main Street. It was a weakening labor market, following a bursting housing bubble, that contributed to the massive foreclosure wave and to the crisis. No amount of tinkering with the stabilization package will detract from the fact that people and businesses need more income, not loans, to pay their bills and to invest in their future. It should be clear by now to everybody, even extremely myopic financial markets, that the next policy step lies in helping U.S. businesses and families back on their feet through a well designed second economic stimulus.
