The "nothing can be done" notion is just the modern version of "let them eat cake."

We not only worship money, we insulate from responsibility those who manipulate it for the greatest ill.

And of course, us icky Liberals and Leftists have to take the most blame because we are so full of unreality that we expect the Party after two wave elections to, you know, actually garner some real results and to help push our society back to the middle/left.  I'm such an awful whiner, that I believe people should not be forced out of their homes and that we should protect the safety net instead of appointing commissions full of people looking to eviscerate it.  Perhaps the Catfood Commission is just a show, but if it is it's a stupid one.  It angers the base and does little to mollify independents, who Obama has already lost with the aforementioned giveaway to the Health Insurance Corporations.  

Obama and the Dems are in deep poo, and this whistling "Happy Days Are Here Again" past the graveyard is getting a little grating.  We're supposed to be the the reality-based community, not a bunch of drunk Freshmen at a college game.  (I can't wait for College football either BTD.)

1. They read the polls to see what the public thinks the biggest issues are. in 2009 those were health care and the economy.
   
2. They decide they need to 'do something' about those things. Note that they have no personal interest or commitment, just the knowledge that voters want them to 'do something'
   
3. They gather the lobbiests and the vote counters to figure out what they can pass that will satisfy the lobbiests.
   
4. Now the rhetoric starts. To supply the rhetoric, they may engage real experts that write the speeches that say things like ' the current health care system is unsustainable' and 'the economy is close to a depression'. This rhetoric is true, and most of the people know it is true, because they see it all around them. But the politician himself does not really believe it. He just sees it as part of the sales job.
   
5. 'Something' gets passed. Its inadequacies are either invisible or excusable to the politician. After all, he did all the lobbiests and vote counters said he could do.

The issue is that over the last 30-40 years we have seen "new and innovative" financial products (read "E-Z credit") substituted for wages (which have essentially stagnated or declined for the masses.) The substitution of credit was a "solution" to the need to prop up consumption and maintain growth.

What we need to do is address the vast and growing income inequality which has seen the slice of the pie going to the top 1 percent (or more accurately, the top 0.1 percent) to the point that we are now back to the levels of inequality which preceded the Great Depression. It's the New Gilded Age.

You can't have broad based prosperity and a solid middle class in an economy where the system is rigged to concentrate the wealth in the hands of the few. The E-Z credit "solution" is self-limiting and lasts only so long as people can shoulder more debt burden. At the point that the burden becomes too much to bear, the "solution" collapses like the house of cards that it is.

Dean Baker's recent article in the HuffPo (When Wall Street Rules, We Get Wall Street Rules) is aimed in the generally right direction.

We've had top down class warfare in the United States for more than three decades now. That warfare has been aided and abetted by both major political parties and their worship of "free markets" that are actually rigged, not free. And the changes to the tax code that see regular income taxed at higher rates than cap gains, that allow hedge fund managers to pay cap gains rates on the carry have been part of the problem.

Bringing a sound economy back is going to require that we re-institute some New Deal style policies.

They could have, if it had occurred to them, paid off every single mortgage in the United States, subprime or not,  for about 12 trillion dollars, which would have saved wall street from their self created mess, by restoring the value behind those securities.

Obama chose to not just ask for too little money in his stimulus, but spent the money very badly even outside of the hugely useless tax cuts.  The money did not give the economy an obvious medium term direction: either a huge telecom build-out or an energy and conservation build-out, and the huge bailouts for financial firms created a more concentrated financial sector full of zombie banks with no intention to lend money.  The failure to create a workable cram down on housing prices which also rescued underwater home owners has left housing prices underwater and credit markets still sclerotic.  With the House either going Republican in the fall, or if it remains Democratic with the Democratic margin being controlled by hard-core Blue Dogs, even if Obama did buy a clue, there is little chance that a decent restructuring stimulus bill could get through Congress and the actions of regulatory bodies like the FCC, the Justice department, as well as Obama's implicit recognition of the health oligopoly, make it clear that his administration has no intention of challenging, let alone dismantling, the oligopolies which are draining the life blood of the US polity.

Plus ca change...

Recovery by government action is not only possible but the only way that real recovery can be achieved.

With this group.  Don't hold your breath.  The only change Obama ever intended to bring about was insuring that the Democratic Party was changed completely into a right of center party.  The transformative change was narrowing our choice to right and farther right.

paul krugman (who actually has been awarded a nobel prize in economics) seems to differ with mr. coles, regarding the government's ability to directly affect the economy. it's that old "Keynsian Economics" thing, from the first great depression.

dr. krugman provided a road map to recovery, which the obama administration has consistently ignored, because it might upset republicans, who wouldn't vote for it anyway. instead, they've chosen to try and placate the "deficit hawk" crowd, concerned about stuff that might happen, in some unknowable future time.