Archive for the ‘unemployment’ Category

Economic Abyss could deepen again

March 12, 2009

A deepening pessimism is taking root in the American economy as joblessness rises inexorably toward 9 percent, businesses are failing, U.S. exports have tanked and Wall Street is in a depression.

Obama: Playing not to lose

Billionaire investor Warren Buffet declares the economy has “fallen off a cliff,” and sees recovery further off than ever. Economists talk gloomily of a long recession followed by years of anemic growth as the once-mighty global economy shrinks for the first time since World War II.

Donald Lambro
The Washington Times

The administration’s plans to bail out failing banks, buy worthless toxic assets and “jump start” a listless economy now seem tame in the face of a dawning realization that the fierce financial infection is far more systemic than they had first imagined.

Global economic analysts here now talk of bank failures in the trillions of dollars, dwarfing the rapidly depleting $350 billion in TARP rescue funds that the Treasury has at its disposal. The Federal Deposit Insurance Corp. is raising its premiums on the nation’s banks to replenish its shrinking fund at a time when many banks are too weak to pony up more money.

President Obama‘s honeymoon, if he ever really had one, is being cut short by new criticism from Wall Street, Republicans and Democrats in Congress and, increasingly, the business community.

Read the rest:
http://www.washingtontimes.com/ne
ws/2009/mar/12/abyss-could-deepen-again/

Related:
Obama Wasting America’s Strategic World Power; China Surges Despite Economy

Obama’s three-pronged economic strategy: delay, delay and delay

China Buying Oil, Uranium, Gold, Other Products At Bargain Prices

Pelosi’s Stimulus II? Lawmakers Propose No Cost, High Employment Energy Package

China Buying Oil, Uranium, Gold, Other Products At Bargain Prices

Russia, “Desperate For Cash,” Sells Oil to China In “Very Bad Deal”
.
Even Democrats Showing Signs Of Economic Despair, Worry at White House Inertia

Pelosi: Congress Needs to ‘Keep the Door Open’ to Second Stimulus Package

Obama’s To-Do List: Fix Economy First or Do Everything Obama’s Way?

March 12, 2009

As for what policies I’d drop from the to-do list because of the crisis, at this point I’d have to say all of them. For years, I’ve been reading alarmed commentators like Martin Wolf of The Financial Times and thinking them a bit on the outer edge of pessimistic thought. Now I am not so sure. Now I think this economic crisis could be like nothing we’ve seen in our lifetimes. Big-name economists are talking seriously about another depression.

In that context, I don’t think we can do anything but fixate on this. That is, I think the president should spend 50 percent of his time on the banking crisis, 25 percent of his time on getting our allies to coordinate with a global stimulus package and 25 percent of his time beginning work on a second round of stimulus. He’s taking his eye off the ball if he spends hours every day working on health care, education and energy. Worse, he adds uncertainty into the market.

If by summer the crisis has passed, then he should go back to the long-term stuff. But the world is too uncertain just now. If the economy collapses, history will judge him very harshly for having a budget process that is on an entirely separate track from his crisis-response process.

By David Brooks:
http://theconversation.blogs.nyti
mes.com/2009/03/11/obamas-t
o-do-list/

*******************
Gail Collins:

Remember when the early Clinton administration got trapped by its own little economic crisis and James Carville grouched that if there was reincarnation, he wanted to be reborn as the bond market because then “you can intimidate everybody”?

I think I want to come back as a moderate Republican. A club so exclusive it could hold a meeting in a Capitol elevator. But these days, nothing moves unless they’re happy. Stimulus packages hang on two senators from one of the most underpopulated states in the nation {Maine].

By Gail Collins, The New York Times:
http://theconversation.blogs.nyti
mes.com/2009/03/11/obamas-to
-do-list/

Even Democrats Showing Signs Of Economic Despair, Worry at White House Inertia

March 11, 2009

The stimulus is not working, the economy is still in deep trouble and the hole seems to be growing and on Capitol Hill concern is growing that they are watching as the recession turns toward depression.

And the president hasn’t done enough and hasn’t put his administration on a readiness footing as if for a war.

It isn’t just old school Republians and Rush Limbaugh saying the president hasn’t done enough: a growing list of Democrats and media commentators are now expressing dire concern in public.

Rep. Dennis Kucinich (D-Ohio) excoriated the Treasury Department this morning for failing to adequately trace banks’ use of taxpayer bailout money they were awarded last year and called for better oversight by the Obama administration.

“If the new administration is to avoid perpetuating the approach of the past, real change is going to have to be necessary,” said Kucinich, who is chairing a domestic policy subcommittee hearing.

“This will cost the taxpayers $3 trillion before its all over,” Kucinich told Fox News on Wednesday afternoon.

Rep. Dennis Kucinich said the government needs to keep better track of how banks are using their bailout money. Photo: Sabrina Eaton/The Plain Dealer

As CNN reports today, “One New Hampshire congresswoman said … to Treasury Secretary Tim Geithner on Capitol Hill recently, ‘hurry, please hurry, because people are waiting and they are hurting, and they need the help now.'”

That was Rep. Carol Shea-Porter, D-New Hampshire, who expressed a growing despair as mirrored by voters who have lost jobs, houses, IRA wealth and stock portfolios.

We are in a tsunami and everyione is starting to look at the captain of our ship of state and ask, “Is this all we can do?”

“For the first time in years we produced an honest budget,” President Obama said today before signing the Omnibus spending bill containing some 8,500 earmarks.  The bill totals a stunning  $410 billion — maybe $8 billion in earmarks  accorning to bedget watchdogs.  The bill funds the U.S. government through the end of this fiscal year.

This follows the economic stimulus bill of some $740 billion which will soar to about $1 trillion due to interest payments on the debt.

But the economy has yet to rebound and Speaker of the House Nancy Pelosi has already said maybe we need another stimulus….

CNN:
http://edition.cnn.com/2009/POL
ITICS/03/11/nervous.dems/index.html

Related:
Leadership: It’ll Take More Than Money to Fix This Crisis
.
Obama Doesn’t Understand What Many Americans Are Thinking

 Pelosi: Congress Needs to ‘Keep the Door Open’ to Second Stimulus Package

All The President’s Men: Where’s The Congressional Oversight?

Economic Situation Demads Nation, Politics With War Mindset

Obama Policy On Gitmo, Taliban, Afghanistan, Intel: As Stupid as It Gets

Buffett: Obama not at war; has toxic message machine on economy

Voters’ Obama Folly Coming Home to Roost

US Recession Could Last Up to 36 Months: Roubini

March 9, 2009

The man who predicted the current financial crisis said the US recession could drag on for years without drastic action.

Nouriel Roubini
CNBC.com
Nouriel Roubini

Among his solutions: fix the housing market by breaking “every mortgage contract.”

“We are in the 15th month of a recession,” said Nouriel Roubini, a professor at New York University’s Stern School of Business, told CNBC in a live interview. “Growth is going to be close to zero and unemployment rate well above 10 percent into next year.”

Echoing a speech he made earlier in the day, Roubini said he sees “no hope for the recession ending in 2009 and will more than likely last into 2010.”

Read the rest:
http://www.cnbc.com/id/29598949

Recession on track to be longest in postwar period

March 8, 2009

Factory jobs disappeared. Inflation soared. Unemployment climbed to alarming levels. The hungry lined up at soup kitchens.

It wasn’t the Great Depression. It was the 1981-82 recession, widely considered America’s worst since the depression.

By DEB RIECHMANN, Associated Press Writer

That painful time during Ronald Reagan’s presidency is a grim marker of how bad things can get. Yet the current recession could slice deeper into the U.S. economy.

If it lasts into April — as it almost surely will — this one will go on record as the longest in the postwar era. The 1981-82 and 1973-75 recessions each lasted 16 months.

Unemployment hasn’t reached 1982 levels and the gross domestic product hasn’t fallen quite as far. But the hurt from this recession is spread more widely and uncertainty about the country’s economic health is worse today than it was in 1982.

Back then, if someone asked if the nation was about to experience something as bad as the Great Depression, the answer was, “Quite clearly, `No,'” said Murray Weidenbaum, chairman of the Council of Economic Advisers in the Reagan White House.

“You don’t have that certainty today,” he said. “It’s not only that the downturn is sharp and widespread, but a lot of people worry that it’s going to be a long-lasting, substantial downturn.”

For months, headlines have compared this recession with the one that began in July 1981 and ended in November 1982.

-In January, reports showed 207,000 manufacturing jobs vanished in the largest one-month drop since October 1982.

Read the rest:
http://news.yahoo.com/s/ap/20090308/
ap_on_bi_ge/the_worst_recession

Government Struggling to Keep Up With Job Losses; “Stimulus” Too Late

March 8, 2009

The nation’s rapid job losses could be piling up too quickly for the government to keep up, the Washington Post reported.

From Fox News

With the unemployment rate jumping to 8.1 percent last month, the government is facing increasing pressure to take action.

But analysts warn that actions taken so far to stabilize the economy haven’t been enough.

The stimulus package was designed to “save or create” 3.5 million jobs, but the nation has already passed that with 4.4 million jobs having been lost.

“It’s premature to say we need another stimulus, but the economy is performing much worse than when [the law] was signed, and the odds are increasing that we’ll need a bigger policy response,” Mark Zandi of Moody’s Economy.com told the Post. “What we’ve learned is policy has been a step behind this whole downturn. It’s important to get a step ahead.”

And others say the government hasn’t yet grappled with the scope of the problem.

“I think what it shows is neither the government nor many economists have a grasp yet of how bad the economy really is right now,” Bernard Baumohl, chief global economist at the Economic Outlook Group, told the Post. “We can’t get our arms around what’s going on.”

On Friday, the Labor Department reported the nation’s unemployment rate had bolted to 8.1 percent in February, the highest since late 1983, as cost-cutting employers slashed 651,000 jobs amid a deepening recession.

The net loss of 651,000 jobs came after even deeper payroll reductions in the prior two months, according to revised figures released Friday. The economy lost 681,000 jobs in December and another 655,000 in January.

The president wouldn’t say in an interview posted on The New York Times’ Web site Saturday whether the economy will be growing again by year’s end. He said that timing depends on several factors. Notable among them was his call for other countries to take actions to shore up their financial markets and coordinate those actions with the U.S.

The Associated Press contributed to this report.

Related:
Obama Doesn’t Understand What Many Americans Are Thinking

Global Economy Weakness Leading To Social Unrest

NYT Interviews Obama; No Economic Recovery This Year

 NYT: After March 6 Economic News, “2009 is Probably a Lost Cause”

Obama, Socialism, Fear, Lack of Confidence: Tanking Stocks, Skyrocketing Debt, Recovery Doomed This Year

March 7, 2009
This has the feel of a full scale assault on capitalism….

Some investors and pundits blame Obama for the market’s dismal performance. He inherited a mess, but his rhetoric isn’t helping.
.
Obama’s Radicalism Is Killing the Stock Market

NYT: After March 6 Economic News, “2009 is Probably a Lost Cause”

Tom Petruno, Market Beat
Los Angeles Times
March 7, 2009
The stock market is supposed to be a bet on the future.

The market’s verdict so far this year: There is no future.

The continuing meltdown in share prices, the worst since the Great Depression, now has become Exhibit A in the political battle between the Obama administration and its harshest critics.

Conservative pundits including Rush Limbaugh and CNBC-TV’s Larry Kudlow assert that the president is waging war against capitalism itself, with his tax-hike proposals, social programs and banker-bashing rhetoric. That has sent disillusioned investors fleeing, they contend.

Well, something has. After diving 38% last year, share prices are down 24% just since Jan. 1, as measured by the Standard & Poor’s index of 500 big-name issues.

Despite a slight uptick on Friday, stocks plummeted 7% this week alone.

An outside view of the New York Stock Exchange on Wall street. ...

The decline from the market’s peak in October 2007 now is 56.3% — the steepest drop since the plunge of 1938 to 1942, when no less than the future of democracy was at stake.

“I think everybody is afraid of Obama,” said Todd Leone, a veteran stock trader at Cowen & Co. in New York. “They’re afraid he’s a socialist.”

Yes, the S-word.

Others say the market is more upset with the administration’s failure to stabilize the ravaged banking system — a Herculean task that Wall Street had hoped would be the first major challenge the White House tackled.

“Every time Obama talks about something like healthcare, the market’s reaction is — ‘No, the banking crisis!’ ” said Jeffrey Schappe, investment chief at BB&T Asset Management in Raleigh, N.C.

Treasury Secretary Timothy F. Geithner still hasn’t provided specifics on his plan to get rotting loans off the balance sheets of major banks, a step seen as crucial to jump-starting new lending.

For his part, the president this week advised investors to look beyond what he called “day-to-day gyrations” in share prices.

He then ventured into territory where few other presidents have gone. Perhaps taking a cue from fellow Democrat Warren E. Buffett, Obama offered an opinion on whether stocks were bargains.

“What you’re now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal, if you’ve got a long-term perspective on it,” he said Tuesday.

He didn’t get the lingo right, assuming he meant to say “price-to-earnings ratios,” a measure of stock prices relative to earnings per share. That flub caused snickering among market pros.

Read the rest:
http://www.latimes.com/business/la-
fi-petruno7-2009mar07,0,869176.column

Related:
 Can Democracy Fail With Obama’s Socialist Help?

George W. Obama?

Related:
 Venezuela’s Chavez Urges Obama, U.S. Down Socialist Path

Obama’s Radicalism Is Killing the Stock Market

NYT: After March 6 Economic News, “2009 is Probably a Lost Cause”

Obama’s First Weeks: Economic Disaster, Socialist Agenda,

Just Do It, Barack

March 7, 2009

At least President Obama knows the economy has problems. He’s spoken of a “financial crisis,” a “housing crisis,” a “credit crisis” – you name it.

So he earns points for recognizing the ills that plague us. Too bad he isn’t doing much about them.

Editorial
NY post

Sure, the administration’s housing program promises to keep more Americans in their homes – but it cannibalizes the troubled financial industry to do so.

It’s clear that TARP won’t solve the toxic-assets problem. Maybe Team Obama just prefers to let the financial sector remain one big Superfund site?

No strategy has emerged to bring financial regulations into the 21st century.

And the plan for recidivist beggars like AIG and General Motors is to throw more of your tax money at them.

All this as reports surface that Treasury Secretary Tim Geithner has yet to hire a single deputy – leaving Treasury virtually paralyzed during a major recession.

But instead of cleaning up the mess, Obama has wholly invested himself in a massive scheme to remake the Republic. In the name of “economic recovery,” he’s laboring to nationalize health care and education, and plowing megabillions into the flimsy promise of “green” energy.

Now, if the evaporation of trillions of dollars of wealth had been caused by a shortage of solar panels, or lack of a universal-health-care card, he might be right to do so.

So let’s be clear: His priorities are seriously misplaced – an observation that’s starting to get some traction.

Clearly that was the verdict yesterday from columnists Paul Krugman, Steve Forbes and Charles Krauthammer. When those three agree, it’s time to pay heed.

And pay attention Obama should.

One wake-up call came yesterday, as the government announced that more than 650,000 jobs disappeared in February – the first full month of the age of Obama.

And the Dow has made like an Acapulco cliff diver since Inauguration Day, plummeting more than 1,650 points – nearly 650 of them since the president unveiled the budget he says will solve everything.

This week, a share of Citigroup – worth $55 just 22 months ago – was a better fit for the McDonald’s Dollar Menu than the New York Stock Exchange.

The fact that no one’s buying up these deals means investors are weighing rock-bottom stock prices against the next few years’ economic prospects – and still aren’t convinced they can turn a profit.

Not exactly a stunning endorsement of Obama’s long-term plans for recovery.

Obama is famous for his discipline – and it’s time for him to show some.

Sure, the opportunity to turn America into Europe is appealing enough to put dollar signs in the eyes of any Democrat. But the president needs to ignore the distractions, and start making the fixes America’s economy really needs.

After all, Obama was one of the few Americans to get a new job in recent months. Those who hired him expect him to buckle down and do it.

Related:
Can Democracy Fail With Obama’s Socialist Help?

Households, Businesses Have Stopped Spending; Now It’s Congressional Responsibility Time

March 6, 2009

Here is the top economic news today:

–Unemployment reached a level not seen since 1983.

–The stock market hasn’t been this low since 1997.

–The Senate refused the president’s $410 billion omnibus spending bill last night, necessitating a continuing resolution at last year’s spending levels, at least until the omnibus can be reconsidered next week.

–The Republican Leader in the House, John Boehner, has called for a government spending freeze.

–The head of the Federal Deposit Insurance Corporation (FDIC) has warned that the fund insuring Americans’ bank deposits could be wiped out this year without the money the agency is seeking in new fees from U.S. banks and thrifts.

–The Treasury Secretary’s pick as his number one deputy withdrew her name from consideration last night.  The top 17 senior posts at Treasury are vacant with no names announced to fill those posts.  A Senate hearing was cancelled yesterday because Treasury could not cough up a reporesentative for the hearing.  And as for Mr. Geithner himself, Warren E. Buffett has said: “Beware of geeks bearing formulas.”

–A Record 31.8 million Americans now get food stamps.

http://money.cnn.com/2009/03/05/ne
ws/economy/foodstamps.reut/index.ht
m?section=money_latest

Worried now?  I am.  especially since President Barack Obama wants to spend untold trillions still: on health care, bank bailouts, foreclosure and mortagage subsidies, a conversion of the nation’s energy system from oil, gas and coal to wind and magic, and still more.

The president already has said mean things about the engine drivers of the American economy, and made it clear he intends to raise their taxes and cut their perks and pay.  Consequently they have decided to invest less and hire fewer worker.  You would have done the same.

All homeowners will lose some of their mortgage interest tax deduction under the Obama plan: a strange idea during a housing crisis.

And we can all expect to pay more for everything when this huge debt we are developing turns into the likely ugly dragon of inflation.  Add to that oil and gas prices which will likely rise with OPECs help and the president’s “cap and trade” idea for energy and carbon limits and PRESTO: we could have a real economic meltdown.

I’m with Republicans in the House and Senate: this is a good time to kill the 9,000 earmarks contained in the omnimbus and settle for a continuing resolution to finish out this year.

Related:

WASHINGTON (AP) — The top Republican in the House is seizing on the latest spike in unemployment to call for a freeze on government spending and to urge President Barack Obama to veto a $410 billion spending bill.

Rep. John Boehner, R-Ohio, said the jump in unemployment to 8.1 percent and the loss of 651,000 jobs in February is a sign of a worsening recession that demands better solutions from both parties.

Boehner criticized the spending bill as chocked full of wasteful, pork-barrel projects. The Senate postponed a vote on the bill until Monday amid the criticism.

Boehner said he hoped Obama would veto the bill. He urged the president to work with House Republicans to impose a spending freeze until the end of this fiscal year.

More Related:
http://michellemalkin.com/2009/03/06/hou
se-republicans-push-for-spending-freeze/

******
WASHINGTON – The head of the Federal Deposit Insurance Corp. has warned that the fund insuring Americans’ bank deposits could be wiped out this year without the money the agency is seeking in new fees from U.S. banks and thrifts.

FDIC Chairman Sheila Bair acknowledged, in a letter to bank CEOs, that the new increased fees and hefty emergency premium the agency voted to levy last week will bring a “significant expense” to banks, especially amid a recession and financial crisis when their earnings are under pressure.

“We also recognize that assessments reduce the funds that banks can lend in their communities to help revitalize the economy,” Bair wrote.

But given the accelerating bank failures that have been depleting the deposit insurance fund, she said, it “could become insolvent this year.”

Read the rest:
http://news.yahoo.com/s/ap/200903
04/ap_on_bi_ge/fdic_bank_fund_w
arning

*****

Senate Banking Committee Chairman Christopher Dodd is moving to allow the Federal Deposit Insurance Corp. to temporarily borrow as much as $500 billion from the Treasury Department.

The Connecticut Democrat’s effort — which comes in response to urging from FDIC Chairman Sheila Bair, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Timothy Geithner — would give the FDIC access to more money to rebuild its fund that insures consumers’ deposits, which have been hard hit by a string of bank failures.

Read the rest from The Wall Street Journal:
http://online.wsj.com/article/SB1236
30125365247061.html

Related:
Unemployment Highest Since 1983; Business Leaders Have No Confidence in Obama Economic Plan, Team

American Workers, Businesses Cut Back; Obama Launches Spending Spree
.
Presidency of Fear

Obama’s Brazen Deception: Why The Stock Market Won’t Recover Soon

 Senate Halts Obama Spending; At Least For The Week End

 Obama plan to prevent foreclosures won’t help many California homeowners

“People that create American wealth are going on strike”

Obama’s Economic Strategy Akin To LBJ’s Vietnam Fiasco: “Pour In More”

Unemployment Highest Since 1983; Business Leaders Have No Confidence in Obama Economic Plan, Team

March 6, 2009

If we were in Britain or Canada, Barack Obama would be due for a “no confidence” vote.

No confidence is exactly what American business professiionals are telling us; no confidence in Barack Obama, Timothy “Tax Dodge” Geithner, The Deputy Treasury Secretary that withdrew her name from consideration just yesterday, Geithner’s top 17 Treasury Department executives which have uet to be even named, and all the rest of the president’s economic advisors.

Here’s what most college students learn inEconomics 101:

–The Stock Market is the barometer of confidence in the economy of the United States.  A lower stock market usually means a loss of investor confidence in the way the economy is going and in the predicted future course of the economy.

–Lay off, job loss, cuts in workers hours and benefits LEAD the economy.  Lay offs and job losses predict grimmer economic times so business owners don’t hire workers — they get rid of them before the economic and business environment worsens to an untenable and unsustainable level.

******

By JEANNINE AVERSA, AP Economics Writer

The nation’s unemployment rate bolted to 8.1 percent in February, the highest since late 1983, as cost-cutting employers slashed 651,000 jobs amid a deepening recession.

Both figures were worse than analysts expected and the Labor Department’s report shows America’s workers being clobbered by a wave of layoffs unlikely to ease in the coming months.

“There is no light at the end of the tunnel with these numbers,” said Nigel Gault, economist at IHS Global Insight. “Job losses were everywhere and there’s no hope for a turnaround any time soon.”

February’s net job loss came after even deeper payroll reductions in the prior two months, according to revised figures released Friday. The economy lost 681,000 jobs in December and another 655,000 in January.

Read the rest:
http://news.yahoo.com/s/ap/20090
306/ap_on_bi_go_ec_fi/economy

Related:
American Workers, Businesses Cut Back; Obama Launches Spending Spree

Related:
Presidency of Fear

Obama’s Brazen Deception: Why The Stock Market Won’t Recover Soon

 Senate Halts Obama Spending; At Least For The Week End

 Obama plan to prevent foreclosures won’t help many California homeowners

“People that create American wealth are going on strike”

Keynesian Economics Is An Unproven Theory

I heard almost no criticism of the $819-billion stimulus package making its way through Congress. The general assumption seemed to be that practically any kind of government expenditure would be beneficial — and the bigger the resulting deficit the better.

There is something desperate about the way economists are clinging to their dogeared copies of Keynes’ “General Theory.” Uneasily aware that their discipline almost entirely failed to anticipate the current crisis, they seem to be regressing to macroeconomic childhood, clutching the Keynesian “multiplier effect” — which holds that a dollar spent by the government begets more than a dollar’s worth of additional economic output — like an old teddy bear.

They need to grow up and face the harsh reality: The Western world is suffering a crisis of excessive indebtedness. Governments, corporations and households are groaning under unprecedented debt burdens. Average household debt has reached 141% of disposable income in the United States and 177% in Britain. Worst of all are the banks. Some of the best-known names in American and European finance have liabilities 40, 60 or even 100 times the amount of their capital.

The delusion that a crisis of excess debt can be solved by creating more debt is at the heart of the Great Repression. Yet that is precisely what most governments propose to do.

Read the rest:
Stimulus Dilusion: More Debt Spending Will Never Resolve Debt Crisis

Also see:
Audacity, Hope and Obama’s Spending Stimulus: Once Discredited Theory Gets A Real Try