The Economy, Jobs and Justice
The state of America's union is stark. The economic collapse triggered by the bursting of the housing bubble continues to take its toll.
We know the statistics. Nearly one in five American workers is unemployed or underemployed. That means wages are losing ground. One in three homes with a mortgage is under water. Millions of Americans are headed to losing their homes.
That will leave families adrift, children displaced.
The desperate effort to keep the financial system from failing has succeeded. It has saved the big banks -- leaving them more concentrated than ever -- but not succeeded in removing the clot in financing. Small businesses can't get loans; homeowners can't get mortgages adjusted. Finance is like the blood of the economy. When there is a clot, the economy can't work and people suffer.
Republicans argue that the president's recovery plan has failed. Then they prescribe the same poison that created the breakdown in the first place. They want more top end tax cuts, more breaks for business, more deregulation. We tried tax cuts under Bush; it leads nowhere.
The reality is that the recovery plan created or saved millions of jobs. Aid to states and localities kept teachers and police from being laid off in large numbers. Spending on infrastructure helped put some to work. Investment in new energy created new jobs. Aid to the unemployed -- extending unemployment benefits, subsidizing health care COBRA payments, and providing food stamps -- put money into the pockets of those who need it most.
The problem with the president's plan -- as any honest economist will tell you -- is that it wasn't big enough. The collapse was far deeper than the president's economists predicted.
We need another big jobs program. Aid should go to states and localities that now face brutal cuts that will lay off teachers, police and professors. Public jobs programs -- a green corps, an urban corps -- should target hard-hit areas like the Midwest and urban centers. We should invest in infrastructure by repairing schools, weatherizing public buildings and creating the projects that will hire construction workers.
Without these commitments, there will be no recovery. Businesses won't expand into an economy in which one in five people are unemployed. Exports won't increase -- particularly with the Chinese continuing to manipulate their currency. Consumers have taken a
People are confused and angry. They see high deficits and think the money is going to
Here we need the president to lead and take on the naysayers and the false leaders. He must lay out what needs to be done, and rally the country to act.
The pollsters say independents are angry about deficits, so
That is the big lie because, in reality, when everyone else is cutting back, government must step in and put people to work. This will require deficits because tax revenues are down and expenditures on unemployment and food stamps are up.
The simple fact is, you can't balance the budget without generating economic growth. Any attempt to do so now will deepen the downturn. Once people go back to work, and the economy gets going, tax revenues will go up, emergency spending will decline and steps can be taken to bring the deficit down. But it is utter foolishness to do so before people are at work.
That's why the State of the Union is so important. It is vital that the president use this moment to set the direction, to rally the country, to take on the naysayers and to call this country to move forward.
We faced a huge emergency in World War II. We borrowed massive amounts, ending with a national debt some 120 times greater than our annual economic production. Then as the war ended, we passed the GI Bill and sent a generation of soldiers to college and advanced training. Eisenhower, a Republican, invested in the Interstate highway system. We generated jobs, growth, and over time the debt was paid down.
This is a national emergency also. We need to borrow what we need to put people to work and make vital investments in our future. And then, jobs and growth will help bring the debt down over time.
Creating jobs is the right thing to do in human terms. It is also the utterly essential thing to do in economic terms. We must build the new economy around a job for everyone willing to work, not condemn families to desperation while pretending the economy is healthy.
It is time to act boldly to put Americans back to work.
Predicting the Fed's Next Move
The Federal Reserve didn't pull out any surprises when it blandly announced that it will keep interest rates near zero as the economy continues to recover. But even as the Fed remains fairly tight-lipped about when it will begin ratcheting up rates, economists have been quick to speculate about what's in store. Here are some predictions
Although home prices continued to stabilize in November, real estate experts believe we have another 5 or 10 percent of declines in store before values finally hit bottom. Home prices in 20 major cities declined 5.3 percent in November 2009 from a year earlier, a significant improvement over the 13.3 annual drop posted in July
Home Sales Tank: What it Means for You
Existing home sales plunged in December, falling nearly 17 percent from November in their largest month-over-month drop since record-keeping began. December's inventory represented a 7.2-month supply of unsold homes, notably higher than the 6.5-month supply in November. Here's a look at what the December existing home sales report means for homeowners, home sellers, and home buyers
Obama - Trashing the Job Makers
Victor Davis Hanson
A year ago Obama inherited a recession brought on by the collapse of the housing bubble. The crash was made worse by recklessness on Wall Street. Job losses followed, and in response, Obama pushed through an epic stimulus bill. Yet despite the stimulus, unemployment soared from 7.6 percent to 10 percent. Now, an embarrassed administration continues to cite jobs saved, rather than jobs lost
Prosperity Isn't Coming Without Structural Rebalancing
President Barack Obama did a fine job with his first State of the Union address. His basic theses were: The middle-class is suffering. We must create more jobs. Banks have to pay more. Democrats and Republicans should get along. Nice. But to reignite a constituency for a progressive vision, Obama should be talking in broader strokes.
Financial Fat Cats
(c) Matt Davies
Rising Yachts Lift No Tides
The government argued that they had to resuscitate the banks in order to save the U.S. economy. So, they rescued the banks not to save the banks, but to save the economy. It 'worked.' Banks are back, making profits and gearing up bonuses. However, unemployment and home foreclosures are rising and personal bankruptcies are at record levels. Obviously, there is a fundamental disconnect ...
Global Economy: 7 Countries Spooking Investors
Despite federal spending consuming 27.2 percent of GDP, the United States maintains a Aaa rating. But you can't say the same about many countries in both the developed and developing world where continued fallout from the economic crisis is hurting their credit ratings. As a result, investors have viewed the economic situations in these countries as increasingly risky bets.
Foreclosure tallies continue to break records and even more homeowners appear headed for foreclosure this year. However, as the housing crisis rumbles forward, an additional driver of home foreclosures has become clear: Strategic Defaults -- borrowers able to pay their mortgage are simply walking away because they believe it's best for their finances
Wall Street CEOs: The Mea Culpa That Wasn't
Here is the testimony I would have liked to have heard from the CEOs of Wall Street's largest banks -- institutions whose irresponsibility and greed nearly brought down the economy
Let Us All Now Bail Out the States
Most states must balance their budgets by constitutional stipulation -- a concept also viewed with a federal sneer. In the depression year of 2009, the feds bailed out the states to the tune of $87 billion. In the current fiscal year, state budget shortfalls are expected to total about $180 billion, with a like amount (or more) anticipated for fiscal 2011.
Detroit - Who's Your Tiger
In the last 18 months, the auto industry has become something bigger than just the buying and selling of cars. It has become an ideological ground zero, a tug of war with many hands on the rope, labor, manufacturing, nationalism, elitism, environmentalism, jobs, the survival of a shrinking but vital American city: Detroit
Politics Behind Hugo Chavez's Currency Devaluation
A lot has been written in recent days about the economic impact of drastic devaluation of the Venezuelan currency announced by Venezuela's authoritarian-populist President Hugo Chávez. But the measure's political impact may be just as important, if not more.
The Economy, Jobs and Justice | Jesse Jackson
(c) 2010 Jesse Jackson