The Obama administration, buoyed by a resurgent Wall Street, plans to cut the projected long-term cost of the Troubled Asset Relief Program by more than $200 billion, in a move that could smooth the way for the introduction of a new jobs program.
The White House and leaders in Congress are debating whether to use any of the remaining TARP funds for other domestic efforts, such as a jobs bill. Congress authorized $700 billion for the program during the height of the financial crisis.
The Treasury now estimates that over the next 10 years TARP will cost $141 billion at most, down from the $341 billion the White House projected in August. The reduction stems in large part from faster-than-expected repayments by some of the nation's largest banks, as well as less spending on programs to help shore up the financial sector.
The government's efforts appear to have helped stabilize the financial sector, and banks have already repaid the Treasury about $70 billion. Bank of America Corp. has said it will return its $45 billion investment as early as this week, and the government now expects total repayments to reach as much as $175 billion by the end of next year. Altogether, it invested $204 billion in 690 firms. The Treasury has also collected more than $10 billion in interest and dividend payments from firms in which it has invested.
The lower-than-expected TARP losses could help the White House tap remaining funds for a jobs program because the revised estimates will help bring down the projected federal budget deficit since the White House will be able to assume less spending associated with the program.
The White House has been under pressure to tame the $1.4 trillion budget deficit, which has ballooned as the U.S. borrows vast sums of money. But with unemployment at 10%, the administration is also under pressure to find ways to create new jobs. Lowering deficit projections could help alleviate concerns that a new jobs bill would further inflate the deficit.
President Barack Obama is expected to raise the idea of using repaid TARP funds for a jobs bill in a speech he plans to give on Tuesday. On Friday, White House press secretary Robert Gibbs acknowledged that repaid bailout money is "certainly being looked at" for a jobs bill.
Many Republicans are opposed to recycling TARP funds for a jobs bill, calling instead for the money to go toward reducing the deficit. House Minority Leader John A. Boehner (R., Ohio), on Bloomberg television Friday, called it "the worst idea" he had ever heard.
To hear the talk at the White House jobs summit, President Barack Obama has dozens of job-creating ideas to pick from when he sketches out his plan in a speech Tuesday.
Hardly.
By the summit’s end, Obama spoke encouragingly of only about a half-dozen ideas — a sign that the president’s chances of reversing double-digit unemployment actually rest on a surprisingly narrow set of options that can squeeze through the political process in Washington.
But some of them better work, Obama knows, or anxiety about the economy could seriously damage the Democrats’ chances in midterm elections next fall, in the way it’s already damaging the public’s view of Obama himself.
Obama on Thursday offered no details but talked of tax credits for job growth, a “Cash for Caulkers” home- weatherization program and looser credit for small businesses.
Another – bringing back low-paying call-center jobs often shipped off to India – might boost the job numbers, but are hardly the kind of family-supporting jobs economists say the country needs. And a fifth highlighted by Obama was better job-training, a long-term prospect at best.
Most of the other ideas bandied about Thursday were too expensive to consider, politically impossible to implement, or conflicted with other ideas offered equally passionately by other voices at the summit.
So already Obama is back to Plan A – spending taxpayer dollars to create jobs and help the jobless.
Congress plans to add $100 billion this year to extend unemployment benefits. And the Obama administration has settled on using unspent bank bailout funds to pay for a new jobs measure — about $70 billion to expand small-business lending, pay for more infrastructure projects and provide aid to state and local governments.
Sounds familiar? It’s a mini-version of Obama’s initial $787 billion stimulus package.
In fact, one idea under consideration is new spending on highways and bridges - shades of the “shovel ready” projects that the president touted in early 2009 but that he conceded Friday hadn't always lived up to their hype.
Treasury Secretary Timothy Geithner endorsed the concept of steering TARP funds toward job creation in an interview on CNBC Friday: “We’re going to be able to use substantial resources, very, very substantial resources to meet not just the immediate challenges facing the country in terms of creating job growth, sparking private investment, but to meet our long-term fiscal challenges.”
Obama got a little break Friday, with news the national unemployment rate fell to 10 percent even, down slightly from its October peak of 10.2 percent, but that’s still a 26-year high, and plenty large enough to pose a political problem for an administration that’s starting to focus on 2010 and even Obama’s re-election prospects in 2012.
The White House hasn’t said what Obama will announce Tuesday at the Brookings Institution – a speech that comes as part of a stepped-up Obama effort to show the public he understands people are hurting, at a time when White House attention has been diverted to Afghanistan and health reform and his poll ratings on handling the economy have suffered.
So Obama said Thursday he wanted immediate bang for the buck – cash to pay for instant job-creation – which is why “Cash for Caulkers” program seems a safe bet for inclusion in his speech.
The plan would provide incentives to homeowners to retrofit their homes for peak energy efficiency, meaning hiring all those workers to make the fixes. The concept is modeled on the wildly popular “Cash for Clunkers” automobile program this summer that was credited with spurring a short term boost in auto sales and boosting GDP growth in the third quarter.
He also said he’d be interested in exploring new tax incentives for job growth, citing Bill McComb, CEO of Liz Claiborne, who said that such government carrots can stimulate corporate hiring. But other experts have expressed concern that tax credits for hiring can be easily gamed by unscrupulous companies who reshuffle workers to generate apparent new hires and then claim a tax credit.
Others argue that tax incentives are the most effective way to create jobs. “These are things that can be done rather quickly and that target the real problem,” said Joseph Brusuelas of Moody’s economy.com.
The president also talked up additional small business credit measures. One way to do that, of course, is to steer unspent TARP funds to the nation’s community banks that are most likely to lend to small area businesses trying to expand. Small business credit is crucial to jumpstarting hiring, said Brusuelas. “These are ideas that need to be pursued,” he said. “Emerging markets are booming, and the dollar is low, and that should be good for small businesses that can export.”
Obama also cited the success a company called Arise Virtual Solutions has had in bringing call-center jobs – typically among the first to be outsourced to cheap-labor countries – back to the United States in what he called “reverse job migration.”
And finally, he endorsed a proposal by American Federation of Teachers President Randi Weingarten to use schools as bases for after-hours and weekend job retraining programs for parents. Weingarten said that about $1.9 million per year per school district could be enough to start such programs, which would include the training programs themselves as well as child care and onsite nursing and social work facilities. “That way, parents don’t have to worry about where their children are while they’re in getting job training,” she said.
But perhaps more even than generating specific new ideas for Obama to consider, Thursday’s job summit amounted to a vivid display of widely divergent opinions for improving job growth – between Democrats and Republicans, business and labor, big companies and small.
Disney CEO Robert Iger, for example, used one of the break-out sessions to propose a cut in the corporate tax rate – a move that would cost the Treasury billions in uncollected funds at a time when the deficit is already $1.4 trillion.
“I think that’s where I would start,” Iger said. “It’s definitely an issue not just for the Disney company but for the whole television industry.”
Other ideas would be extremely difficult to get through a politically gun-shy Congress in an election year. Larry Lindsey, a former top economist to President George W. Bush, proposed expanding the number of visas for high-skilled immigrant workers. “Intellectual capital is extremely mobile on this planet and we are erecting barriers to it. It is very hard to bring talented people into this country,” Lindsey said.
Although it has corporate support, opening the borders to more new immigrants to take jobs in this country would be a tricky sell in recession-wracked America. In one of the White House jobs summit sessions, William Hite of the plumbers and pipefitters union said his members have lost jobs to foreign construction workers.
“We have a problem with foreign workers coming over doing construction work on visas. We have members who would be there in a heartbeat to do the jobs… You’re bringing in foreign workers to take their spots and that’s not right,” Hite said.
And jobs summit participants were similarly split on foreign trade. Boeing CEO James McNerney argued that the White House should push for conclusion of the stalemated Doha round of world trade talks, saying,
“Settling for a half loaf is better than holding out for something that may never happen.”
But Teamsters chief James Hoffa offered the White House much more skeptical input on trade agreements: “We’ve had a bad trade policy going back to Clinton, going back to Bush, basically opening up our markets to closed markets,” Hoffa said. “If this government wants to do something, enforce the trade laws that you have.”
President Barack Obama says a jobs forum he hosted at the White House generated many useful ideas for jump-starting job creation, some of which can be put into action "immediately" by his administration.
The president said Thursday at the close of the jobs summit that other ideas will become part of legislation for Congress to consider. He said he was most struck by the overlap between the sessions on specific topics, leading him to conclude that job creation needs to be better coordinated.
Earlier, opening the meeting of leading business and union leaders and academics on Thursday to help him come up with innovative ideas for putting millions of Americans back to work, saying he wants the "biggest bang for the buck."
"We cannot hang back and hope for the best," Obama told a White House forum on jobs. "What I'm interested in is taking action right now."
Obama said the leading question of the day is "how do we get businesses to start hiring again" and asked his audience of about 130 guests to "bring their A-game."
But, mindful of growing anxiety about federal deficits, Obama also tempered his upbeat talk with an acknowledgment that government resources could only go so far and that it is primarily up to the private sector to create large numbers of new jobs.
He said while he's "open to every demonstrably good idea ... we also though have to face the fact that our resources are limited."
With unemployment levels above 10 percent, Obama said "We cannot hang back and hope for the best."
After opening remarks, the guests broke into different working groups to brainstorm with administration officials.
Dropping in on a session named "Innovative Agenda and Green Jobs of the Future," Obama said, "Not to tip our hand too much, but one of the things I would be surprised if we don't end up moving forward on is an aggressive agenda for energy efficiency and weatherization. Because that is an area where we can get it up and running relatively quickly. You don't need new technologies."
Sitting at the head of a large table, Obama told the smaller group that clean energy was the nation's best candidate "if we are to shift from the bubble and bust model that we have. ... We want to make a push in this area."
At one point, Obama lobbied business leaders in the group to speak out during the upcoming Senate energy debate. He urged them to help make the case that the energy bill "is not a job killer but a job grower." He said members of two prominent business groups — the U.S. Chamber of Commerce and the Business Round-table — who support clean energy need to speak out. "We're going to need you there," he said.
The forum was kicked off by Labor Secretary Hilda Solis, who called the present unemployment rate of 10.2 percent "a stark reminder of how much we have to do." She said the administration "will not rest" until it had been successful at job creation.
White House officials then showed a video about small businesses in hard-hit Allentown, Pa., where Obama was to speak on Friday in an effort to reinforce his message.
Vice President Joe Biden also addressed an audience that included the CEOs of Google, Xerox, Boeing and General Electric, labor leaders and prominent economists. "Your presence is welcome, but quite frankly it's not as important as your input," Biden said. "Without you, it will not become a reality," he said.
"Our task together is obviously not an easy one," Biden said. And while the $787 billion stimulus package had helped kick-start the process, "the government's capacity is still somewhat limited."
Obama spoke a day ahead of the government's release of unemployment figures for November.
The October jobless rate was 10.2 percent. A broader index that includes those who have given up looking for work and those forced to accept part-time jobs puts the rate at 17.5 percent. Economic forecasters expect the November figures to be at about the same levels, perhaps higher.
Republicans staged their own counterforum across town, inviting a team of mostly conservative economists to a round-table discussion on jobs.
"I think we have to move aggressively toward policies that actually promote jobs. And so far what's been tried hasn't worked very well," said Lawrence Lindsey, a top economic adviser early in the first term of President George W. Bush.
Douglas Holtz-Eakin, a former head of the Congressional Budget Office and a top economic adviser to 2008 GOP Republican nominee Sen. John McCain, suggested the single best thing Obama could do to create jobs was "to reverse course on a dangerous agenda of debt-financed spending, crippling regulation, expensive mandates and intrusive government expansion."
Earlier, House Speaker Nancy Pelosi, D-Calif., suggested that one way to create jobs is to use leftover money from the Wall Street bailout to pay for new spending on roads and bridges and save the jobs of firefighters, teachers and other public employees.
Perhaps unwittingly, Biden took the event a bit off-message at the start, painting a more dire picture of the nation's economy than typically heard out of the administration.
He recalled an old Ronald Reagan line that people see the problem as merely a downturn when a stranger is out of work and a recession if it's a relative who is unemployed — but a full-blown depression when they themselves lose a job.
"And it is a depression" for the nation's more than 10 million unemployed, Biden added.
While some of the nation's top business leaders and economists gathered at the White House, House Republicans launched a countersummit, accusing Democrats of backing “job killing” policies.
"President Obama, Speaker Pelosi and Leader Reid have never run a business,” Minority Leader John Boehner (R-Ohio) said. “They've never even had real jobs in the private sector. Before coming to Congress, I ran a small business. I know what it takes, what it means to create jobs."
Boehner also criticized the Obama administration for not inviting the Chamber of Commerce to the summit, citing it as further evidence that the Democrats are aligning themselves against employers.
"It's the nation's largest organization representing employers, and the fact that they're not at the White House gives you some indication that they're considering policies that are not going to help employers be more confident about the future of the economy and therefore put employers in the position where they're not going to hire more people," Boehner said.
The Chamber's absence, though, is not out of line with the administration's established approach — which, since June, has been to speak directly with top CEOs instead.
Kevin Hassett, the director of Economic Policy Studies at the American Enterprise Institute, spoke to Republicans Thursday and questioned the effectiveness of the calculated cost per job created in the stimulus, saying that had the government just paid people the average American wage it could have created 21 million jobs.
"The president is having a jobs summit today because the first stimulus didn't work. The stimulus package didn't work because it was so incompetently designed," Hassett said. "I can guarantee you that [a sound] policy is not going to be created by the team that gave you the previous stimulus bill — the team that's meeting at the White House today."
On the subject of the Troubled Asset Relief Program and the money that is slowly being returned to the Treasury, Boehner was wary of how those funds might be used.
"Now that that money is being paid back, it should be used to lower the federal budget deficit and the national debt," Boehner said. "This idea that we're going to take this money that's being paid back to the government and then turn around and spend it on useless government programs is a big mistake."
Hatch: "Stupid" job expectations from Dems. Sen. Orrin Hatch tells msnbc that proposed health care legislation will hurt small businesses, so for the Obama administration to expect the government to create new jobs is "stupid."
Will jobs summit produce a plan? NBC News' Chuck Todd explains the challenges with the White House's Jobs Summit, and shares details on the preparations for the president's address on Afghanistan.
African Americans and employment. While the recession has taken jobs from all races, the unemployment rate among blacks continues to exceed that of other races. African Americans from Oakland and Berkeley, Calif., talk about jobs and race.
When President Barack Obama sits down with business leaders Thursday to talk about the ailing job market, the question he’ll ask is simple: How much more can — or should — the government do to get companies to start hiring again?
The answer is turning out to be anything but simple.
The recent slowdown in job losses is welcome but only marks the beginning of the difficult process of rehiring the more than 8 million workers sidelined by the recession. A wobbly economic recovery appears to be under way, but it now seems clear that the unemployment rate is going to remain stubbornly high for years to come.
"That is not going to go down well, politically speaking,” said John Lonski, chief economist at Moody's Investors Service. “Still, you have to ask yourself whether or not there's room for much more in terms of fiscal stimulus.”
The $787 billion stimulus package passed this year is still working its way through the economy, but Congress may be asked to consider additional measures — perhaps a tax credit for new jobs or other hiring incentives, which could be costly.
The good news in the jobs data is that the pace of layoffs appears to be slowing. The monthly employment report due Friday is expected to show that the economy lost 130,000 jobs in November, which would be the best showing since January 2008. Over the first half of the year the economy was shedding jobs at a pace of nearly 600,000 a month.
New claims for unemployment benefits also have fallen, signaling that the worst of the job losses is over, and the economy could begin adding jobs on a net basis soon.
That’s about as far as the good news goes. The overall “official” unemployment rate stands at 10.2 percent, the highest level since the early 1980s. When so-called “discouraged” and underemployed workers are included, the jobless rate is pushing 18 percent. When the latest employment data is released on Friday, economists expect the report to show a loss of another 130,000 jobs in December.
On Wednesday, the Congressional Budget Office reported that the Obama administration's stimulus package created between 600,000 and 1.6 million jobs in the third quarter and added between 1.2 percent to 3.2 percent to the Gross Domestic Product, which rose 2.8 percent in the quarter.
More troublesome is the scope of job losses compared to previous recessions. With unemployment still rising, payroll levels have shrunk nearly 6 percent since the recession began in December 2007. That is nearly three times the level of job loss during the last recession in 2001.
After the 2001 recession it took 18 months to restore employment to pre-recession levels. At that rate, even if the economy began adding jobs next month, employment levels wouldn't return to pre-recession levels until June 2014.
There is no shortage of ideas about how to get Americans back to work job more quickly. The first is to try to stimulate demand and convince employers they need more workers to expand production to meet that demand.
That’s one of the objectives behind a proposal to extend unemployment benefits further into next year.
“This is the most effective way to get money into the economy. It’s given to people who are simply out of money,” said Rep. Jim McDermott, D-Wash., a key supporter. “They’re spending it. They’re not socking it away in a mattress somewhere.”
Though Congress extended benefits in November, the law failed to lift a previously approved expiration date of Dec. 31. As a result, an estimated 1 million people will lose benefits by the end of next month; by March, some three million will receive their last weekly check averaging about $315 a week. (Subsidies to help pay for health insurance are also set to expire for millions of jobless workers.)
Letting those benefits expire could hurt the fragile recovery by dampening consumer demand. But opponents of another extension are balking at the cost, which could load another $100 billion onto an already swollen federal budget deficit and add to the $12 trillion national debt.
“Calling more government spending and more debt a 'jobs package’ is laughable, and the Democrats’ frantic push for more of the same is yet another acknowledgment that their trillion-dollar stimulus isn’t working,” said Minority Leader Rep. John Boehner, R-Ohio.
The high-profile White House meeting Thursday with business leaders and economists, coming a day in advance of November's employment report, has taken on an element of political theater. Boehner announced this week that Republicans would be holding their own jobs summit "to provide a platform for economic perspectives that won't be heard at the White House event."
It remains to be seem how much will come of the dueling job events. Washington's gridlock over health care reform, carbon emissions caps and new financial regulations, among other issues, seems likely to limit any actions to fairly modest proposals.
There seems to be fairly broad support, for example, for measures to provide easier access to credit for small businesses, which traditionally have been the biggest job creators. One idea is to expand lending by the Small Business Administration. Such measures would be relatively cheap, but their impact would be correspondingly limited.
That leaves the question of whether government should undertake a broader jobs program —one that could include a combination of additional stimulus spending and tax cuts. Opponents of more spending argue that government does a poor job of creating jobs.
“Business creates jobs; the public sector, government, does not create jobs," said Heritage Foundation economist Alison Fraser. "When it does, it's horrible at them and very inefficient.”
A better solution, argue opponents of more spending, would be tax cuts aimed at getting businesses in a hiring mood.
“I expect there will be a lot of popularity on Capitol Hill, maybe on both sides of the aisle, for a new jobs tax credit,” said former Labor Secretary Robert Reich.
Beyond tax credits for new jobs, other hiring incentives under consideration are a 'holiday' on payroll taxes — which would help both workers and employers — and expanded credits for business investment.
Those measures also likely would add to the deficit. And they are no more targeted than programs that involve direct spending, said Joel Naroff of Naroff Economic Advisors.
“Every time you create an incentive, every business gets it whether or not they were going to be creating new jobs,” he said. “It becomes extraordinarily expensive to do that.”
But doing nothing could carry a bigger price tag.
“You don’t want to go back into recession,” said Mark Zandi, chief economist at Moody’s Economy.com. “If you do, it’s going to cost taxpayers a lot more. Because if we go back in recession we’re not coming out in any graceful way. It’s going to be very painful. So it makes some sense to run a larger deficit in the near term to insure that you don’t go back into a recession.”
(UPDATES: 12:22 p.m. A brief news video has been added below, showing the greeting in this photograph. Contrary to some claims, the video shows no reciprocal bow by the emperor, who traditionally bows to no one. And we've added a file photo from 2007 of Vice President Dick Cheney greeting the Japanese Emperor at the same residence in a different fashion.)
How low will the new American president go for the world's royalty?
This photo will get Democrat President Obama a lot of approving nods in Japan this weekend, especially among the older generation of Japanese who still pay attention to the royal family living in its downtown castle. Very low bows like this are a sign of great respect and deference to a superior.
To some in the United States, however, an upright handshake might have looked better.
Remember Michelle Obama casually patting Britain's Queen Elizabeth on the back during their Buckingham Palace visit? America's royalty tends to make movies and get bad reviews and lots of money as a sign of respect.
Obama could receive some frowns back home as he did for his not-quite-this-low-or-maybe-about-the-same-bow to the Saudi king not so long ago.
How times change under Democratic presidents.
Back in 1994 when President Bill Clinton appeared to maybe perhaps almost start to bow to Akihito at a White House encounter, U.S. officials rushed to deny it was any such a thing. And the N.Y. Times chronicled the comedic drama here.
Akihito, who turns 76 next month, is the eldest son and fifth child of Emperor Showa, the name given to an emperor and his reign after his death.
Emperor Showa is better known abroad by the life name of Hirohito. He became emperor in 1925 and died in 1989, the longest historically-known rule of the nation's 125 emperors.
Hirohito presided over his nation's growth from an undeveloped agrarian economy into the expansionist military power and ally of Nazi Germany of the 1930's.
And, later, Japan became a global economic giant. Hirohito, along with Prime Minister Hideki Tojo, who authorized the 1941 attack on Pearl Harbor, were much reviled abroad during World War II.
Historically debate has simmered over how much of a political puppet Hirohito was to the country's military before and during the war.
Even after Democratic President Harry Truman ordered the two atom bombs dropped on Hiroshima and Nagasaki in the summer of 1945, there were strong forces within Japan that wanted to continue to fight the Americans in the spirit of kamikaze suicide pilots.
But Akihito's father went on national radio, the first time his subjects had ever heard Hirohito's voice, and without using the inflammatory word "surrender," pronounced that the country must "accept the unacceptable." It did.
As the conquering Allied general and then presiding officer of the U.S. occupation, Gen. Douglas MacArthur, decided to allow Japan to keep its emperor as a ceremonial unifying institution within a nascent democracy.
Tojo, on the other hand, was hanged.
Akihito was born during Japan's conquering of China and was evacuated during the devastating American fire-bombing of Tokyo, which was built largely of wood in those days.
The future emperor learned English during the U.S. occupation, but, inexplicably, his father ordered that his oldest boy not receive an Army commission as previous imperial heirs always had.
Akihito assumed the throne on Jan. 7, 1989. Within weeks he began a series of formal expressions of remorse to Asian countries for Japan's actions during his....
father's reign. In 2003, he underwent surgery for prostate cancer.
In 1959, Akihito married Michiko Shoda, the first commoner allowed to enter the Japanese royal family. That was two years before the birth of Akihito's future presidential guest, Barack Obama.
Now VP Joe Biden was already 17 by then. But he wasn't a senator.
A senior administration official said President Barack Obama was simply observing protocol when he bowed to Japanese Emperor Akihito and Empress Michiko upon arriving at the Imperial Palace in Tokyo on Saturday.
“I think that those who try to politicize those things are just way, way, way off base,” the official said. “He observes protocol. But I don’t think anybody who was in Japan – who saw his speech and the reaction to it, certainly those who witnesses his bilateral meetings there – would say anything other than that he enhanced both the position and the status of the U.S., relative to Japan. It was a good, positive visit at an important time, because there’s a lot going on in Japan.”
The Drudge Report gave a banner headline to a photo of the encounter: “OBAMA BOWS BEFORE JAPAN’S EMPEROR.” Drudge linked to a Los Angeles Times blog post that headlined the photo: “How low will he go?”That led to a raft of e-mail to POLITICO asking why we weren’t covering this big story.
Think the worst is over? Wrong. Conditions in the U.S. labor markets are awful and worsening. While the official unemployment rate is already 10.2% and another 200,000 jobs were lost in October, when you include discouraged workers and partially employed workers the figure is a whopping 17.5%.
While losing 200,000 jobs per month is better than the 700,000 jobs lost in January, current job losses still average more than the per month rate of 150,000 during the last recession.
Also, remember: The last recession ended in November 2001, but job losses continued for more than a year and half until June of 2003; ditto for the 1990-91 recession.
So we can expect that job losses will continue until the end of 2010 at the earliest. In other words, if you are unemployed and looking for work and just waiting for the economy to turn the corner, you had better hunker down. All the economic numbers suggest this will take a while. The jobs just are not coming back.
There's really just one hope for our leaders to turn things around: a bold prescription that increases the fiscal stimulus with another round of labor-intensive, shovel-ready infrastructure projects, helps fiscally strapped state and local governments and provides a temporary tax credit to the private sector to hire more workers. Helping the unemployed just by extending unemployment benefits is necessary not sufficient; it leads to persistent unemployment rather than job creation.
The long-term picture for workers and families is even worse than current job loss numbers alone would suggest. Now as a way of sharing the pain, many firms are telling their workers to cut hours, take furloughs and accept lower wages. Specifically, that fall in hours worked is equivalent to another 3 million full time jobs lost on top of the 7.5 million jobs formally lost.
This is very bad news but we must face facts. Many of the lost jobs are gone forever, including construction jobs, finance jobs and manufacturing jobs. Recent studies suggest that a quarter of U.S. jobs are fully out-sourceable over time to other countries.
Other measures tell the same ugly story: The average length of unemployment is at an all time high; the ratio of job applicants to vacancies is 6 to 1; initial claims are down but continued claims are very high and now millions of unemployed are resorting to the exceptional extended unemployment benefits programs and are staying in them longer.
Based on my best judgment, it is most likely that the unemployment rate will peak close to 11% and will remain at a very high level for two years or more.
The weakness in labor markets and the sharp fall in labor income ensure a weak recovery of private consumption and an anemic recovery of the economy, and increases the risk of a double dip recession.
As a result of these terribly weak labor markets, we can expect weak recovery of consumption and economic growth; larger budget deficits; greater delinquencies in residential and commercial real estate and greater fall in home and commercial real estate prices; greater losses for banks and financial institutions on residential and commercial real estate mortgages, and in credit cards, auto loans and student loans and thus a greater rate of failures of banks; and greater protectionist pressures.
The damage will be extensive and severe unless bold policy action is undertaken now.
Katie thinks that while President Obama's job summit is sensible on policy grounds it will be a political liability, reinforcing his image as a dithering talker in the face of crisis.
Says Katie, "Is it a good idea? Yes. Having key stakeholders put their heads together, or at least communicate about the problem, will undoubtedly produce some interesting ideas." So, case closed, right? Wrong! "The 'optics' of the summit ... might just work against him," Katie warns. "Obama is undeniably a deliberative president. He shares none of his predecessor's brash decisiveness ... I'm not sure the public finds that tendency comforting anymore."
Katie's premise is correct. Many Americans are reassured by leaders like our erstwhile "decider" in uncertain times. Until, that is, their rash decisions prove disastrous. Then Americans die, deficits mount, and their approval ratings plummet. Advertisement
So, while Katie's political advice to Obama might be wise in the short term, it strikes me as short-sighted. Good policy is good politics, especially where the economy is concerned. Careful decision making now will pay political dividends later.
Nor, it should be noted, did Sen. John McCain's seemingly precipitous decision to suspend the presidential campaign during the financial crisis last summer redound to his benefit politically.
The first thing people want in a crisis is to see that the president is paying attention to the problem. President Bush's itchy trigger finger on fighting terrorism was perceived as legitimate, even reassuring, only because he addressed Congress shortly after 9/11 and said his administration would henceforth be committed to the struggle.
Issue-based summits are a good way of telegraphing to the public that you are putting an issue on the front burner. And, in the case of the summits on the financial crises and health-care reform, they were followed by bills in Congress. The summits served as a kick start, not a delay.
One of McCain's biggest liabilities was the perception that—being so old and wealthy that he didn't know how many homes he owns—he was out of touch. Obama is sending another message to Americans with his jobs summit, besides being serious about the problem he is saying, as Bubba would, "I feel your pain." Laugh if you want, but doing that is a necessity for politicians, especially ones in the "Mommy Party."
Today, just before jumping on Air Force One for his nine-day trip to Asia, the President announced that he'll convene a "Jobs Summit" in December. Amid rising joblessness, the summit will ostensibly aim to figure out ways to create new jobs and stem the flow of recession-induced layoffs. The president will invite CEOs, economists, unions, and small-business leaders to meet with administration officials at the White House to discuss the issue. "It's important that we don't make any ill-considered decisions—even with the best intentions—particularly at a time when our resources are so limited. But it's just as important that we are open to any demonstrably good idea to supplement the steps we've already taken to put America back to work. That's what this forum is about," Obama told reporters today.
Is it a good idea? Yes. Having key stakeholders put their heads together, or at least communicate about the problem, will undoubtedly produce some interesting ideas and spark important conversations. But is it a good idea for Obama? That's questionable. The "optics" of the summit—those elusively defined, fuzzy readings of events that pundits like to bang on about—might just work against him.
The president has recently been accused of "dithering." Of course, that particular criticism was in regard to his impending decision of Afghanistan strategy—arguably the most important decision of his presidency so far, given the potential for loss of life. But the word has stuck in people's minds because, depending on your perspective, dithering and deliberating can be interchangeable. And Obama is undeniably a deliberative president. He shares none of his predecessor's brash decisiveness—a fact that I, for one, am happy about. I'm pleased to hear of any president who takes time to weigh options and map out their implications. But I'm not sure the public finds that tendency comforting anymore.
In times of uncertainty, voters often gravitate toward decisiveness. Many found comfort in George W. Bush's unflinching reaction to 9/11, but as time progressed and his actions appeared increasingly rash or reckless, his don't-blink-in-the-face-of-trouble countenance became worrying. However, swing voters have notoriously short memories, and so Obama appears to be suffering the opposite fate. In him, voters chose someone purposely contemplative, and yet now they seem in a mood for firm action. Another summit won't cut it. What it will likely do is feed a narrative, which harks back to the campaign, about the president being all talk. I can hear the complaints now: Obama has health forums and beer summits, but what's the point? (That deliberative discussion is essential to functioning democracies isn't an answer that holds muster with such critics.)
A job-creation strategy isn't something that comes together overnight. Any such plan would be a farce. But in publicly announcing a brainstorming session, Obama is opening the door for a barrage of criticism about the questionable usefulness of talkfests, and why he's taken so long to develop an overarching jobs strategy. Yes, he needed to make clear that jobs are a priority for him. Of course he needs to assure America that his mind is on the issue and he's working on solutions. I even think a jobs summit per se is a good idea. Let's put smart, interested parties in a room and see what they come up with. But with the "dithering" president playing host to the group, I'm not convinced their solutions won't just become partisan ammunition, while Obama is portrayed as hesitant and dawdling. And that would be a pity.
Welcome to the BLACK POLITICAL BUZZ Blog. (Established 2008)
My name is Laurel. (Author & Publisher)
I Blog with a focus on POLITICS, Business, and occasionally Entertainment.
FACTS ABOUT LAUREL:
Wife,
Mother of a U.S. Soldier,
Sister,
Woman of GOD,
Loyal Friend,
Creative,
Blood-related to a nationally known Charlotte Politician.
Black Female, Intelligent,
Married,
Love to Travel,
Credentialed by the RNC and DNC.
Political Blogger/ Commentator
Grassroots Activist,
PROFESSIONAL STATUS:
Credential Political Blogger/ Commentator,
Registered Independent Voter
Original Native of BROOKLYN, NY
Currently reside in CHARLOTTE, NC
I’m Nice but don’t get it twisted because my Mind is Sharp!
Since You’ve Chosen to Visit and Read the Contents of this Blog by Personal Choice, and of Your Own Free Will,
Please don’t ask me to Compensate you for Expressing individual commentary/ Posted Articles, which are protected by the First Amendment, citing Freedom of Speech & Freedom of Expression.
No Intentionally Malicious Slander, Libel or Defamation of Character content will be published and I will always Credit all Sources.
NOTE TO ALL ELECTED OFFICIALS, APPOINTED OFFICIALS & PUBLIC FIGURES:
Per the Landmark U.S. Supreme Court Case: 1964 case of New York Times v. Sullivan………
The Public has a Right to Criticize the People who Govern them, so the least Protection from Defamation is given to Public Officials. When officials are accused of something that involves their behavior in office, they have to prove all of the above elements of defamation and they must also prove that the defendant acted with “actual malice.” (For a definition of actual malice, see the “History of Defamation and the First Amendment, below.”)
People who aren’t Elected but who are Still Public Figures because they are influential or famous — like Actors, Actresses, Movie Stars, Singers & Entertainers, Journalists, TV Hosts, Bloggers, etc., — also have to Prove that Defamatory statements were made with Actual Malice, in most cases.
To the Associated Press and other Media Organizations:
When I use your Content Links., I’m also citing the Fair Use Doctrine (Title 17 U.S.C. Section 107) for further Copyright permission.
Posts and Links published on Black Political Buzz are not endorsed by Black Political Buzz Blog Author Laurel’s Employer, nor the Employers of other Black Political Buzz employees.
This includes Links, Posts and Comments posted on Black Political Buzz’s Facebook and Twitter account pages.
Comments, Links and Opinions of site visitors are Independently-Owned and not endorsed by Black Political Buzz employees, Blog Author Laurel or Laurel’s Employer.)
(No Personal Offense intended) Please know that Black Political Buzz is not responsible for nor do I endorse Requests for Donations from Third Parties on this Blog.
I will Only Endorse Requests for Donations made on behalf of BLACK POLITICAL BUZZ Blog for Business Purposes & Operating Expenses.
I will also Only Endorse Requests for Donations on behalf of Legitimate Politicians and Legitimate Political Candidates. PERIOD!!
If anyone else or another Organization wishes to post a link to Request Donations, I am NOT endorsing ANY of those Requests!
Unless I receive a personal Request to do so and I have Professionally Confirmed that the Third Party Organization or Charity is indeed a Legitimate Entity.
NOTE: Anyone who chooses to give to any Third Party Organization NOT Endorsed by BLACK POLITICAL BUZZ is doing so at his or her own risk.
BLACK POLITICAL BUZZ does NOT Discriminate against Politicians, Political Candidates, Organizations or Charities based on Race, Color, Nationality, Ethnicity, Gender, Sexual Orientation, Religion, Faith, Disability, Political Affiliation, Creed, Education, Social Status, Age.
This disclaimer applies to ANY and All requests for Donations on this Blog. Thanks for understanding. Again No Personal Offense intended.
For Story Tips….Corrections…….. or Requests for Endorsements:
Please contact me via e-mail: blackpoliticalbuzz@gmail.com
or via my Facebook page: facebook.com/blackpoliticalbuzz
Thanks for stopping by
God Bless
Laurel @BLACK POLITICAL BUZZ
LINKS: POLITICAL PERSPECTIVE & INFORMATIONAL SITES
.jpg)
