Unemployment Expected to hit 11% in 2010. Just How Bad Was Unemployment Under President Bush?

Fed mulls tweaks to economic revival programs

WASHINGTON – With signs the economy is improving but still fragile, Federal Reserve policymakers are considering whether some programs intended to drive down rates on mortgages and other consumer debt should be slowed down. (Is the Administration  reversing course here or are they just running out of money …)

The nation’s unemployment rate — now at 9.4 percent — is expected to keep climbing into 2010. Acknowledging that the jobless rate is going to climb over 10 percent, President Barack Obama said Tuesday he’s not satisfied with the progress his administration has made on the economy.

Some analysts say the rate could rise as high as 11 percent by the next summer (2010) before it starts to decline. The highest rate since World War II was 10.8 percent at the end of 1982.

An index measuring chief executives‘ business expectations showed an improved outlook from last quarter’s record low, but many still expect declines in sales, jobs and capital spending.

“We don’t see continued free fall,” Ivan G. Seidenberg, chairman of the Business Roundtable and CEO of Verizon Communications, said Tuesday. “But nobody’s ready to suggest they’re going to begin hiring.”

http://news.yahoo.com/s/ap/20090624/ap_on_bi_ge/us_fed_interest_rates

The following is not intended to be a defense of President George W. Bush’s economic policies – it is not. President George W. Bush’s failure to keep the Democratic Congress’s spending in check and his inability to get that Congress to curb their reckless mortgage programs between 2006 and 2008, led to our current economic woes. That said, the following are facts:

During the 8 years of the George W. Bush Presidency the lowest annual unemployment rate was 4.61% in 2007, the highest annual unemployment rate was 5.76% in 2008. During Bush’s 8 years as President the average unemployment rate  was 5.27%, roughly 1/2 half of what the unemployment rate is today.

Before you post an unsubtantiated response, I invite you to check the math for yourself.   http://www.miseryindex.us/urbyyear.asp 

During the George W. Bush presidency the average number of people “unemployed” at any time was 8.25 million. At the end of May 2009, a total of 14.9 million people were unemployed (9.4% unemployment rate). http://www.bls.gov/news.release/empsit.nr0.htm 

When unemployment hits 11% in 2010, over 17 Million will be unemployed, well over twice the average number of unemployed during the George W. Bush Presidency.     

It is unfortunate that the “experts” now predict that the  unemployment rate will not drop below 6% before 2016, at the earliest.

Who would have thought that after 6 months of Obama we’d be referring to the “good old Bush days”?

3 Million Unemployed Moving Toward End Of Benefits – MSM Puts A Smiley Face On Tragic Story

WASHINGTON (AP) — The total number of people on the unemployment insurance rolls dropped for the first time since early January, the government said Thursday, while new claims for benefits rose slightly.

This reporting is so dishonest it makes me want to scream – notice the report dsoes not state that the total number of unemployed has droped – just the number “on the unemployment rolls has decreased”. Please Read On ….

Nearly half (50%) of recipients at the end of last month had exhausted the 26 weeks of benefits provided under the regular state program without finding work, according to Labor Department data. That’s a record and compared with about 36 percent in December 2007, when the recession began. (A 14% percent increase)

The reason the number of people “on the jobless rolls” has dropped is because over a million of the unemployed  exhausted the last of their benefits, both State and Federal extensions, thgis past month and are without any unemployment benefit whatsoever … Please read on.

“It is unlikely that new hiring has picked up in any meaningful fashion,” Joshua Shapiro, chief economist with MFR Inc., a consulting firm, wrote in a note to clients.

The department said the total unemployment insurance rolls fell by 148,000 to 6.69 million in the week ending June 6, the largest drop in more than seven years. The number of new “claims” toppped 600,000 for the 21st straight week, however, the number of individuals being removed from the rolls because they have either exhausted their benefits or been disqualified from receiving additional benefits, topped 750,000, resulting in what this report claims is a 148,000 person reduction on the “unemployment rolls. This is a classic example of unethical reporting, a politically motivated attempt to create a “positive political spin”.

The drop also breaks a string of 21 straight increases in continuing claims, the last 19 of which were records. A dip in continuing claims several weeks ago was later revised higher. Initial claims rose by 3,000 to a seasonally adjusted 608,000 in the week ending June 13, above analysts’ expectations. The four-week average, which smooths fluctuations, fell by 7,000 to 615,750. Continuing claims data lags initial claims by one week. State laws provide for 26 weeks of unemployment benefits. The Federal Government, as part of the stimulus package, provided an additional 13 week extension. Those benefits are now being exhausted and this report implies that the individuals that have exhausted their benefits are no longer unemployed. We are now in the 22nd week in a row where the “new claims average” have topped 600,000.    

Still, millions of Americans are receiving unemployment compensation under an emergency federal program authorized by Congress last summer and extended by the Obama administration’s stimulus package.

About 2.4 million people received benefits under that program in the week ending May 30, an increase of more than 102,000 from the previous week. That’s in addition to the 6.7 million people receiving benefits under the 26-week program typically provided by states.

First-time jobless claims are a measure of the pace of layoffs and are seen as a timely, if volatile, indicator of the economy’s health. Initial claims stood at 390,000 a year ago. First time jobless claims stand at 615,000 today. If these same reporters declared last years economy “the worst ever”, how dare they claim an improvement today.

Companies have cut a net total of 6 million jobs since the downturn began in December 2007.

NO ONE WILL CLAIM THAT EMPLOYMENT HAS INCREASED – IT HAS NOT – THE GOVERNMENT TRACKS THOSE NUMBERS ALSO – THERE IS SIMPLY NOTHING TO REPORT IN REGARD TO NEW HIRING OR JOB CREATION.

The Country, as a whole, lost a net 300,000 jobs last month:

In April, nonfarm payroll employment decreased in 44 states and the District of Columbia and rose in 6 states.  The largest over-the-month employment decrease occurred in California (-63,700), followed by Texas (-39,500), Michigan (-38,400), Ohio (-25,200), Illinois (-23,100), and Wisconsin (-21,100).  Michigan experienced the largest over-the-month percentage decrease in employment (-1.0 percent), followed by New Mexico (-0.9 percent) and Kansas, New Hampshire, and Wisconsin (-0.8 percent each).   http://www.bls.gov/news.release/laus.nr0.htm 

http://finance.yahoo.com/news/Jobless-benefit-rolls-drop-apf-1306581616.html?x=0

The City of Detroit is repsonsible for the Officials it has elected over the last decade and the mismanagement and corruption they have brought to the City (http://www.detnews.com/article/20090618/METRO/906180473/1409/METRO ) and the people of the State of Michigan are responsible for re-electing their current Governor, Governor Granholm’s policies have helped destroy Michigan’s economy over the last 7 years, that said, the facts are this, the City of Detroit claims a population of 900,000 (after years of artficially high census counts, the City’s attempt to artificially increase the amount of Federal funding it receives). At present the unemployment rate is 22.8% , 207,000 Detroit residents are currently “counted” on the “unemployment rolls”. Food Stamps are being provided to 30% of the City’s residents (300,000 residents). http://online.wsj.com/article/SB124510185111216455.html

An additional 185,000 residents have exhausted their available unemployment benefits and are unemployed, but not counted as being “on the rolls” – that is an additional 20.5% of the population. The “true unemployment rate” in the City of the Detroit is approximately 45%, out of every 10 residents, 4 1/2 are either receiving unemployment or have exhausted their available benefits. THE RECENT SHUT DOWN OF THE AUTO PLANTS IS NOT REFLECTED IN THESE NUMBERS.(Most of the Detroit 3 Plants are not actually located in Detroit, as is falsely reported – they are located in surrounding communities – 7 of GM’s 14 “national” plant closing will take place in Oakland County, a County north of Detroit. Detroit is located in actually located in Wayne County). http://online.wsj.com/article/SB124510185111216455.html , http://detnews.com/article/20090601/AUTO01/906010376/1411/Oakland-County-staggered-by-an-estimated-6-600-GM-job-losses 

People are falling out of the frying pan and into the fire and all this type of reporting does is mask the true level of suffering being encountered in Middle America today.  

Michigan’s “statewide” unemployement rate is above 14%, that means 1 out of every 7 workers is currently receiving State or Ferderal unemployed benefits. http://www.mlive.com/business/index.ssf/2009/06/michigan_unemployment_rate_hig.html . The “uncounted” unemployed in Michigan may double the total number.   

Are Global Economies Slipping Into Deflationary Death Spiral?

The Global Economy’s Big Fear Becomes Real: Deflation

The deterioration of the global economy in the wake of the ongoing U.S. housing bust and subsequent credit crunch is accelerating at a frightening pace. In the U.S., nothing captures the concussive force of the downturn better than the Consumer Price Index issued Wednesday, which showed prices falling by one per cent in October after being flat in September. Suddenly, the prospect of outright deflation in the U.S. economy — and all the risks that entails — is a clear and present danger. (See TIME.com Nov. 6, 2008). “With the unemployment lines growing ever-longer there is a genuine risk that the U.S. economy could fall into a corrosive deflationary phase,” says Sheryl King, Senior US economist at Merrill Lynch.

But deflation isn’t just a U.S. anxiety. Japan, which only emerged from deflation earlier this decade, is now back in recession, has negligible inflation, and could soon see prices falling again. So too in Europe, where the European Central bank was behind the curve in seeing the risks to growth that the credit crisis posed, and kept interest rates too high for too long. Though not in outright deflation yet, the pressures across Europe are all on the downside. Even in China, the world’s largest developing nation, officials now acknowledge that the risk of inflation — its main concern at the time of the Beijing Olympics in late August — is now gone. At a high powered international financial conference in Beijing over the weekend, a senior People’s Bank of China official acknowledged to TIME that, “if anything, we now need to fight against falling demand, and possibly even falling prices.”

See pictures of The Global Financial Crisis

At the core of the mounting global concerns about deflation is this: the global financial system is going through a vicious process of deleveraging: financial institutions are reducing debt and raising capital, either directly from governments or from private sector sources. By desperately trying to rebuild their battered balance sheets and regain some semblance of investor confidence, banks and investment banks are not doing much lending. Indeed, the definition of deleveraging means reducing debt relative to assets. Assets, for banks, are loans. And these days pretty much everyone is deleveraging.

That doesn’t bode well for global growth prospects. David Roche, President of Independent Strategy, an economic consultancy in London, notes that throughout most of this decade “the world economy has been used to using $4 to $5 of credit for every $1 of GDP growth.” Even if this “profligate use of capital is halved,” Roche argues, “it still means credit expansion of 10 to 15% is needed to achieve real growth of 2 to 3%.” The problem: credit, far from expanding, is still contracting globally — despite governments’ efforts to date to salvage the financial system.

The result — a deflationary bust — is evident everywhere. On Thursday morning crude oil prices — as good a barometer as any for global economic activity — plunged below $50 a barrel. In July crude peaked at $147.

As Merrill Lynch economist King argues, it’s likely the deflationary forces will intensify as the result of a vicious cycle. As economic conditions deteriorate, bank lending naturally declines because the number of credit-worthy borrowers — whether corporate or individual — shrinks. In other words, financial institutions that got into their current, egregious situation by making bad loans aren’t going to recover by making more bad loans. Thus, a declining economy leads to contractions in lending, which further dampens demand.

What’s astonishing about the current cycle is how quickly the global economy got into this situation. Government — from Ben Bernanke, the U.S. Federal Reserve chief, to the Chinese Communists in Beijing to pretty much everyone in between — all know more or less that the only policy response available to them is to flood their economies with money. China announced a big stimulus package nearly two weeks ago, and in Beijing last weekend, government policymakers acknowledged that more is probably coming. In the United States, another fiscal stimulus plan seems inevitable; the Federal Reserve, meanwhile, is likely headed to what in Japan in the 1990s became known as the “ZIRP:” zero interest rate policy. The Fed funds rate is already down to one per cent, and the economy is still sinking. Rates have nowhere to go but down — all the way to zero. And by the time President-elect Barack Obama takes office in January, it’s likely the US will be debating what sort of tax relief to individuals and businesses might be best — mimicking policy discussions that are already occurring along the same lines in Europe and Asia.

The ferocity of the downturn now under way, and the downward pressure it is putting on prices, cannot be underestimated, argues Shanghai-based independent economist Andy Xie. “The world doesn’t need to just throw the kitchen sink at this to avoid a disastrous deflation, it needs to throw the bathroom sink, and the garage sink, and any other sink it can find.” And it needs to hurry.

http://www.time.com/time/business/article/0,8599,1861105,00.html?xid=feed-yahoo-biztech

Democratic Senator Chuck Schumer Hypocrisy On Deregulation

Schumer Tries To Rewrite History

Democratic Senator Charles Schumer of New York says a lack of regulation by the Bush administration is responsible for the current economic troubles. The New York Sun reports Schumer says, “Eight years of deregulatory zeal by the Bush administration, an attitude of ‘the market can do no wrong,’ have led us down a short path to economic recession.”

But Schumer fails to mention he has been a leading voice of deregulation. The Sun reports he championed the repeal in 1999 of the Glass-Steagall Act, the law which separated commercial and investment banking.

Watch a Video that Describes who voted for and who voted against Fannie Regulation: http://www.foxnews.com/video-search/m/20997113/blame_game.htm?q=blame+game

He also wrote an opinion piece for The Wall Street Journal in 2006 which warned about what he called “overzealous regulators” and opposed a bill in 2005 that would have transformed Freddie Mac and Fannie Mae from large investment funds into “conduits” that only bought mortgages, packaged them into securities and sold them on the market.

The 2005 bill was defeated by Democratcs in Congress.

OOPS – Biden Slips, Suggests FDR Was President When Market Crashed

WASHINGTON — Vice presidential candidate Joe Biden says today’s leaders should take a lesson from the history books and follow fellow Democrat Franklin D. Roosevelt’s response to a financial crisis.

“When the stock market crashed, Franklin D. Roosevelt got on the television and didn’t just talk about the, you know, the princes of greed. He said, ‘Look, here’s what happened,”‘ Barack Obama’s running mate recently told the “CBS Evening News.”

Except, Republican Herbert Hoover was in office when the stock market crashed in October 1929. There also was no television at the time; TV wasn’t introduced to the public until a decade later, at the 1939 World’s Fair.

FDR was elected three years later when voters denied Hoover a second term. The Democratic challenger appealed to the “forgotten man” by promising a “new deal” to solve the Depression era.

Biden was commenting on the stock market crash when he said leaders should explain the current economic crisis and how to solve it to the public. 

“Part of what being a leader does is to instill confidence, is to demonstrate what he or she knows what they are talking about and to communicating to people … this is how we can fix this,” Biden said.

NOTHING NEW HERE – OBAMA & BIDEN – DON’T LET THE FACTS GET IN THE WAY OF YOUR STORY. I HAVE TO ADMIT – HIS GAFFES MAKE ME SMILE.

Bailout Opposition Grows 09/23/08

Leading Banking Panel Senators Reject Bailout Plan

Tuesday, September 23, 2008

WASHINGTON —  Leading senators of both parties are expressing strong reservations about the administration’s financial bailout plan despite pleas from the treasury secretary and Federal Reserve chairman for quick passage.

Sen. Chris Dodd, a Connecticut Democrat, said on Tuesday, “What they have sent us is not acceptable.”

Sen. Richard Shelby, an Alabama Republican, said, “We have got to look at some alternatives.”

“Nobody is happy” about the bailout request, said House Majority Leader Steny Hoyer, D-Md., although he spoke of possible passage of legislation by the weekend.

Added Rep. Darrell Issa, R-Calif., “I am emphatically against it.”

Even before Paulson could speak, lawmakers expressed unhappiness, criticism of the plan and — in the case of some conservative Republicans — outright opposition.

Sen. Richard C. Shelby of Alabama, the panel’s senior Republican, was even more blunt. “I have long opposed government bailouts for individuals and corporate America alike,” he said. Seated a few feet away from Paulson and Bernanke, he added, “We have been given no credible assurances that this plan will work. We could very well spend $700 billion, or a trillion, and not resolve the crisis.”

Sen. Jim Bunning, R-Ky., added, “This massive bailout is not a solution. It is financial socialism and it’s un-American.”

Polls reflect that 66% of America opposes the bailout. 

http://www.foxnews.com/story/0,2933,426505,00.html

John McCain’s 2006 Warning About Today’s Financial Crisis

Which candidate foresaw the credit crisis and tried to do something about it?  As it turns out, John McCain did — and partnered with three other Senate Republicans to reform the government’s involvement in lending in 2006.

McCain spoke forcefully on May 25, 2006, on behalf of the Federal Housing Enterprise Regulatory Reform Act of 2005;

Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.

I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.

I urge my colleagues to support swift action on this GSE reform legislation.”

In this speech, McCain managed to predict the entire collapse that has forced the government to eat Fannie Mae and Freddie Mac, along with Bear Stearns and AIG.  He hammers the falsification of financial records to benefit executives, including Franklin Raines and Jim Johnson, both of whom have worked as advisers to Barack Obama this year.

The Bill never made it out of committee.  Chris Dodd, then the ranking member of the Banking Committee and now its chair, was in the middle of receiving preferential loan treatment from Countrywide Mortgage, one of the companies gaming the system in the credit crisis.  Meanwhile, Barack Obama took hundreds of thousands of dollars making him the #2 recipient of Fannie/Freddie money:

http://hotair.com/archives/2008/09/17/mccains-attempt-to-fix-fannie-mae-freddie-mac-in-2005/

%d bloggers like this: