Because the Banks Went For The Heart

We must employ a system of oversight on the banking business. We can't even recover from the last scam the pulled before we have to dig our way out of a new one. Over and over and over.

San Francisco Chronicle Oct. 25, 2009


Eight million jobs have been lost nationwide since the recession began two years ago, and by some measures workers face the worst job market since the Depression. The average laid-off worker has been without a job for 61/2 months, a post-World War II record. Many of those workers will never recover financially.

California's hole, deepened by a state budget mess and volatile tax system, is far worse: Unemployment is at
12.2 percent, third highest in the nation; and adding discouraged and part-time workers puts it over 20 percent.

"It's not even a jobless recovery; it's a recovery with more job losses," said UCLA economist Lee Ohanian. "The idea of having essentially no net job creation after a remarkably severe recession is a real pathology for the U.S. economy."

'Painfully weak' job growth

Top White House economist Christina Romer of UC Berkeley told Congress on Thursday that employment growth could remain "painfully weak" through next year, and that the largest effect from the $787 billion stimulus enacted in February, mainly aid to states, is past. By mid-2010, she said, the stimulus will no longer contribute to growth.

Alarms are ringing at the White House and in Congress. But with a mind-boggling $1.4 trillion deficit this year, Democrats have used up their bullets. The word stimulus has such a bad connotation that the term has been banished from new efforts to goose the economy and help workers, such as extending unemployment benefits, sending $250 checks to seniors and a program the White House announced to help small businesses get loans.
House Speaker Nancy Pelosi, D-San Francisco, and top House Democrats met for four hours with economists Wednesday, amid criticism from the left that the stimulus was poorly targeted on jobs. Calls have mounted for a tax credit to hire workers, much like one tried three decades ago during the Carter administration, but there is little appetite in Congress or the administration for more stimulus spending.
Romer and Vice President Joe Biden's economist, Jared Bernstein, cited high deficits in downplaying calls for a new stimulus. "Remember, stimulus by definition is temporary," Bernstein said. "In the interest of fiscal rectitude, we need to ramp the spending down no later than necessary."
Even under optimistic assumptions, it could take seven straight years of solid growth just to get employment back to where it was before the downturn, a Rutgers University analysis found.

Almost no one is expecting job growth to roar back, given its anemic increase in the last decade, when the economy generated on average 1 million jobs a year, less than half as many as during the booms of the 1980s and 1990s. Median income actually fell more than $2,000 over the decade







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