Christina Romer was the primary architect of the American Recovery and Reinvestment Act (more commonly referred to as the “stimulus act”). The day the July unemployment report came out Dr. Romer announced that she was resigning chairwoman of the Council of Economic Advisers. On Wednesday, September 1, she gave a farewell speech (interestingly the day before new unemployment claims are reported and two days before the August unemployment figures are due). In this speech she defended the stimulus act as a landmark piece of legislation that “made the difference between a second Great Depression and a slow but genuine recovery.” Millions of Americans who lost their job through no fault of their own and wondering if in fact there will be any unemployment insurance extension and a Tier 5 must be asking “Do you really, really believe that, Dr. Roemer?”
Romer maintained that of the stimulus provisions are working through existing federal programs, which has made it “hard for people to see what the act has done.” Well, you got that right, Dr. Roemer. Over 53% of the American public in a recent poll by The New York Times reported that they believed the stimulus act had little or no effect on improving the economy.
Her speech comes amid signs that the recovery is slowing, with the housing and labor markets struggling. The economy grew at 1.6% in the second quarter and economists are privately expressing rising concern about a possible double-dip recession. The unemployment numbers expected in the next two days are expected to show no improvement.
“We have tools that would bring unemployment down without worsening our long-run fiscal outlook, if we can only find the will and the wisdom to use them,” Romer said. Really, Dr. Romer? If these “hidden tools” are there they then why are they not being used?
While economic historians may well debate the wisdom of the stimulus act for generations, what is beyond doubt is the following fact; When the stimulus bill was being considered in February, 2009, Treasury Secretary predicted that if it were not passed the nation would see “horrendous unemployment” of 8% or more. Well the bill was passed and we have unemployment of at least 9.5%. Now the argument is that if the stimulus bill had not been passed unemployment would be higher. Perhaps. But is a lot like saying “well, only half the neighborhood burned down because we had a fire department.”
Saying, “it could have been worse” is not leadership, it is excuses.
“We, like virtually every other forecaster, failed to anticipate just how violent the recession would be in the absence of policy, and the degree to which the usual relationship between [Gross Domestic Product] and unemployment would break down,” Dr. Romer said. “The only surefire ways for policymakers to substantially increase aggregate demand in the short run are for the government to spend more and tax less. The key is that we need to take action and we need to do it quickly.” Dr. Romer added.
Dr. Romer mentioned additional tax cuts for the middle class, spending on infrastructure and a pending bill to boost small-business lending. She also supported additional efforts to promote exports and finalize new trade agreements. Romer defended the administration’s regulatory approach as “prudent” for the economy.
When one looks at the comments of Dr. Rohmer, there is an extraordinary admission. Basically Dr. Rohmer said:
- We made a mistake in both understanding the recession and its effects on the economy and the unemployment it would cause.
- The results of the efforts we have pit in place have been less then we hoped
Therefore, we should do more of the same.
An understanding of this reasoning is perhaps the best reason why a continuation of the federal unemployment extensions and a Tier 5 is needed. There has been a lot of comment lately, on this site and on others, that somehow those who lost their job through no fault of their own are totally to blame for their own situation and thus, being totally to blame for their own situation are not worthy of government attention to their situation.
Is an unemployment insurance extension or a Tier 5 the answer to the unemployment problem? Well, it is clear that it is not. What is important is a coherent and understandable strategy that will encourage hiring and bring confidence back into the economy. People do not want unemployment insurance benefits, they want jobs.
There should absolutely be tax breaks to encourage hiring. Some have suggested that there be a federal payroll tax holiday for any individual that has been unemployed for longer then six months that is hired. This credit would be for the first year of the individual’s employment but would not be allowed to be taken unless the person is with the company two years or more. It is a complex proposal but worthy of consideration.
Time and time again Federal Reserve Chairman Ben Bernanke has called attention to the fact that banks are hording capital and not even making “good loans” to credit worthy businesses. Many banks aware of the fact that there are many mortgages in their portfolio that probably will be foreclosed are reluctant to hurt their balance sheet and thus are holding capital. A sensible mortgage modification program needs to be reconstituted. Right now less then 30% of troubled home mortgages have been assisted by the previous home mortgage assistance program. This needs to be reconfigured so that more capital is available to the marketplace for job creating expenditures.
Over two years into the Great Recession there really should not be a need for more federal extensions of unemployment or a Tier 5, but there is, not because the unemployed who lost their job through no fault of their own are lazy but, as is becoming increasingly clear the programs to reduce unemployment have failed.
We cannot compound that failure by a refusal to recognize the obvious. Millions and millions of people get up every day to look for work in a job market that is the worst in a generation. Until there is effective leadership and innovative thinking unemployment will only continue to be the highest it has been in a generation. Those who lost their job through no fault of their own are not to be blamed for the need for an extension of unemployment insurance and a Tier 5, it is the failure of leadership in Washington that is to blame.
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Thanks for your support and great compassion on this issue Michael! Data released today by the Department of Labor shows the number of people drawing federal EUC unemployment dropped by 281,676 claimants. One can only conclude that a vast majority of this reduction, since no new jobs are being created, are now new 99ers. Without a Tier 5 until jobs can be produced, we are just throwing these people to the wolves!
Thanks for your comment.
I am looking at the print out of the Dept. of Labor report right now. Remember, that report is only on NEW claims for unemployment insurance benefits. It appears that this has dropped by 2,500 in the four week moving average.
The real report that is important is the monthly unemployment report due to be released tomorrow (9/3). Many are predicting a rise in the national unemployment rate.
Right now, there are 4,554,010 people who are getting federal unemployment insurance via the extensions passed by Congress (Well, that figure is as of th week ending August 21 – the most recent figure available.
I have said before and will continue to say these benefits are due to expire on November 30. If there is to be a Tier 5, which in my opinion is desperately needed, then the first thing is to reauthrize the federal extensions beyond 11/30. If this first step is not done, then there is nothing to add a Tier 5 to.
The stakes for millions could not be higher.
I HAVE NO JOB AND NO RIGHT TO UNEMPLOYMENT BECAUSE THE SCHOOL I WORKED FOR WAS A RELIGIOUS ONE. I WENT FROM A MIDDLE CLASS INCOME TO NONE AT ALL, AFTER WORKING AND PAYING TAXES FOR 40 YEARS. GIVING UNEMPLOYMENT OUT OF SOCIAL SECURITY OR FEDERAL TAXES IS NOT A GIFT IT IS MY OWN MONEY. I WORKED FOR IT I NEED IT AND I WANT IT NOW!
OBAMA DID NOT MAKE THIS MESS THE BUSH ADMINISTRATION DID THIS WHEN IT FUNDED A FAILING WAR!
Thats right chief…a failed democratic/socialist agenda can’t be defended any longer. The answers are just around the corner oh say november, and you know what that means.
As more become unemployed, the funds needed to disperse state aid, food stamps, Medicaid, Welfare, etc. are piling up. Taxes will be increased to fund while homelessness increases.
So everyone loses, even the simpletons who think that we live in a “socialist/communist” society now.
You ignorant trolls had better wake up because increasing poverty will produce the very thing you fear.
Instead of blathering your partisan bullshit, reinvest in our economy, start businesses, volunteer at unemployment centers to help match employer with employee, show your “american ” independence instead of your ass.
As more become unemployed, the funds needed to disperse state aid, food stamps, Medicaid, Welfare, etc. are increasing. This will create a demand for taxes to increase, while joblessness increases simultaneoulsy.
So everyone loses, even the simpletons who think that we live in a “socialist/communist” society now.
To those who come here to post sometimes vile, most of the time incoherent hurtful drivel, instead of blathering your partisan junk, reinvest in our economy, start businesses, volunteer at unemployment centers to help match employer with employee, and create a better future for everyone.
I hire people…but not just anyone. I certainly don’t think we live in a socialistic society, but there is definitely an agenda being put out there. I will survive it…besides its only for a few more months, and then you can get back to work.
Only a survivor ? Thought you were a business owner.
I’d never hire you, because you lack critical thinking skills. Seriously. Keep looking for work. Someone will hire you.
You couldn’t afford me anyway, but that said we have to focus on not giving more handouts to people who aren’t doing anything to earn it. Thats the focus and thats what we will continue to hammer on. We will prevail as you can see there is no big urgency to keep you people on free govt money longer than 2 years.
Neither can whoever supports you, including the gov’t. You waste a lot of time. Also, you people are destined to lose.
Deal with it.
Again sebastian with the trash talking gosh stop looking for attencion .. Thanks
I believe the real Anthony was banned from this site–read yesterday’s article.
Pass tier 5 plzz .. Anthony thanks for being in our side
Being paid to talk and comment and you people are pulled right along.
I have already won…bank account scoreboard baby.
This is a ridiculous article I can’t believe it comes up on the google news search. These people have had 2 years of free ride and they want more. Why not just follow the advice of this author’s obvious hero Nancy Pelosi who said that the best way to stimulate the economy is to increase unemployment.
Lets pass a law that no one needs to work and everyone can collect their check from the government. That would insure a speedy recovery I am sure.
What a joke…this author is on the speed track to being unemployed himself.
The ony joke is you!
How dare you say anything about me…you don’t know me! I’ve worked for 38 years since I was 17 paying taxes and into the UI system! Now that I can’t find a job…yes ANY job…someone like you comes along calling me lazy and looking for a handout!
You’d better stop playing around on the computer during business hours or you’ll find yourself unemployed too!!!!!
Some people don’t have constraints put on them. they are treated like adults and don’t have mcjobs where you have to account to mgmt for every minute of your time. some people do have substantial positions.
You seem to know about a lot about McD’s. Now, apply for the job. Yes you can’t.
Another slow day at your make believe business Sebastian ?
Jealous ?
The stymulus only stopped the economy bleeding, such was the terrible state George W Bush and the criminals on Wall Street left us.
Fear is making people who are working horde their money in savings accounts, as they are fearful they may too lose their jobs next. Savings are up 6% the highest in American history.
While the economy is still in the dumps, unemployment rising, it is right to keep the unemployment extensions in force AND move to a Tier 5. For every dollar given to the unemployed it adds $1.6 to the economy.
However, it is also fear that is stopping companies hiring new workers, and are over working their current employees to the max.
We have got to get business hiring again, but while FEAR is gripping all aspects of the economy, we are in a catch 22 situation.
Michael Colliss! Good morning From Oregon! Another day, another great article by you which I am so happy to read. Thank you.
I’ve spent time studying where our Oregon stimulus dollars have been spent (or designated). I was looking for waste and actually…overall… didn’t find that. I found these funds extended many services very much needed by Oregonians, including unemployment. Hungry people without cars certainly don’t care about newly paved roads but much of it reached worthy destinations for the less fortunate. The stimulus funding didn’t begin to bridge the under-estimated gap & here we are again with no end in sight & soon, fewer services with state employees joining the unemployed. I am BIG picture overwhelmed.
The DOD Budget was what truly blew my mind as I attempted to educate myself on the priorities of our nations’ spending. Wow! I almost wish I hadn’t gone there.
Ignoring the unemployed who presently & clearly have no means to survive is unthinkable. If you ask me, Consumer Spending, by ANY means, is the only thing that will begin the healing process of our nation. Until Job Creation becomes more than a dream, ignoring the unemployed makes no sense for any reason…economic or moral.
Staci…
I agree completely. When you think about it a budget – either our own personal one or a nation’s budget – is not so much about money spent but about value judgements about what is important.
I think it is long past time when we decide what is important and to be valued. Any nation which has over 19% qualifying for food stamps yet cannot summon the will to deal with the reasons for that apppalling figure has, in my opion, some misplaced priorities.
It is always good to hear from you, Staci..hang in there
Michael
There really are Lazy people out there who don’t want to work and would rather collect a gov’t check and eat Bon Bons all day while watching Oprah, no doubt about that. In fact I know some of them. BUT the number of people gaming the system is so small its not worth noting period. As a percentage of the 30 million out of work all across America its almost zero. Grow up and get off the soap box Seabastian and take another look around you. If you see people doing that in your tiny little circle of friends maybe you need some new friends. People are hurting, its that simple. You talk about people who are trying to find work like they are trash. As I said grow up. And FYI I was a card carrying republican for over 30 years. So come on down from the soap box and look around you.
This website should change its name to robtherichguy247.com. This does not pass for news except with those who are looking to gain the system, thankfully I think they are still in the minority. Come November these idiots will be cutoff and will have to get back to work and stop eating bon bons like the above poster said. They really should not be allowed to vote.
Read much ? Of course not. The “above poster” is not in agreement with you, bon bon boy. And it’s not nice to call your friends idiots.
If I may, a few comments…
I would like to think that if there is one thing – and only one thing – that we can all agree on is that the United States is experiencing the worst economic crisis since the Great Depression. I do not think that you would find a respectable or rational economist that would disagree with that statement.
I also think that there is no single answer to this problem. Honest and honorable people can and do disagree. And I do not presume to be some sort of Oracle presenting THE solution. It may not appear so to some, but I actually do work on these articles and of course they are reviewed by the editorial staff of MICMN.com. If these articles have any use at all (a position that I admit I am beginning to question) I would think that they would be a forum to debate in a responsible and reasonable manner different options as to how we are going to get out of this mess. I also would like to think that they offer at least some information to people who are feeling pretty powerless right now, unemployed through no fault of their own, not know when or if Congress is going to take their situation seriously and how and when they are going to become employed again. I have learned in a long life that perhaps the most empowering tool is information. Of course I am not saying that I have all the information or even that any article (including ones I write) should be taken as gospel.
I also think that the comments could be – and have been in the past – a place where people can exchange meaningful and helpful ideas and even offer some mutual encouragement. Several weeks ago a reader commented that after 14 months she found a job and the congratulations (and encouragement that news created) were clear in the comments.
I am retired and work as a volunteer almost full time in advocacy for the unemployed. I do not have, as we say here in Massachusetts “a dog in this fight” in that I am blessed with a pension and a not uncomfortable retirement. I write these articles because I believe that as Benjamin Franklin once said, “We must all hang together or we must all hang separately.”
Of course we will disagree and that is not a bad thing at all. I have also learned that sometimes an honest discussion of disagreements often will lead to a better result.
What is distressing to me is that in recent days, these articles have, rather then be a place for a discussion of different ideas, sort of like the schoolyard at the local grammar school with insults traded continually. I admit that some of them have caused a smile on my face, but this is a serious issue. People who have worked all their lives have now seen their job – and in some cases their hopes – disappear. We are in serious trouble people, and a continual trading of insults having nothing to do with the issue of how we are going to get out of the greatest recession in 70 years is hardly productive.
So, I am asking – pleading, really – that we do not let one person’s (or more than one person’s) bias or desire for attention distract us from the serious discussion of how we are going to – together – move to the point where there is no need for unemployment extensions. That day will come eventually. I do believe that there will again be a time when all who want a job will find one, but we are not there yet.
So, can we please try to return the comments to a level of civility that is worthy of us all and even though sorely tempted, not rise to respond to the occasional insult and abuse?
Please?
Michael Colliss
Michael, your comments above would make a great standalone article on how to behave when posting to blogs, and I thank you for jumping in. Some seem to think that kicking others while their down is some new national sport. I am not a 99′er, but I have had multiple laps in the unemployment pool and have personal concerns going forward as I see no recovery coming anytime soon. I can only imagine the desperation of those 99′ers who have had nothing for months. Your articles give then some hope, some comfort, some validation, and a sense that they still matter. Rest assured what goes around comes around and the mean and the viscous will get their just rewards. Keep up the good work.
SJ
Thank you for your kind words. They mean more to me then I can convey. The other day, I was talking to a fellow I have known for some time – he’s 93 but still is mentally and, I am amazed to say, physically fit. He came of age in the Great Depression and was part of the U.S. Army that liberated Europe in World War II.
We were talking about the current political environment and he shared with me what I have though, but of course being over 90 he had a longer perspective. He told me that he has never seen such a level of hate and anger in American political life as he has seen now. I mentioned the 1950’s McCarthy era as one and he pointed out that really that was not American against American. And I think he is right.
I don’t know what it is, perhaps some are simply unable to accept the results of the last Presidential election, perhaps some are so afraid of their future that they retreat into a bunker of hatred and resentment and perhaps it is because we simply are lacking the giants that once occupied the political stage, but it is there and it – even more then the Great Recession – is, in a way, a greater fear to me then anything else
But we will hang in there…and you do to
Michael
Michael, I think one thing that has really changed, quicker than most realize, is how available information is these days. Even just 10 years ago, a large percentage of companies didn’t even have websites. Now a website is up and running before a company has even “opened its doors”.
Also, 10 years ago, your average person didn’t have a cell phone, let alone a smart phone. These days it is hard to find someone that doesn’t.
What this all boils down to is that we are able to access information almost as it happens these days, instead of relying on the newspaper, television, or the radio.
This change has also allowed the average person to voice their opinions to the world from the comfort of their home. To do this same thing 20+ years ago would have required you to be someone of fame or influence, or just happened to do something that caught the media’s attention.
So has the anger in American political life really changed much? It’s truly hard to say.
We are bombarded by the news media that tends to go out of their way to make shocking headlines, and stories out of non-stories, as each media source fights for their share of the attention. So I believe that is a factor.
But on the other hand, we now can easily see the reactions to what the media has to say. Years ago, you were limited to opinions given by family, friends, coworkers, and those that called into talk shows or wrote letters to the editors (and happened to get put through or published).
I know that you, by your previous employment, had a better insight to what the general public had to say about things. But is still took picking up the phone or writing a letter by the public, as opposed to mostly anonymous ways we can speak out today.
I would say that trying to compare a topic like this is almost impossible when it basically comes down to comparing the “Information Age” versus the days of yesteryear. How can it truly be done?
What will happen in November is those politicians, organizations, and people who despise the unemployed and children of the unemployed, who look for scapegoats, and work to distort and demean will find themselves slack-jawed when millions of unemployed vote out all politicians who block assistance and job creation.
Anyone who knowingly allows a child to go hungry by obstructing, lying, and conspiring against american families in this country is a DISGRACE and COWARD.
Well said, Hope
Hope – I second your posting. I believe the unemployed are not being respected in the pure terms of the number involved including friends and family, former coworkers who know “there but the grace of God, go I”, etc. as well as their intelligence and dignity.
Those that have not been directly or indirectly affected are finally realizing how disgusting and selfish CERTAIN politicans and media are being. Truth will win out!!
I believe, for so many of us, the initial shock of the corporate lay offs were overwhelming and emotional due to most of us having NEVER experienced such unfairness and age discrimination. It has taken much time for us to realize very few or no interviews, even as we “dumbed down” our resumes and expectations!!
We are law-abiding peace-loving Americans who now realize we have been had by a corporate system and banks that have used the opportunity to shore up their profit margins — lay-offs, no raises, “lucky you still have a job!” speeches, etc. I AM ANGRY that gov’t set the country up for the housing and mtg bubble and now stands on the sidelines and allows this administration to be mired in the muck…
suri,
You are intelligent, and well spoken. I sense that you and your husband will be ok as this crisis resolves because you have a good head on your shoulders and a strong, compassionate heart.
I believe that things will improve, but it’s going to take time and a lot of effort on our part. We must continue communicating with our representatives as frustrating and useless as this seems at times.
We are Americans and have served our country as military and supported our country as civilians. We have given to our elected officials, given our financial support and given our trust. What has occurred to our middle class is nothing short of betrayal. Our families and children have been discarded and left behind to face an employment shortage littered with discriminatory hiring practices and divisive tactics. What was once one of the most benevolent countries in the world has deteriorated into a landscape of partisan poison and blame shifting.
Hold on and keep on posting.
Hope.
Rich I just want to say something to your above comment .In 2008 I grossed over 58,000 dollars in sales . Im 46 years old worked since I was 16 years old . Ive paid taxes all those years . In 2009 I was let go and believe me my friend when I got the news I wasnt sure if I was going to piss my pants or throw up . Its a feeling you will never want to feel trust me ! Im on the Michigan program extended benefits ( E.B. ) Basicly the state has you fill out their form to which how , when , and where you are seeking employment and mail or fax it to the state every 2 weeks . Not looking for employment no money , and thats only fair . Ive made a good income the years I was employed so Im in the top money bracket thru the state which is 362 dollars a week ,now take out federal taxes it drops down to 282 dollars a week. Now I look back in 2008 and I took home close to 700 dollars a week . Luckily my wife makes a deccent income so we can make it . The point Im trying to make to you Rich is I make a third less now then in 2008 . Dont you think I would like to be employed ? Ive had to make many financial cut backs and I look back and think of all the money ive made I should have put more money into retirement savings but I didnt . The one thing out of this whole unemployment thing that ive learned is when I do get employed again even for less wages , I do know how to budget my money and believe Im going to hoard it ! So Rich you dont know me so please dont judge me ! And about those bon,bons man I wish , I can only afford no brand ice cream and that isnt every week!
I think this Dr. Romer should be tied to a post and flogged for giving such bad economic advise, and then the old bat should be tarred and feathered and dunked in ink until she looks like her boss.
Sharon
I agree the R. Romer’s performance in the job has been, to say the least, not satisfactory, I must tell you that while I understand you are angry and furstrated, as you should be, suggestions of physical violence and faintly racist remarks are not appropriate in my opinion
If the Republicans make any real gains in November it will be the fox guarding the hen house again and you can kiss any tier 5 goodbye.They are even starting to talk about doing away with Medicare and Social Security.The teabaggers seem to be getting to them.Not that they aren’t a bunch of stooges for the wealthy elite to start with!
Sebastian it’s not ok to give americans so called free money? what about billons of dollars going to aid another counties? Only job there is now good old Labor Ready not allways full of crackheads
CEO’s are pocketing the would be paychecks of America’s unemployed. Check out this article:
http://www.workingamerica.org/blog/2010/09/02/ceos-lay-off-workers-get-higher-pay/
For all the GOP talk about 99 weeks being “too much” unemployment benefits, I think we need to agree on one point. That 99 weeks IS way too long – WAY TOO LONG for anyone to have to wait to have their job restored.
We are not talking about NEW jobs for people who never worked. The reality is that we want jobs reinstated for those who did work.
So – make Congress choose – IMMEDIATE RESTORATION OF JOBS or TIER V. Make them do SOMETHING to STOP these CEO’s from greedily pocketing the would-be paychecks of the unemployed and START RE-hiring.