current rate

Home » current rate

Local Edge Radio – Focus on Jobs

A couple weeks ago I hosted local edge radio and I spent the whole segment talking about the fact that our government needs to focus on jobs like a laser. Our problem is not our debt. Deficit spending is not what is on the minds of the average American. The average American is wondering how to make ends meet. The average American is either out of work or knows somebody who’s out of work. This is what we need to fix. In my opinion, there’s nothing more important than fixing our job situation. There’s plenty of blame to go around. Whether you want to blame the Obama administration for not asking for a large enough stimulus in order to really fix the jobs problem or you’d like to blame House and Senate Republicans for blocking every jobs bill since the stimulus – the bottom line is that it really doesn’t matter whose fault it is. The problem is that neither party is 100% focused on jobs.


The job situation is improving, but we have to do better. Economists calculate that at our current rate we will not achieve full employment (unemployment rate below 5%) for another five – seven years. Most Americans should not have to suffer for five to seven years because we don’t have the political will to do what’s necessary. We need to fix this problem.

By |2012-08-30T20:23:53-04:00August 29th, 2012|Economy, Podcasts|Comments Off on Local Edge Radio – Focus on Jobs

Job numbers are good but we need better

Slowly but surely, the economy is heading in the right direction. If the economy were a patient, the patient would still be in the ICU on multiple antibiotics. Though still on a ventilator, the patient looks better and is heading in the right direction. An infusion of 244,000 new jobss is part of the prescription for getting the patient back on his/her feet. Over the last three months, private sector jobs have grown by over 700,000. This is all good news. Yet, as I have said over the previous months, it is not time to do the happy dance. It is time to give our patient an infusion of more jobs (stimulus), which will really jumpstart the economy. This is what is desperately needed. Unfortunately, the political atmosphere in Washington will not get this done. No meaningful legislation will come out of the House over the next 18 months.

We still have 14 million Americans who are unemployed. 14 million Americans! At our current rate of job growth we can get our unemployment level back to prerecession levels by the year 2016. Who can wait that long?

If you look at the numbers more critically and break down unemployment by groups, certain groups are clearly hurting more than others. The unemployment rate among our youth (16-24) is a whopping 17.6%. For those youth with only a high school education the unemployment rate averaged 21.8% last year. The unemployment rate among African-Americans is 16.1% and among Hispanics is 11.8%. The unemployment rate among men is 9.4% and among women 8.4%.

Wages are stagnant. Hourly wages rose a paltry three cents in April. With 14 million Americans unemployed, currently the economic pressure is not there for employers to raise wages. (Great article by Rick Newman about why wages are stuck in neutral.)

So, we need more jobs. We need better paying jobs.

By |2011-05-06T15:47:22-04:00May 6th, 2011|Economy|Comments Off on Job numbers are good but we need better

How much money do these big banks owe you?

I originally posted this a couple of months ago. We still need to break up the banks and we are still owed money so, I thought I would re-post.

Last week, the Bureau of Labor Statistics released the employment report showing that 162,000 jobs were added in the month of March. Republicans look for the bad in the numbers, the Democrats look for the good and the reality was somewhere in the middle. It is nice that the economy has started adding jobs. The economy has added jobs three out of the last four months, yet we’re still in a huge jobs hole. In order to get the unemployment rate of 9.7% back down to the pre-recession rate of 5.0%, we need at least 11 million jobs. At our current rate it will take a 67 months to create 11 million jobs, just over five years. Who is willing to wait for five years?

I’m in the middle of reading Michael Lewis’ book, The Big Short. The whole subprime mortgage market was a big scam. These Wall Street banks would come up with new and exciting ways to entice people who could not afford a house to take out a mortgage on a house. As far as I know, it wasn’t illegal but it was unethical. The system was predicated on rising housing values. As long as the housing values rose, the folks with adjustable mortgages would simply refinance. (Many of us worry about the cost of refinancing, but those costs were waived in many of these subprime mortgages.) I’m still trying to figure out the purpose of derivatives. It seems like the purpose of derivatives is to hide the true risk and value of a particular security or commodity. It is like using Photoshop to morph me into Denzel Washington. That’s just wrong. If you are looking for Denzel and get me, I guarantee that you are going to be pissed!! Probably the only thing more deceptive and deceitful than derivatives would be these CDOs (collateralized debt obligations), which are nothing more than bundled derivatives. So, just in case you were able to figure out what was in a particular derivative, it became nearly impossible to figure out what was in the CDO. The big banks would then get a credit rating agency like Moody’s to put their AAA stamp of approval on these heaps of garbage. Then they would sell these heaps of garbage to your pension fund and my mutual fund. Funds would buy these things because they were AAA rated by S&P or Moody’s.

So, back to my original question, how much do these big banks owe you and me? When Lehman Brothers, Bear Stearns and Merrill Lynch began to implode in 2008, you and I came to the rescue. The government, using our money, decided that these guys were too big to fail (except for Lehmans, the government let them fail). Failure would’ve caused a catastrophic collapse of our financial system that’s what we were told. So, we reached deep into our pockets and pulled out hundreds of billions of dollars. Over the last several months, many of these banks have been paying back a large chunks of the billions of dollars we lent them. Once they pay all of the $700 billion back, are we square? My answer is no.. not even close. This guy (Andrew Haldane) over the Bank of England calculated that the irresponsibility of these large financial firms has cost the world approximately $4 trillion. When you think about job layoffs, businesses that had to close because the credit markets all froze up, the loss in value of retirement plans, yup… $4 trillion sounds about right.

The big question is how do we collect? It is clear that they owe us. I don’t think that we will ever get paid. I don’t think that we will ever get back the money that we lost because of their incompetence, arrogance and stupidity. The one thing that we can do is to make sure that this never happens again. We have to break up the banks. I don’t think that breaking them up into large chunks is a good idea. We need to break them up in such a way that they can fail without jeopardizing our economy. According to Robert Reich, $100 billion should be the upper limit. Okay, I can agree with this number. It is arbitrary. The loss of $100 billion is not going to bring down our economy. I like the number. (I also want to get rid of credit default swaps and derivatives need to be regulated, as do these huge pools of money called hedge funds.) So, it’s time to push Congress, and especially the Senate, towards better regulation and breaking up these huge banks and financial institutions.

By |2010-05-27T19:06:04-04:00May 27th, 2010|Business, Congress, Economy|Comments Off on How much money do these big banks owe you?
Go to Top