Surging U.S. Unemployment Rate Puts Pressure on Obama

By Bob Willis | Bloomberg.com

The jump in the U.S. unemployment rate to the highest level in a quarter century last month suggests the recession is deeper than the Obama administration forecasts and additional measures may be needed to restart growth.

The jobless rate rose to 8.1 percent in February as employers reduced payrolls by 651,000, the Labor Department said yesterday in Washington. Losses have now exceeded 600,000 for three straight months, the first time that’s happened since collection of the data began in 1939.

Unemployment has already reached the average rate the White House projected for the whole year. The administration needs to keep its focus on repairing the banking system and implementing the stimulus rather than get diverted by other goals such as healthcare changes, said John Ryding, chief economist at RDQ Economics LLC in New York.

“They should be focused on stabilization” of financial firms “and stimulus — and that should not only be ‘Job one,’ that should be the only job right now,” Ryding said in an interview with Bloomberg Television. “The question is, is it recession or is it something worse than recession?”

U.S. stocks posted the biggest weekly decline in three months after American International Group Inc. reported a $61.7 billion loss and billionaire investor Warren Buffett said the economy is in “shambles.” …

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Opinion from News Donkey: Obama recently held a White House summit to facilitate progress on the important issue of health care. An underlying pillar of health care is the economy, which is in a state of major distress that is only going to get worse unless Geithner and the US Treasury Department take swift action. However, Geithner is virtually working alone right now. For a nation with the extensive resources of the United States, we really ought to be able to do better than this. Obama may want to hold a summit to facilitate vetting and confirmation for all the Treasury Department positions. It is alarming that of 15 key positions only one has been filled, despite the fact that it has been over four months since the presidential election. One might have thought priority attention would have been given by Obama’s transition team to staffing for the Treasury. Past administrations may not have filled positions for the Treasury any faster, but then they did not face such huge economic challenges either. Health care is an important issue, but the economy is truly an emergency and needs to be more than just a high priority issue along side other issues. Fielding an incomplete team to tackle our huge economic problems is not putting forth our best foot. Washington needs to spend less time worrying about distractions like Rush Limbaugh and instead work non-stop on solving our economic problems.

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Vote of No Confidence?

What’s to Blame for Wallstreet Meltdown?

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Are President Obama’s policies to blame for Wallstreet meltdown?

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Both Parties Play the Blame Game for Economic Woes

By LAURIE KELLMAN | Associated Press

WASHINGTON – Sen. John McCain deployed heavy sarcasm. Fellow Republican Marsha Blackburn trotted out a chart. A group of conservative House Republicans mocked: “‘Deficit we inherited?’ … Spare us the false outrage.” The war between Republicans and Democrats to frame the blame for the economy erupted in earnest this week.

Republicans pushed back against President Barack Obama’s claim — echoed relentlessly by his Cabinet members and Democrats in Congress — that he didn’t cause the mess and shouldn’t be judged yet on obligating taxpayers for a trillion dollars trying to fix it.

Just how long Democrats can credibly argue that they’re merely responding to — and not responsible for — a crisis created under Republican predecessors depends on which political and economic fortune tellers are doing the predicting.

“Not for too much longer,” says Stanley Renshon, a professor of political psychology at the City University of New York. “People are distracted by the sideshow only for so long, especially when the evidence is all around them. Every day brings a new cash infusion for a new industry, and the stocks drop.” …

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Related News: Hopes of Bipartisanship Have Faded

U.S. Mortgage-Modification Rules to Require Proof of `Financial Hardship’

By Robert Schmidt and Dawn Kopecki | Bloomberg.com

March 4 (Bloomberg) — The Obama administration set loan modification guidelines for its $75 billion homeowner rescue plan, agreeing to pay lenders for altering troubled mortgages while reducing borrowers’ interest rates as low as 2 percent.

The initiative, first announced on Feb. 18, would require applicants for loan modifications to fully document their income with pay stubs and tax returns, and sign an affidavit attesting to “financial hardship,” according to documents released by the U.S. Treasury in Washington today. The second, larger part of the plan relies on government-run Fannie Mae and Freddie Mac to refinance loans.

President Barack Obama’s initial proposal, the biggest federal foray into real estate since the Great Depression, ignited criticism from Republican lawmakers that the government would end up subsidizing homeowners who are financially capable of surviving the economic slump on their own.

“This plan will help make home ownership more affordable for 9 million American families and in doing so, help to stop the damaging impact that declining home prices have on all Americans,” Treasury Secretary Timothy Geithner said today in a statement.

Obama is seeking to curb a jump in foreclosures that, along with a drop in consumer credit, is lowering property values, dragging down the economy and keeping prospective homebuyers away. The housing market lost $3.3 trillion in value last year, and almost one in six owners with mortgages owed more than their homes were worth, according to a report last month by Zillow.com …

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More Fact-Checking of Obama’s Speech

The president gets facts wrong about oil imports, mortgage aid and the transcontinental railroad, and more.

FactCheck.org

President Obama’s first speech to a joint session of Congress was stuffed with signals about the new direction his budget will take and meant-to-be reassuring words about the economy. But it was also peppered with exaggerations and factual misstatements.

He said “we import more oil today than ever before.” That’s untrue. Imports peaked in 2005 and are substantially lower today.

He claimed his mortgage aid plan would help “responsible” buyers but not those who borrowed beyond their means. But even prominent defenders of the program including Fed Chairman Bernanke and FDIC chief Bair concede foolish borrowers will be aided, too.

He said the high cost of health care “causes a bankruptcy in America every 30 seconds.” That’s at least double the true figure.

He flubbed two facts about American history. The U.S. did not invent the automobile, and the transcontinental railroad was not completed until years after the Civil War, not during it.

He claimed that his stimulus plan “prevented the layoffs” of 57 police officers in Minneapolis. In fact, it’s far more complicated than that, and other factors are also helping to save police jobs.

The president also repeated some strained claims we’ve critiqued before …

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Related News: FACT CHECK: Obama’s Words on Home Aid Ring Hollow

Obama’s Proposes Up to $750 Billion More for Bank Aid

By Roger Runningen and Brian Faler | Bloomberg.com

Feb. 26 (Bloomberg) — President Barack Obama’s first budget request would provide as much as $750 billion in new aid to the financial industry, as well as overhaul the U.S. health-care system and launch a program to cut carbon-dioxide emissions.

The spending blueprint, being sent to Congress today, anticipates the government will run a deficit totaling $1.75 trillion in the year ending Sept. 30, equivalent to about 12 percent of the nation’s gross domestic product. Obama has promised to cut the shortfall — the biggest since World War II – - in half by the end of his first term.

“It’s only by restoring fiscal discipline” that the U.S. can produce growth and prosperity “over the long run,” Obama said during remarks this morning. “That means cutting what we don’t need” to pay for necessary programs.

Obama pledged that his administration will “go through our books page by page, line by line” to cut wasteful or inefficient spending, and said officials have already found $2 trillion in deficit reduction …

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59% Still Believe Government Is the Problem

Rasmussen Reports

In early October, as the meltdown of the financial industry gained momentum following the collapse of Lehman Brothers, a Rasmussen Reports national telephone survey found that 59% of U.S. voters agreed with Ronald Reagan that “government is not the solution to our problem; government is the problem.”

Since then, the stock market has fallen roughly 3,000 points, millions of jobs have been lost, nearly a trillion dollars has been spent so far to bail out the financial industry, an additional $787-billion government stimulus package has been approved, and a new president has taken office who has proposed spending billions and billions more.

Despite all that, a new Rasmussen Reports telephone survey shows that the basic views of the American people have not change: 59% of voters still agree with Reagan’s inaugural address statement. Only 28% disagree, and 14% are not sure.

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Rasmussen Polls Shed Light on Reactions to U.S. Economic Intiatives

Rasmussen Reports

54% Say ‘No’ To All Bailouts

55% Say Government Mortgage Help Rewards Bad Behavior

Confidence in Stimulus Plan Drops Over Past Week

Are We Through the Worst of It?

FoxNews Business

Leuthold Group Chairman Steve Leuthold on the market’s downward spiral

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Greenspan: Fix System Before Stimulus

By EAMON JAVERS | Politico

NEW YORK – The famously inscrutable Alan Greenspan used some uncharacteristically candid language to describe the dire plight of the American economy Tuesday night.

“Since the collapse of Lehman Brothers in September, we have been exposed to the most rapid and unremitting set of gloomy statistics that I have ever seen,” the former Fed chairman said at the 401st meeting of the Economic Club of New York.

And later, during a brief question-and-answer session at the New York Hilton, he branded the current economic morass a “once-in-a-century type event.”

As for the current debate in Washington over spending versus tax cuts, Greenspan said he has “little to add” about the question of government stimulus spending, but he asserted the government must fix the financial system as a whole before delivering stimulus spending and tax cuts …

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