Is The Economy Turning Around? A Little?

Wall Street is flying again-- and should soon cross has now crossed the 10,000 point mark. I'm not so sure that the success of a bunch of under-regulated gangsters and con-artists are doing well is such great news. But I was cheered this week to start looking at reports from states pointing to the job creation the Stimulus has been underwriting. Ohio reports that 13,000 full time jobs have been saved or created in the state through the federal stimulus package. The number in Wisconsin is 8,282. Nationwide jobs in education have fared best.

Public school teachers are expected to be the big winners when states reveal for the first time how many jobs were created or saved during the first months of President Obama's $787 billion stimulus plan.
State officials worked into the weekend as part of the most ambitious effort ever to calculate, in real time, the effect of a government spending program.

Whether it is 11 jobs repaving a road in Caldwell, Texas, or one job helping run Utah food banks, states must say exactly what they have done with the federal aid.

The data, to be released in two installments this month by the Recovery Accountability and Transparency Board, the independent body set up by Congress to monitor Recovery Act spending, will come amid growing political pressure on the Obama administration to prove that the stimulus spending is saving and creating jobs.

On Thursday, the board is to release data on the impact of direct spending from federal agencies. That will include jobs such as fixing military bases and national parks.

Later this month, the board is to release grant data on jobs such as construction workers hired to repair local highways using federal money-- and teachers.

Based on preliminary information obtained by the AP from a few states, teachers appear to have benefited most from the early spending.

That is because the stimulus sent billions of dollars to help stabilize state budgets, averting what officials said would have been tens of thousands of teacher layoffs.

In California, the stimulus is credited with saving or creating 62,000 jobs in public schools and state universities. Utah reported saving 2,600 teaching jobs. In both states, education jobs represent about two-thirds of the total number of jobs saved. Missouri reported saving 8,500 school jobs and Minnesota 5,900.
In Michigan, where officials said 19,500 jobs had been saved or created, three out of four are in education.

Construction companies also are expected to report strong job numbers thanks to billions of dollars in highway money, but those figures will vary by state, because some have spent the money faster than others.

We'll all be eager to see www.recovery.gov post its first comprehensive reports tomorrow. Meanwhile, though, Obama's Wall Street guy, Lawrence Summers, claimed yesterday that the administration had "helped pull the U.S. economy back from the abyss with aggressive efforts to spur growth and stabilize financial markets."

Defending policies that Republicans have attacked as ineffective, National Economic Council Director Lawrence Summers argued measures put in place by the administration, including a $787 billion stimulus package, had helped turn back the deepest U.S. recession since the Great Depression.

"Thanks largely to the Recovery Act, alongside an aggressive financial stabilization plan and a program to keep responsible homeowners in their homes, we have walked a substantial distance back from the economic abyss and are on the path toward economic recovery," Summers wrote to House Republican leader John Boehner.

Obama is facing rising clamor to take new steps to lift the economy and jump-start job growth as the U.S. unemployment rate edges toward 10 percent.

The bleak jobs picture, and soaring fiscal deficits that reflect the cost of battling the recession, could put some of Obama's Democratic allies at risk in next year's congressional elections, unless voters are convinced they are doing all they can to help the economy.

"Every American is asking this administration: Where are the jobs?" Boehner said in a statement. The Ohio Republican noted the economy had lost roughly 3 million jobs since Congress had approved the stimulus package in mid-February.

Responding to a letter Boehner had sent Obama, Summers pointed to a slowing pace of job losses as evidence that the administration's policies were working. "We have seen a substantial change in the trend of job loss," he said... Summers told Boehner that private forecasters have estimated that the stimulus program added 3 percentage points to second quarter GDP, tempering what would have been an even deeper economic swoon.

He also said they believe the unemployment rate would be 2 percentage points lower by the end of 2010 than it would have been without the stimulus plan.

Most forecasters estimate the economy resumed growth in the third quarter, although some still worry about the risk of a "double dip" recession in which the recovery stalls.

Summers took note of the improvement in U.S. stock market performance since early this year and of recent data suggesting the housing market, which was central to the financial market collapse, was stabilizing.

Hitting back at Republicans who are trying to lay blame on Obama for a record U.S. budget deficit, Summers said Obama inherited a deficit well in excess of $1 trillion when he took office. He said the policies of Obama's Republican predecessor, former President George W. Bush, led to the shortfall.

"The bipartisan commitment to fiscal discipline that existed during the 1990s evaporated during the 2000s. Every major policy enacted during this period violated the principle of paying for new proposals," Summers wrote.

Although the Wall Street contingent surrounding Obama (Summer-Emanuel-Geithner-Bernanke) would never go for it, what needs to happen now-- and, no doubt, what FDR would have done-- is to raise taxes on the wealthiest slice of society that benefited in such an unbalanced way under the Bush Regime, and then use that money to boost the Stimulus, which really was only half done on the first round.

Meanwhile, Robert Borasage of he Campaign for America's Future is worrying about the conservative jihad we'll all see tomorrow as the House Financial Services Committee starts the process of weakening Obama's consumer protection measures on behalf of their corporate paymasters. "Without strong regulation of the banks and the shadow banking system," said Borasage this morning, "large banks will feel free to gamble with the assumption that taxpayers will cover their losses. This is a recipe for another financial debacle." But instead of having elected representatives to protect us against the financial systems predators and incompetents, we have Republicans and Blue Dogs completely beholden to Wall Street, willing to impoverish their own constituents to protect their campaign financiers.

Patty has gobbled up $968,910 in thinly veiled bribes from banking sector since 2004

The banking lobby has been working the backrooms to weaken the reforms proposed by the administration. The central administration proposal – the creation of a new Consumer Financial Protection Agency to protect consumers from financial frauds and rip-offs – has already been critically compromised. Financial institutions are no longer required to offer consumers simple and plain basic mortgages and loans. The enforcement of the Community Reinvestment Act has been stripped from the CFPA. And even worse, the oversight authority of the new agency is placed in a council of the very same regulators that failed consumers completely in the run-up to the financial collapse. Rewarding their failure is simply indefensible.

The committee also seems intent on weakening rather than strengthening the current inadequate laws relating to derivatives, the exotic financial instruments that Warren Buffett termed “weapons of financial mass destruction.” This is simply abandoning the public interest to serve the private interests of the banks.

When Senate Majority Whip Richard Durbin declared that the “banks own the place,” he clearly wasn’t kidding. But legislators should beware. The banking lobby got its way when few were looking and even fewer could understand the arcane battles over deregulation.

Those days are gone. Americans have lost trillions of dollars in savings and assets because of the irresponsibility of a financial industry that turned itself into a casino, taking bets without even the prudence that a Las Vegas bookie exercises. Then they demanded hundreds of billions of taxpayers’ dollars to bail them out or they would bring down the entire global economy. Americans are livid and paying attention. Voters will hold accountable legislators who undermine the reforms we need to serve their Wall Street contributors.