The Working Stiffed

Here’s what the administration’s “recovery” looks like.

1. From the U.S. Department of Labor’s Unemployment Insurance Weekly Claims Report, issued on August 26, 2010:

“In the week ending Aug. 21, the advance figure for seasonally adjusted initial claims was 473,000, a decrease of 31,000 from the previous week’s revised figure of 504,000. The 4-week moving average was 486,750, an increase of 3,250 from the previous week’s revised average of 423,500.” –

[Even though the report is fudged, it’s still a cause for alarm. The “recovery” being touted by Obama, Bernanke and Geithner is all smoke and mirrors – and that’s about as diplomatic as we can get. The “decrease of 31,000” is supposed to sound promising but the actual meaning is that there were “only” 473,000 new claimants last week, as opposed to the 504,000 new claimants the week before. And that “4-week moving average” of 486,750? That means that 1,947,000 newly qualified jobless were added to the unemployment rolls over the last four weeks.

How many were actually laid off last week, and have yet to qualify for unemployment benefits, is anybody’s guess. Another half million, maybe? Ask them how they feel about the “recovery”.]

2. From The Boston Globe (August 21, 2010) – “Many using 401(k)s as a safety net – Tapped-out workers tapping retirement funds, Fidelity says.

“American workers, many in their prime earning years, are raiding their retirement savings in record numbers to stave off eviction or foreclosure, pay for college, or buy a home.

“The number of people who took early withdrawals from their retirement accounts jumped 38 percent in the three months ending in June, according to Fidelity Investments in Boston, one of the world’s largest retirement plan administrators. During the second quarter of this year, 62,000 plan participants took out so-called hardship withdrawals, up from 45,000 in the previous quarter …

“Even more telling, the number of people taking loans from the 401(k) is at a 10-year high, according to the investment firm. Of the 11 million people with retirement funds analyzed by Fidelity, 22 percent had loans outstanding.

“‘The economy is really forcing people to perhaps look to other sources tp help supplement their reduced household income or the fact that they have less take-home pay,’ said Beth McHugh, vice president of market insights at Fidelity.”-

[Ask that 22 percent how they feel about the “recovery”.]

3. From The Boston Globe (August 21, 2010) – “US mortgage relief program falling short of goal.

“The Obama administration’s mortgage relief program, originally intended to shield 3 million households from foreclosure, now looks as if it will permanently help about one-sixth of that number. While millions say they need help avoiding foreclosure and many struggling households applied, data released yesterday showed the dropout rate from the Making Home Affordable Program was high: 96,000 trial modifications were cancelled by lenders in July. The number of cancelled trials now exceeds 616,000.” –

4. From AP (August 21, 2010) – “Regulators shut down big Chicago bank, 7 others.

“WASHINGTON (AP) – Regulators on Friday shut down a big community bank based in Chicago that has been known for its social activism but racked by financial troubles in recent months …

“The Federal Deposit Insurance Corp. took over ShoreBank, with $ 2.16 billion in assets and $ 1.54 billion in deposits. Urban Partnership Bank, the newly chartered financial institution, agreed to assume ShoreBank’s deposits and nearly all its assets. The FDIC also seized seven other banks Friday, bringing to 118 the number of U.S. bank failures this year amid the recession and mounting loan defaults.” –

5. From The New York Times – “Policy Options Dwindle as Economic Fears Grow”, By Peter S. Goodman, August 29, 2010.

“The American economy is once again tilting toward danger. Despite an aggressive regimen of treatments from the conventional to the exotic – more than $ 800 billion in federal spending, and trillions of dollars worth of credit from the Federal Reserve – fears of a second recession are growing, along with worries that the country may face several more years of lean prospects.

“On Friday, Ben Bernanke, chairman of the Fed, speaking in measured tones of a man whose word choices can cause billions of dollars to move, acknowledged that the economy was weaker than hoped, while promising to consider new policies to invigorate it, should conditions worsen.” –

[A great “recovery”, right? Ben Bernanke likes to be known as “an expert on the Great Depression”, even though everything he’s learned about it is hearsay. He wasn’t around in the 1930s. He should go back and re-read those books that enabled him to become an “expert”, and by connecting some dots he’d see that, for those who were living through those down years, unemployment – joblessness – was all that mattered. Stocks, bonds, Wall Street, “aggressive regimens” taken by the so-called Fed – none of those terms meant a thing to Americans in the 1930s. Getting a job was all they cared about. “Conventional and exotic moves” didn’t work back then and they won’t work now. What did work back then, and will surely work now, is the type of Emergency Shipbuilding Program that FDR instituted. There is no other way to create the millions of jobs needed.]