Retirement plans don't work

Rep. George Miller (D-Calif.) said that the current "go-go, wild west style approach to governing" is severely affecting citizens' retirement security.

In a hearing held by the House Education and Labor Committee, Miller said, "63 percent of Americans are worried that they will not have enough savings for retirement." He continued, "one in five middle-aged workers stopped giving funds to their retirement plans in the last year." In addition, he said $500 billion has been lost from current 401(k) plans in the last year.

Director of the Congressional Budget Office Dr. Peter Orszag said that the current economic crisis is affecting state and local pensions as well. He said $300 billion were lost from those pension between the second quarter of 2007 and the second quarter of 2008. He said workers are taking "unnecessary risk" in that 90 percent have 401(k) plans in their own company's stock. He said workers need to be given "a strategy of diversification."

Research Director of the Employee Benefit Research Institute Jack VanDerhei said there are "fundamental flaws" in our current retirement plans. He said that the last few weeks have proven that even large companies can go bankrupt and retirement plans are always at risk. He added that he hopes workers don't "overreact" to the economic downturn and continue to contribute money to their retirement plan.

Rep. Yvette Clark (D-N.Y.) said that the public is "in a state of shock." "We're in the midst of a reorganization of the financial system," said Clarke in reaction to the failing economic system.

New direction for world economy

To meet advances in world interconnectivity, World Bank Group President Robert B. Zoelick said that multilateralism must be updated for the 21st century.

"Our's must be a globalization where both the opportunities and the responsibilities are more widely shared...multilateralism, at its best, is a means for solving problems among countries, with the group at the table willing and able to take constructive action together."

Zoelick outlined requirements for the new multilateralism, explaining that it must have a shared goal of improving global political economy and should mimic the flexible nature of national economies.

According to Zoelick, a new, more cooperative, steering committee made up of finance ministers should be introduced to replace the current G7 finance ministers. Zoelick said that this steering group will be designed to adjust with international changes.

Climate change will also be a concern for the new multilateral network, with the proposed goal of reaching a "global bargain" among energy producers and consumers.

"At a minimum, such a bargain should involve sharing plans for expanding supplies, including options other than oil and gas; improving efficiency and lessening demand; assisting energy for the poor; and considering how these policies relate to carbon production and climate change policies," said Zoelick.

Congress works to stall unemployment

Rep. Carolyn Maloney (D-N.Y.) said that the United States is in "an unbearable financial situation" in a Joint Economic Committee Hearing. She said the job market has been "deteriorating" for the last year.

Bureau of Labor Statistics Commissioner Keith Hall said that jobs have been lost for nine consecutive months. According to Hall, a recession is realized after nine or 10 consecutive months of job losses. He said that the biggest job losses have been in industries such as manufacturing, retail, and construction. Hall said the U.S. currently has "a broadly weak labor market." He also said said that the many jobs that have been shipped overseas "did not return."

The September Jobs Report released today, showed that 159,000 jobs were lost this September, the highest monthly loss in five years and the unemployment rate is at 6.1 percent. The report also said that while wages have increased by 3.4 percent in the last year, inflation has increased by 5.4 percent.

Politics and bailout aren't mixing well

Former Rep. William Frenzel (R-Minn.) said the bailout plan failed to pass in Congress because of the "real struggle between the hard right and the hard left," at a discussion held by the Bookings Institute. He said there is "an extra level of animosity" between political parties, which made bills "doubly difficult" to pass.

Frenzel said that the bill will have to contain more "goodies" for it to be passed. In order to get the necessary 12-15 more votes to pass the bill, it will have to "move to the right" in order to get Republicans to vote for it next time. He was adamant the bailout would be passed because there was a small group of Congressmen that will change their vote.

Senior Fellow at the Brookings Institution Alice Rivlin said that the economy will recover when the United States "gets credit flowing again." She supported the bailout bill, saying it will "probably work." Rivlin said that if the U.S. does nothing, it could result in "a financial meltdown around the world." She added that if we can successfully rescue failing banks and companies, that there is no reason to think there is something "fundamentally wrong" with the U.S. economic system.

Professor of Entrepreneurship at MIT Simon Johnson said that while we are in a dangerous situation, the U.S. government is ahead of all other industrialized countries in economic expertise. He said that while the bailout plan is needed, we must take a comprehensive look at how this happened. He said we will "continually have problems if [the U.S.] relies on stopgap measures."

McCain advises Bush administration on next move

Following the House's rejection of the Wall Street bailout bill, Sen. John McCain described a series of steps the administration could take to aid the economy. These suggestions included increasing the insurance for bank deposits to regain lost confidence, allowing the Treasury Department to borrow money and purchase mortgage backed securities, and using the exchange stabilization funds to temporarily support financial institutions while Congress reconvenes.

"All of this is focused on making sure that in the near term our economy continues to do as well as possible, and thus not incur further damage in the credit crunch," said the McCain campaign's Senior Economic Policy Advisor Doug Holtz-Eaken during a telephone conference.

Holtz-Eaken contrasted the goal with Sen. Obama's plan which the campaign claims will endanger the economy by raising taxes on the small businesses that have been a source of new jobs despite the economic downturn and increasing spending by $3 trillion over the next decade.

"I don't know of an economic theory on the face of this earth that would suggest raising tax rates on business, raising tax rates on small business, raising tax rates on investment capital would be a good idea at a time of severe financial strain," said former Secretary of Housing and Urban Development Jack Kemp.

"We need a pro-growth stimulus to make sure we don't go into the depth of a deep recession, the likes of which would be caused by raising tax rates on investment capital at exactly the wrong time," said Kemp.