Hoyer highlights economy, war at pen and pad

House Majority Leader Steny Hoyer met with the media this afternoon to discuss recent House proceedings at his regular “pen and pad” briefing.

Topics covered during the briefing were wide-spanning, ranging from the highly debated Colombia free trade agreement, to what the House is doing to improve the sagging American economy. Hoyer mentioned the effects the “significant” testimonies of General Petreaus and U.S. Ambassador to Iraq Ryan Crocker had on Capitol Hill, and emphasized that Congress is doing everything in their power to help fix our country’s financial woes.

Hoyer talked about how he found it imperative we improve our military readiness, should catastrophe arise. When questioned about a second stimulus package, the Majority Leader noted that he did not want to see one passed that was not properly financed.

Clinton, Obama echo one another on issues

Senators Hillary Clinton (D-NY) and Barack Obama (D-IL) spoke to a crowd of largely CWA members to thunderous applause and multiple standing ovations about their plans as potential presidents of the United States on issues that ranged from labor unions and health care to broadband internet and green energy, from the mortgage crisis and the looming recession to NAFTA and the pending Colombia trade agreement.

Both democratic nominees expressed solidarity with union members and criticized the current Bush administration for their lack of support for the labor movement. Clinton allied herself with union workers as the “underdogs,” who kept persevering despite being told to back down. Clinton said she planned to make the Employee Free Trade Act “the law of the land.” Both candidates called for an end to privatization and outsourcing of American jobs, and Clinton promised to end tax breaks and subsidies to oil companies if elected. Obama pledged to invest $150 billion over ten years in green technology and new jobs that cannot be outsourced.

Both candidates advocated making high-speed internet available to all Americans to enable them to compete within the global economy. They also opposed Pres. Bush’s attempt to secure a trade agreement for Colombia, urging Congress to oppose the deal and call for an end to Colombian violence before negotiations are made. Clinton called herself the only candidate with a specific plan about how to fix NAFTA, and also said that Obama has no plan for universal health care. Obama said he opposes NAFTA, that he is the only candidate who will help middle-class families, and acknowledged that although he and Clinton have run a “fierce campaign,” no one can afford another four years of Bush policy. He called for an end to fighting in Iraq, and a new fight for American infrastructure.

Both candidates also compared Sen. McCain to Bush and said that McCain would worsen the damage caused by the Bush administration. Clinton said that if McCain received a 3 a.m. phone call with an economic crisis at hand, he would let it continue to ring. Obama criticized excessive war spending as wasteful, negated a 100 year occupation in Iraq alluding to a comment made by McCain, and urged America to say no to a metaphorical Bush third term.

"What, me worry?"

By Ellen Ratner

Next to George Washington and Abraham Lincoln, probably the next most familiar face in America is that of Mad Magazine's Alfred E. Newman. His one liner, "What, me worry?" became famous at a time when the Cold War threatened to go hot, and most people were worried about a 20-megaton Soviet hydrogen bomb coming soon to a city near them. Thus, "What, me worry? was the ultimate parody of the 1950s and 60s: Nuclear war? "What, me worry?" An African-American couldn't get a cup of coffee at a Woolworth's lunch counter? "What, me worry?" Prescribe thalidomide for morning sickness? "What, me worry?"

Although Alfred never went away, "What, me worry?" has an encore engagement in the same theater as the last time – Washington, D.C. You can boil down the elaborate reassurances to one phrase: "What, me worry?" Secretary Henry Paulson on the subprime mortgage collapse: "What, me worry?" George Bush on the imminent recession: "What, me worry?" Fed Chairman Ben Bernacke on "Honey, I shrunk the dollar": "What, me worry?" In fact, whether it's the looming bankruptcy of the American airline industry, a conviction in the bond market that inflation is the main enemy, gold at $1,000 per ounce or oil at $110 per barrel, Washington is like an aviary, chirping away with "What, me worry?" The fact that tens of millions of Americans are already suffering, or are terrified at the prospect of economic decline doesn't seem to have occurred to anybody.

Our economy is beset by malignant cancer, and it's as if bland, stupid reassurances are somehow a substitute for an honest diagnosis and a tough-love cure. This country has traveled so far from a culture of candor that today, we would probably dismiss FDR's famous "Fireside Chats" as scaremongering. Think of today's phrases: Assurances that "the fundamental underpinnings of the financial system are sound," that economic disaster is really no more than a "bump in the road," that the declining dollar is really "good" for us, (translation: good for the National Association of Manufacturers) and that a caring political class is sending in the cavalry in the form of a $600 rebate (a powerful stimulus indeed – in the year 1850).

However, in between the bromides, palliatives and political Prozac, a few disturbing facts can still pierce one's skull. Try these: This week we learned that in the next two years there could be as many as 3.3 million new home foreclosures. You can add to that the 1.3 million homes in foreclosure in 2007 (nearly double the 2006 rate). You do the math: With an adult population of approximately 220 million and a 65 to 69 percent home ownership rate, more than 6 million adults may be losing their homes. Six million adults, and who knows how many children? And people wonder why Barack Obama, thought by some as the most liberal U.S. senator, is so popular.



Congress and White House plans for dealing with this amount to little more than, "What, me worry?" While some Democrats want to give $400 billion to help people stay in their homes, most others – and Republicans, of course – shout about a "government giveaway" and the old "lack of personal responsibility." Odd, isn't it? No one asked about personal responsibility when it came to bailing out Bear Stearns, or providing billions and billions in liquidity to financial markets in the Fed's famous, "No Fat-Cat Left Behind" program. At least when Chrysler was bailed out years ago, there were tens of thousands of manufacturing jobs at stake. What was at stake here? Goldman Sachs' investment in Collateralized Debt Obligations, or CDOs? Well, whoopy-doo!

There is more bad news coming: Credit card debt defaults and more problems with CDOs. Meanwhile, only two job sectors have shown much growth: Education and medical care. As a country, we better be able to grow more than these if we expect to compete with China, India, the EU and Russia.

Instead of "What, me worry?" the real question is "What the hell should we do?" What can we do? First, we need a little candor. There are no good options available right now. The U.S. government must act now to prevent the housing/mortgage crises from going into a free fall. It must address the credit problem both individual and business levels. And it must do these things with the same fervor that FDR brought to the early years of his administration. No, we are not –yet – in a depression. But we must act now to avoid the possibility of one. Here are two suggestions:

Fix the crumbling infrastructure: Repair schools, roads and bridges; develop high-speed trains, national fiber-optic and Internet systems. This puts government money in the hands of working people and those who employ them.

Create an NRA program for real "green-collar" jobs. We've got the brains and brawn to address global warming and create products that can be exported. Just like steel, automobiles and railroads were to 20th century, so green technology, nuclear power and climate healthy production and consumption processes will be to the 21st century. And we've got an edge here because the early development economies like China, India and Russia aren't paying sufficient attention.

Talk is cheap. Suffering is real. And "What, me worry?" is a lie.

80,000 jobs lost in March

Keith Hall, the commissioner of the Bureau of Labor Statistics testified before the Joint Economic Committee on the March employment statistics. He reported that employers across all sectors of the labor market cut payroll by 80,000 in the month of March. This has cause the unemployment rate to rise from 4.8 percent to 5.1 percent in the first quarter. The total decline in the last quarter was 232,000 jobs. In his opening statement Hall said, "I would note that the labor market conditions started to weaken more than a year ago." He later added that 68,000 of lost jobs are in hosing-related industries.

There were only three members present. Sen. Charles Schumer (D-NY), Sen. Sam Brownback (R-KS), and Rep. Baron Hill (D-IN) who acted as chairman. Schumer only stayed to make an opening statement saying that these numbers should serve "as a wake up call" to the Bush administration. In the questions both Brownback and Hill asked Hall to forecast the next quarter and comment on the policy context of the recent data. Hall repeatedly refused to project data or give an opinion on policy, saying that the numbers should speak for themselves. He refused to define the economy or the labor market as in a recession.



Construction jobs were the hardest hit, loosing 51,000 jobs in March. Since peak employment in September 2006, total construction employment is down by 394,000 jobs. Another sector that has decreased was manufacturing. Manufacturing jobs decreased by 48,000 and automobile manufacturing took half of those losses. In his written statement Hall reported, "The number of unemployed persons who were job losers continued to trend up. Job losers represented 54 percent of all unemployed persons in March, up from 48 percent 12 months earlier." 5,000 jobs were lost in the financial activities sector, which is normally considered a growth category.

Hall reported that the only sectors to add jobs were education and health care. In these sectors combined 42,000 jobs were gained. He said that overall this indicated that consumer spending was weak, making companies less likely to hire temps. He said that the labor market figures are consistent in what he described as "the general weakening of the country."

Chairman Ben Bernanke explains why the Fed "bailed out" Bear Stearns

Chairman of the Federal Reserve System Board of Governors Ben Bernanke testified at the Joint Economic Committee Hearing on "The Economic Outlook," attempting to explain to the committee why the Federal Government moved to save Bear Stearns from compete failure but is doing nearly nothing to save homeowners from foreclosures. "Normally," Bernanke said, "the market sorts out which companies survive and which fail, and that is as it should be. However, the issues raised here extended well beyond the fate of one company… with financial conditions fragile, the sudden failure of Bear Stearns likely would have led to a chaotic unwinding of positions in those markets and could have severely shaken confidence."

In his opening statement, Chairman Charles E. Schumer (D-NY) said it was "hard to disagree" with a need to take quick action to avoid the kind of meltdown as seen in the Great Depression, but wanted to know what justice there was in helping Bear Stearns and not millions of homeowners. He compared the actions taken by the Federal Reserve to moving at "a snail's pace, if at all." There are six principles to moving forward, Schumer said, and above all, the focus should be on controlling systemic risk. The regulatory system should be unified and simplified, the unregulated parts of the financial markets should be regulated, there must be greater transparency, and the "Laissez-faire view of this administration" in regards to "no regulation is good," needs to end.

Congresswoman Carolyn Maloney (D-NY) stressed the need for a bipartisan economic summit and said that there was a need to move quickly to "keep families in their homes and blunt the devastating effects of the weakening economy." She compared the Fed's creative, unprecedented, and controversial steps to ease the credit crunch to "the spontaneous improvisation of jazz." Wall Street has been helped, she said, and now it is time to help Main Street.

With a slightly trembling voice that belied his calm demeanor and instead evidenced his nervousness at appearing before the Committee, Bernanke said that although recent actions appear to have helped stabilize the situation somewhat, the financial markets remain under "considerable stress." Effects of the financial strains on credit cost have been increasingly evident, he said, and some portions of the system that had previously escaped the worst of the turmoil have been affected. "These developments in financial markets-- which themselves reflect, in part, greater concerns about housing and the economic outlook more generally-- have weighed on real economic activity," Bernanke said.

He said he expects the tax rebates to provide support to consumer spending, and also that he expects economic activity to strengthen in the second half of the year. Inflation, though, has been a source of concern. The pickup in inflation has been the result of increases in price of crude oil, agricultural products, and other globally traded commodities, Bernanke said. In addition, the decline in the foreign exchange value of the dollar has also contributed to inflation. "We expect inflation to moderate in coming quarters," he said, explaining that the expectation is based in part on futures markets' indications of a leveling out of prices for oil and other commodities. Clearly, he said, the U.S. economy is going through a very difficult period. Much financial adjustment has already taken place, and he said he remains confident in our economy's long-term prospects.