Just got the following Breaking News email from CNN:
U.S. unemployment rose by 598,000 to 7.6 per cent in January, Labor Dept. reports, the worst monthly job loss since 1974.
Update: Including the newest figures, the U.S. economy has lost 3.6 million jobs since the recession began in December 2007.
This story in the Washington Post is unbelievable. If this had happened in the private sector, people would have been fired immediately.
This exchange really captures the severity of it all:
“Isn’t that a terrible way to look after the taxpayers’ money and to make purchases anywhere?” Sen. Richard C. Shelby (R-Ala.), ranking member on the Senate Banking Committee, said at a hearing on oversight of the bailout.
Warren replied, “Senator, Treasury simply did not do what it said it was doing.”
“In other words, they misled the Congress, did they not?” said a visibly flustered Shelby.
When a Republican senator is openly accusing the Bush Treasury Department of misleading Congress, you know it’s bad.
The United States is in a recession:
NBER Makes It Official: Recession Started in December 2007
Official recession watchers at the NBER said today that the U.S. is recession, and it began in December 2007. Here is the text of their statement.
The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on Friday, November 28. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months.
The American Journalism Review has this sad story about local newspapers who are shutting down their DC bureaus as part of their cost-cutting efforts.
Peter Orszag, Barack Obama’s nominee to be director of the Office of Management and Budget, has given up his duties blogging for his old job as director of the Congressional Budget Office. The CBO blog will continue under acting director Robert Sunshine.
Here’s hoping that Orszag continues his blogging at the White House.
If Mitt Romney is the Republican presidential nominee in 2012, this New York Times op ed he wrote pretty much guarantees he’ll lose Michigan.
I don’t know what’s worse, the CEOs of the three American car companies going to request a multibillion dollar bailout on Capitol Hill while flying on private corporate jets to travel to Washington, or Sarah Palin giving an interview after pardoning a Thanksgiving turkey while other turkeys are being slaughtered behind her.
If the daily campaign narrative weren’t dominated by silly stories to fight and win the daily spin war, this story would be getting a lot more attention.
ISLAMABAD, Pakistan — President Asif Ali Zardari returned from China late Friday without a commitment for hard cash needed to shore up Pakistan’s crumbling economy, leaving him with the politically unpopular prospect of having to ask the International Monetary Fund for help.
Pakistan was seeking the aid from China, an important ally, as it faces the possibility of defaulting on its current account payments. With the United States and other nations preoccupied with a financial crisis, and Saudi Arabia, another traditional ally, refusing to offer concessions on oil, China was seen as the last port of call before the I.M.F.
Accepting a rescue package from the I.M.F. would be seen as a humiliating step for Mr. Zardari’s government, which took office earlier this year. An I.M.F.-backed plan would require the government to cut spending and raise taxes, among other measures, which could hurt the poor, officials said.
The Bush administration is concerned that Pakistan’s economic meltdown will provide an opportunity for Islamic militants to capitalize on rising poverty and frustration.
The Pakistanis have not been shy in exploiting the terrorist threat as way of trying to win financial support, a senior official at the I.M.F. said. But because of the dire global financial situation, and the reluctance of donor nations to provide money without strict economic reforms by Pakistan, the terrorist argument has not been fully persuasive, he said.
“A selling point to us even has been, if the economy really collapses this is going to mean civil strife, and strikes, and put the war on terror in jeopardy,” said the official, who declined to be identified because he was not authorized to speak to the news media. “They are saying, ‘We are a strategic country, the world needs to come to our aid.’ ”
People focus too much on the terrorist argument, which although serious, pales in comparison to the nuclear weapons issue. It may be politically unpopular to go to the IMF but Pakistan realistically has no good options at this point. Normally Washington would probably bail them out but given the domestic economic problems, they can’t do that now without stirring a huge domestic political argument on the eve of a presidential election that the incumbent party is on course to lose.
If the Pakistani state collapses because of the economic situation, it will probably be the next president’s first foreign policy crisis. And at or near the top of that crisis will be what to do about Pakistan’s nuclear arsenal. They are under the control of the military, which is one of the most powerful political constituencies in the country. But if their paychecks stop coming in, my guess is all bets are off.
Although his specialty is national security affairs and terrorism, the New Yorker’s Steve Coll has written two blog entries about the current state of the global economy, with extensive reference to historical analogies to make his points about where we are right now.
One is about the impact of the economy on the next president’s national security agenda. The other is a history of market panics going back to the Great Depression.
Both are must-reads.
Icepicks and Nukes 