Shocking Unemployment Numbers Out Today
The Bureau of Labor Statistics reports a shocking rise in unemployment in February to 8.1% and a loss of 651,000 jobs. Not only are the numbers large but the rate of job loss is sharply increasing each month. President Barack Obama is reported to have called the losses "astounding" and said the figures proved that Washington "did the right thing" by passing the historic $787 billion economic stimulus plan last month. And Lawrence Mishel, president of the Economic Policy Institute. said, "This is wahat falling off a cliff looks like."
In a recent NY Times Op Ed (before the latest statistics)Paul Krugman cites a recent interview in which Tim Geithner, the Treasury secretary, tried to make a distinction between the “basic inherent economic value” of troubled assets and the “artificially depressed value” that those assets command right now. In recent transactions, even AAA-rated mortgage-backed securities have sold for less than 40 cents on the dollar, but Mr. Geithner seems to think they’re worth much, much more.
And the government’s job, he declared, is to “provide the financing to help get those markets working,” pushing the price of toxic waste up to where it ought to be." Krugman disagrees completely: The truth is that the Bernanke-Geithner plan — the plan the administration keeps floating, in slightly different versions — isn’t going to fly.
The economic stimulus plan was absolutely necessary, even if it is only a down-payment on what is needed. But when it comes to dealing with the financial crisis things the Administration appears to be dangerously behind the curve to put it politely.