Here are some other news items making the rounds today.
The White House is announcing that Christina D. Romer, the chairwoman of the White House Council of Economic Advisers, will step down from the post next month. Ms. Romer is to return to California and her post as a professor at the University of California at Berkeley. The move seems more personal than a departure over policy differences. Ms. Romer has a son entering his freshman year of high school. The New York Times has more.
The Hill interviews California Congressman Henry Waxman, the chairman of the Energy and Commerce Committee. Waxman, looking on the sunny side of the street as the Democrats face an tough electoral environment, believes the November elections will likely weed out some of the “most difficult Democrats” that leadership lawmakers have dealt with this Congress.
Mother Jones has an important article looking at how the Federal housing agencies—and some of the biggest bailed-out banks—are helping shady lawyers make millions by pushing families out of their homes.
Brian Beutler has an update over at Talking Points Memo on the infighting amongst the members of the White House's National Commission on Fiscal Responsibility and Reform. Beulter writes that "a source familiar with the proceedings of the working group on discretionary spending tells TPM that some commissioners, including one military contractor, would prefer to save money by freezing military pay and scaling back benefits, rather than by eliminating waste in defense contracting.
The editorial of the day is from the Denver Post. Entitled GOP's Big Tent is a Real Circus, the editorial board writes that the "Republicans are without a credible candidate in the governor's race - but one candidate is even less credible than the other" adding that Dan Maes' "grand bike conspiracy, however, takes the cake. This man must not be governor." Meanwhile Business Week reports that Dan Maes told the Denver Petroleum Club he would cut at least 2,000 workers "just like that" from the state budget, with projected savings of $200 million as well as force a showdown with the Federal government over drilling for gas and oil.
I'll never quite understand why in the early days of the Obama Administration, the economic team was so insistent that the unemployment rate would not climb much above 8 percent when the economy was shedding jobs by the hundreds of thousands monthly. It is somewhat reassuring now, admittedly belated, that Christina Romer, the chair of the White House Council of Economic Advisers, is more candid about the bleak prospects for the US labor market. From the New York Times:
"Unemployment is likely to remain at its severely elevated level" through the end of next year, predicted Christina Romer, chairwoman of the White House Council of Economic Advisers, at a hearing of the Joint Economic Committee of Congress.
Ms. Romer said she agreed with private sector forecasters who expected that the economy would expand at a moderate pace through the end of next year as it slowly recovered from its deep recession.
But she cautioned that unemployment usually recovered much more slowly than economic growth, and that the job creation had to make up for a great deal of lost ground from the last two years.
And she warned that the rebound in jobs could actually be even slower than what White House officials and private forecasters had been predicting.
The US economy has lost 7.2 million jobs since the recession began 22 months ago. And while the official unemployment rate was 9.8 percent last month, the real unemployment rate, the U6, is much higher at 17 percent. The reality is that the US economy has been shedding jobs faster than the stimulus can grow new ones. An additional 263,000 jobs disappeared last month alone. The Obama Administration in the uncomfortable position of taking credit for an economy that's not as bad as it used to be but far from what it should be.
Ms. Romer notes correctly that the stimulus program put the brakes on a downward spiral in the economy, in effect preventing the economy from going off a cliff but there we remain hanging dangerously on the precipice. As Congressman Barney Frank of Massachusetts recently observed, academic economists can have a field day theorizing how the recession might have played out. But no politician ever got re-elected with a bumper sticker that said, "It Could Have Been Worse." We need a plan to make it better and soon.
The Democratic National Committee released this 30 second spot entitled The Cost of Doing Nothing. It's about time they hit back.
I managed to catch part of the President's Town Hall in Cleveland. I have couple of observations to share. I was struck by the caliber of the questions that were more detailed, nuanced and sophisticated than those asked by some professional journalists at last night's press conference. I was also pleased to hear the President make the connection between rising health costs and flatlining real wages.
Christina D. Romer, the Chair of Council of Economic Advisers, in a prepared statement (pdf) to Committee on the Budget of the U.S. House of Representatives this past June noted that "if we can genuinely restrain the growth rate of health care costs significantly, while assuring quality, affordable health care for all Americans, living standards would rise, the budget deficit would be much smaller, unemployment could fall, and labor markets would likely function more efficiently." The reality of the matter is that we can not afford to do nothing.