Saturday, December 06, 2008

The Great Recession

Officials finally admit the U.S. is in recession--and has been for a year (talk about a lagging indicator.) Then Friday's job report was a thunderbolt: not only a loss of 533,000 jobs in November and other terrible numbers for the month, but figures for the previous few months revised to show hundreds of thousands of more jobs lost than admitted before.

Together with the grim and grinchy financial sector (though on the unemployment news, the stock market naturally went up), this adds up to something economists and squawking heads don't have a name for--worse than a regular recession, not quite the Depression. So I'm calling it the Great Recession for now.

At least it focused some congressional minds on saving the U.S. auto industry from contributing several million more unemployed. Bridge loans are in the works--if not yet bridges to better companies, at least bridges to the Obama administration and a Congress that can get something more lasting done.

Meanwhile, the Obama transition seems focused on the next round of Cabinet appointments, rumored to be Environment, Energy, Agriculture and Interior. With announcements due perhaps Monday, what's interesting is both the complete mystery about who will be appointed, and (maybe not coincidentally) the lack of big (or at least well-known) names. About the only one with any sizzle is Kathleen Sebelius, and she's mentioned as a possibility for Energy or Agriculture, or Something.

Absent now from the speculated possibilities for EPA is Robert Kennedy, Jr., who took himself out of the running for Hillary's New York Senate seat. Possibly because cousin Caroline Kennedy is interested.

Well, I'd really like to see Robert Kennedy at EPA or Energy. These appointments are opportunities to go left of center, for better balance overall. There needs to be an Asian at cabinet level, too, if at all possible. At least VPE Joe Biden picked a notorious liberal economist for his economics advisor: Jared Bernstein. But with so little to go on, speculation is pointless. And even more important, no fun.

Friday, December 05, 2008

The World According to Zakaria (and other matters)

When I commented on Obama's foreign policy appointments, among others, over at Dreaming Up Daily, I forgot to mention this Newsweek article by Fareed Zakaria, which takes a broad look at America's place in the world and Obama's considerable foreign policy challenges. It's well worth reading it all, but here at least is his conclusion:

"President-elect Obama has powers of his own, too. I will not exaggerate the importance of a single personality, but Obama has become a global symbol like none I can recall in my lifetime. Were he to go to Tehran, for example, he would probably draw a crowd of millions, far larger than any mullah could dream of. Were his administration to demonstrate in its day-to-day conduct a genuine understanding of other countries' perspectives and an empathy for the aspirations of people around the world, it could change America's reputation in lasting ways.

This is a rare moment in history. A more responsive America, better attuned to the rest of the world, could help create a new set of ideas and institutions—an architecture of peace for the 21st century that would bring stability, prosperity and dignity to the lives of billions of people. Ten years from now, the world will have moved on; the rising powers will have become unwilling to accept an agenda conceived in Washington or London or Brussels. But at this time and for this man, there is a unique opportunity to use American power to reshape the world. This is his moment. He should seize it."

Meanwhile, Rachel Maddow is crusading on behalf of the auto companies versus the banks, on the basis of class bias, and she may be having some effect. After mentioning it on one show, showcasing it on another, some Senators were noticeably noting the discrepancy between the hundreds of billions in blank checks to the banks, and the fuss over a fraction of that for auto manufacturers. Senator Chris Dodd was like a wild man.

One irony is that money went to the banks so they would lend it out but they aren't doing that--and because they aren't lending to businesses, let alone consumers, some 40% fewer people are buying cars, creating the need for the Big Three to beg for loans from the federal government.

Late Thursday, ABC was reporting that congressional Dems sent a letter to the Bushites telling them they'd better carve out some chump change for the auto companies from the $700 billion bailout fund. Or General Motors could be gone before Obama gets to the White House.

Economist Paul Krugman has been using the word "scared" lately when confronted with economic prospects. He's especially worried about the unemployment numbers, that we could be losing a half million jobs a month. The first test will be Friday's monthly employment report. You may know the numbers by the time you read this--how close to 450,000 are they? We could hope he's been studying the Great Depression a little too closely.

Update: Seems Krugman was a bit conservative. Official job loss (so it's more that this) was 533,000 in November.