This week, Federal Reserve Board (Fed) Chair Janet Yellen testified to Congress as part of the requirements of the Humphrey-Hawkins Full Employment Act. The testimony gives Congress an opportunity to hear and assess the Fed’s thinking on economic policy.
In her assessment of the labor market, Yellen clearly stated the labor market is getting better but shows many signs of weakness.
This week, Janet Yellen made her second major speech as chair of the Federal Reserve Bank. Again, her talk as chair is fresh air compared with what is typically heard from Fed chairs. During her first speech in April in Chicago, she actually called out the names of specific unemployed workers—putting a human face on the real effects of Fed policy.
This time of year college students cram for final exams. They get graded in a very stark right-or-wrong fashion. Splitting the difference between a bad guess and the right answer is not rewarded. Unfortunately, Washington is locked in such a crazy struggle. Five years after Wall Street’s fall, the economy still is more than 1 million payroll jobs short of where things stood at the last peak of the labor market. Median household income is still below the peak, meaning more than half of America's households are behind where they were five years ago. The poverty level of America’s children is higher, and state and local revenues only recovered last fiscal year, leaving hundreds of thousands of fewer teachers and larger class sizes for our children. Our nation’s total output is more than $1 trillion less than where it would be if we could get to full employment. Clearly, the right answer to this set of problems is for massive government action to kick start the economy to address the woes of the American people.
This week, President Barack Obama delivered an address, starting a dialogue on how the long path to America’s current level of inequality has led us to the wrong place. The president said that Americans’ frustration with Washington is “rooted in the nagging sense that no matter how hard they work, the deck is stacked against them.” His timing coincided with the nationwide spread of strikes by fast-food workers, showing they cannot wait for Washington to act on raising minimum wages. Unfortunately, the day also saw the loss of Nelson Mandela, a world-class standard bearer for justice. The passing of Mandela is a time to reflect on how the world can change if people just stand up, eventually justice wins out.
The estimates have come in that the federal government shutdown cost upward of $25 billion to the economy. That is shoe one. The other shoe about to drop is from the short-term nature of the budget deal itself. This is going to set up another rocky fourth quarter for the economy.
Adults took over Washington, D.C., and now America can catch its breath after another manufactured crisis in our economy: 16 days of a federal shutdown that disrupted virtually every aspect of the economy, from small business loans to veterans’ funerals. But, what now?
In the latest polls for May and June, Congress’ approval rating is a mere 14%. This reflects a clear dissatisfaction with Congress not doing something meaningful to help American households. Highjacked by the Tea Party, the Republican-led House of Representatives does not want to use government to help people at a time America’s people need help digging out from policies that let Wall Street bankrupt the country.
This Saturday will mark the 50th anniversary of the March to Freedom down Woodward Avenue in Detroit.
Yet here we are today, an America deeply divided and fractured. If you are poor in America, you are not an American, but a Texan or a Tar Heel. Your access to health care, to quality education, to unemployment benefits all rests on the politics of your state. We are not simply divided in Washington. We are exactly where we were in 1864. We are divided in a vision of the meaning of government and of democracy.
The National Academy of Social Insurance, a Washington-based organization of academics and policymakers who are experts on Social Security and other parts of the Social Security Act, released a recent survey of what Americans think about Social Security and how to “fix” it. Their report that came out last week is very telling of why Americans feel so disconnected from Washington.
Friday's employment numbers showed a reasonable gain of 165,000 jobs added to the payroll in April. These are preliminary numbers, as today’s report also shows that the numbers for February and March have now been adjusted upward. So, there is some hope that things may be better than they appear. A separate survey also was released today, based on a survey of households, from which we learned that the overall unemployment rate edged slightly down to 7.5%.