This week's Republican candidates debate, presented by CNN and sponsored by the Tea Party, featured a moment when Texas Gov. Rick Perry was cheered for restating his rather negative views of Federal Reserve Chairman Ben Bernanke. This is from Talking Points Memo:
[H]ost Wolf Blitzer brought up Gov. Rick Perry’s comments that Federal Reserve Chairman Ben Bernanke’s emergency economic policies “almost treasonous.” Perry stood by the comment…“I am not a fan of the current chairman allowing that Federal Reserve to be used to cover up bad fiscal policy by this administration,” Perry said. “And that, I will suggest to you, is what we have seen.”
“It is a travesty that young people in America are seeing their dollars devalued in what…we don’t know if it was political or not because of the transparency issue,” Perry said. “But I stand behind this: we need to have a Fed that’s working towards sound monetary policy, that creates a strong dollar in America, and we do not have that today.”
As the economic downturn grinds on, with really pitiful GDP growth and really high unemployment — it's 12.4 percent in L.A. county — a debate about whether the vaunted American middle class is being obliterated has gained momentum. Elizabeth Warren, now running for Senate in Massachusetts, has been hammering on this for years. So have many other left-leaning and progressive economists. Others are asking questions. Stephen Rose points out that the problem with the middle class is that there's a structural shift in the work that's available to less-educated men.
KPCC's Patt Morrison Show recently took a look at the situation, indirectly, with a segment on the "New Normal" in the economy and so-called "two tier" wage structures that have been adopted in unionized industries, most prominently the car business. UCLA's David Lewin said that the two-tier gambit, in which new workers are hired at lower wages or with less lavish benefits that older workers, can be used to establish the lower tier as the only tier, as older workers are phased out.
Greek default, French banks, and…Newport Beach? PIMCO's Mohamed El-Erian is more than a little concerned: “The light should be flashing yellow, if not red, in Washington, D.C., and hopefully the IMF meeting can be the catalyst for getting to a common analysis and setting the stage for the G-20,” El-Erian said from Pimco’s Newport Beach, California-based headquarters. (Booomberg)
The Federal Reserve of Dallas wonders why the housing boom boomed so big in the 2000s: "The most recent house price and construction run-up exceeded levels recorded during the 1990s economic expansion, when unemployment rates fell even lower and income grew faster. Why is this? Standard econometric models accounting for these factors simply cannot explain the surging house prices and building seen in the mid-2000s." (Dallas Fed)
Poverty in American isn't just on the rise — it's breaking records: "High joblessness and the weak economic recovery pushed the ranks of the poor in the U.S. to 46.2 million in 2010 -- the fourth straight increase and the largest number of people living in poverty since record-keeping began 52 years ago." (LAT)
Some politicians aren't even sure how much Kinde Durke, arrested campaign-treasurer-for-hire, made off with: “I was wiped out too, we don’t know how much,” said Sen. Dianne Feinstein, indicating the losses in campaign funds could run into hundreds of thousands, or even millions, of dollars. (Politico)
Dallas Fed does the numbers (and charts) on what everyone pretty much already knows: "No V-shaped recovery is apparent after the most recent slowdown....GDP was about 6 percent below trend in the second and third quarters of that year. Note that despite the severity of the downturn, real economic activity has not recovered at anything resembling the pace of previous recoveries."
The unemployment rate in California is far higher than the national level — 12 percent versus 9.1 percent — and that's depressing for residents of the state. But there's one other state that's doing worse: Nevada, at 12.9 percent. The temptation is to put the two states in the same boat, because there are some similarities. Both California and Nevada have been hit hard by the housing crisis, which has created a kind of vast corridor of jobless construction workers between Los Angeles and Las Vegas. But California has the eighth largest economy in the world (if states could be compared with countries, which they can't), at $1.9 trillion. Nevada, by contrast, is around $130 billion.
So the idea that California and Nevada can be subjected to an apples-to-apples comparison just because they sit atop the high-unemployment tally is sort of ridiculous. Nevada may have Vegas and gold mining, but California has Hollywood and Silicon Valley. Besides have a much larger economy, California has a much more diverse and innovative economy. The housing collapse is something that Nevada may never recover from. In California's case, it could just take a while.