Recession

President Obama, his economics team, and the Chairman of the Federal Reserve continue to display a curiously detached view of the economy.  Just the other day, the president indicated that “it took nearly a decade to dig the hole that we’re in” as if that provided an excuse for the lassitude he continues to display in regard to the problem of unemployment.

In July 2008, in a memorandum for the Obama campaign team and later published in Challenge,  I wrote as follows:

If the above analysis is correct, the political capital of the new presidency risks being depleted, quite quickly, in a series of short-term stimulus efforts that will do little more than buoy the economy for a few months each. Since they will not lead to a revival of private credit, every one of those efforts will ultimately be seen as “too little, too late” and therefore as ending in failure.

A few years ago, it seemed that more and more Americans were achieving the American dream. Between 2000 and 2007, homeownership nationally grew by 8 percent. It grew even faster for one of the nation’s fastest growing populations- the Hispanic community-increasing by 47 percent, from 4.1 million to 6.1 million, according to the U.S. Census Bureau.

For more and more Americans, the dream of a secure retirement has become increasingly threatened. The Great Recession has taken its toll on a retirement system which has been in place in the United States since WWII. Retirement was conceived as a "three-legged stool," with the three legs being Social Security, pensions and personal savings centered around homeownership.

American retirement security, even prior to the Great Recession, was in bad shape. The downturn has only exacerbated previously-existing structural problems, such as an over-reliance on home values and the troubled transition from defined-benefit to defined-contribution retirement plans, as we mentioned in a previous Talking Points article. 

We all should've started saving for retirement yesterday. We know this, yet most of us can barely keep our spending in line with our incomes. And when we try to start saving, we are either overwhelmed with options (best case scenario) or with figures that spell inevitable doom.

The promotion of the renewable energy industry is central to the Recovery Act and the Obama administration's broader economic recovery program, but it is unlikely to create enough jobs or have a large enough domestic multiplier effect to contribute significantly to the economic recovery. It reflects an ambition to transform the economy into a green energy leader of the 21st century and tackle climate change. But these investments are a questionable short- or medium-term generator of growth and jobs.

Hot on the heels of our recent event featuring Gary Rivlin and his new book about the rise of the alternative financial sector, Broke, USA, we're sponsoring another event this week at New America. Thursday, July 22nd from 10AM until 11:30AM: 

Economic Security at Risk: Introducing the First Integrated Measure of Americans’ Economic Insecurity

The financial crisis has shaken the foundations of retirement security in both the private and public sectors, and nowhere more than in California. Generous public pension promises are straining the finances of cities and counties while private sector workers have little prospect of secure retirement.  The contrast between the guaranteed and increasingly expensive pensions and retiree health benefits enjoyed by most public workers in California and the less secure (and often missing) retirement plans of private-sector workers has touched off pension envy.

The United States faces two immense challenges: prolonged unemployment and an aging population. To meet the needs of the elderly while creating jobs for low-skilled workers, Michael Lind and Lauren Damme propose the Dignity Voucher program, an innovative system of service care vouchers for the elderly.