Bleeding Heartland user American007 noted not long ago that Time Magazine often gives its “Person of the Year” award to people attempting to deal with a weak economy. So it was this year, when Time’s editors laughably chose Federal Reserve Chairman Ben Bernanke:

The story of the year was a weak economy that could have been much, much weaker. Thank the man who runs the Federal Reserve, our mild-mannered economic overlord

I wish I were joking, but here’s more from Time:

The overriding story of 2009 was the economy – the lousiness of it, and the fact that it wasn’t far lousier. It was a year of escalating layoffs, bankruptcies and foreclosures, the “new frugality” and the “new normal.” It was also a year of green shoots, a rebounding Dow and a fragile sense that the worst is over. Even the big political stories of 2009 – the struggles of the Democrats; the tea-party takeover of the Republicans; the stimulus; the deficit; GM and Chrysler; the backlash over bailouts and bonuses; the furious debates over health care, energy and financial regulation; the constant drumbeat of jobs, jobs, jobs – were, at heart, stories about the economy. And it’s Bernanke’s economy.

In 2009, Bernanke hurled unprecedented amounts of money into the banking system in unprecedented ways, while starting to lay the groundwork for the Fed’s eventual return to normality. He helped oversee the financial stress tests that finally calmed the markets, while launching a groundbreaking public relations campaign to demystify the Fed. Now that Obama has decided to keep him in his job, he has become a lightning rod in an intense national debate over the Fed as it approaches its second century.

But the main reason Ben Shalom Bernanke is TIME’s Person of the Year for 2009 is that he is the most important player guiding the world’s most important economy. His creative leadership helped ensure that 2009 was a period of weak recovery rather than catastrophic depression, and he still wields unrivaled power over our money, our jobs, our savings and our national future. The decisions he has made, and those he has yet to make, will shape the path of our prosperity, the direction of our politics and our relationship to the world.

Reality check: Bernanke has no plan to deal with unemployment, even though the “Federal Reserve Act dictates that one of the founding directives of the Federal Reserve is to ‘promote effectively the goals of maximum employment.’”

But Bernanke is wild about cuts to Social Security and Medicare. Hooray for our “mild-mannered economic overlord”!

The Senate Banking Committee votes on Bernanke’s renomination tomorrow, and he is expected to pass. However, three senators have said they will put a hold on his renomination when it reaches the floor.

I agree that the current recession could have deepened without the federal stimulus bill, especially if we had imposed the federal spending freeze Republicans wanted. But the stimulus should have been larger and better targeted toward job creation. Bernanke doesn’t favor any additional federal stimulus to create jobs. He shouldn’t even get another term at the Fed, let alone “Person of the Year.”

Many Iowans will be leaving work or school early today, or perhaps not going in at all, as the season’s first big winter blast rolls in. Here’s plenty of reading to keep you busy if you are stuck at home.

Global news first: The United National Climate Change Conference in Copenhagen opened yesterday. To follow news from the proceedings, I’m reading the team of Mother Jones bloggers in Copenhagen. The Open Left blog will also post regular updates from Natasha Chart and Friends of the Earth staff who are on the ground. If you prefer a mainstream media perspective, check out The Climate Pool on Facebook, which is a collaboration among major news organizations.

Also on Monday, Environmental Protection Agency Administrator Lisa Jackson signed off on two findings that will pave the way to regulate carbon dioxide emissions under the Clean Air Act. This action follows from a 2007 U.S. Supreme Court ruling in Massachusetts v. EPA. More background and details can be found on the EPA’s site. Environment Iowa explains the significance of the EPA’s action here. An expert panel surveyed by Grist disagreed on whether the EPA’s “endangerment finding” would affect the Copenhagen talks.

The most important reason I oppose the current draft bills on climate change kicking around Congress is that they would revoke the EPA’s authority to regulate carbon dioxide. Chris Bowers explains why that would be disastrous here.

Uganda is considering a horrific law that would subject homosexuals to long prison terms or even the death penalty. One Iowa is collecting signatures on a petition to Senator Chuck Grassley, asking him to speak out against this law. Grassley’s never going to be a gay rights advocate, but he should agree that criminalizing homosexuality is wrong. Grassley is involved with “The Family,” which is connected to the proposed bill in Uganda.

On the economic front, President Obama is expected to announce plans to use about $200 billion allocated for the Wall Street bailout to fund a jobs bill Congress will consider soon.. The Hill previewed some of the measures that may end up in that bill.

Some economists who met with Governor Chet Culver yesterday think Iowa has already reached the bottom of this recession. I hope they are right, but either way, policy-makers should listen to their ideas for reforming Iowa’s budget process. I’ll write a separate post on this important development soon. Here is the short take:

The state could base its spending on a multi-year average, such as the previous three years, or five years or seven years, said Jon Muller, president of Muller Consulting Inc., a public policy and business development consulting firm based in Des Moines.

“The way it’s always worked, when times are really good, we increase spending and we cut taxes,” Muller said. “And when times are bad, there’s pressure to increase taxes and decrease spending. And that all happens when the demand for government is at its highest,” Muller said.

The multi-year idea would flip, he said.

“In good times you would be squirreling money at way a little at a time. And in bad times, you could continue to increase spending to service the growing demands of a recession.”

It would require state lawmakers to not touch the reserves, even in times of plenty. But it would also reduce the need to tap into reserves just to get by during rainy days, the advisers said.

Regarding budget cuts, the Newton Independent reports here on a “plan to reorganize the Iowa Department of Human Services operations under two deputy directors, six rather than nine divisions, five rather than eight service areas, more part-time offices and the elimination of 78 currently vacant positions” (hat tip to Iowa Independent). Click this link for more details about the proposed restructuring.

On the political front, John Deeth analyzes possible changes the Democratic National Committee is considering for the presidential nomination process. Jerome Armstrong had a good idea the DNC won’t implement: ban caucuses everywhere but Iowa. No other state derives the party-building benefits of caucuses, but just about every state that uses caucuses for presidential selection has lower voter participation than would occur in a primary.

I haven’t written much on health care reform lately, because recent developments are so depressing. Our best hope was using the budget reconciliation process to pass a strong bill in the Senate with 51 votes (or 50 plus Joe Biden). Now that Senate Majority Leader Harry Reid has taken reconciliation off the table, we’re left with a variety of bad compromises to get to 60 votes in the Senate. I am not convinced the final product will be any improvement over the status quo. It will certainly be worse for millions of Americans required to buy overpriced private health insurance. If there’s a quicker way to neutralize the Democrats’ advantage with young voters, I don’t know what it is.

Speaking of health care reform, Steve Benen wrote a good piece about Grassley’s latest grandstanding on the issue.

Speaking of things that are depressing, John Lennon was shot dead 29 years ago today.  Daily Kos user noweasels remembers him and that night. Although Paul’s always been my favorite Beatle, I love a lot of John’s work too. Here’s one of his all-time best:

Share any relevant thoughts or your own favorite Lennon songs in the comments.

Forbes.com compiled a list of the best “bang for the buck” cities in the U.S.:

To find the cities that offer the most bang for the buck, we looked at the country’s 100 largest Metropolitan Statistical Areas–geographic entities defined by the U.S. Office of Management and Budget, for use in collecting statistics– across these measures: foreclosures as a percentage of home prices; vacancies; unemployment rates; a three-year job-growth forecast; a three-year home-price forecast; housing affordability; median real estate taxes; and median travel time to work.

The Des Moines/West Des Moines metro area ranked fourth out of 100:

With low unemployment, at 6%, few vacancies and a promising home price forecast, the real estate market shows fresh signs of robustness. And its home prices make it possible for budget-conscious home buyers to get in the door–it scores above average for home price affordability.

The Omaha/Council Bluffs area ranked first on the Forbes.com list, and also ranked first on the list of cities “best surviving the recession. “No other Iowa metros were large enough to be considered for this analysis.

Click here and scroll down for more details on the methodology used to assess unemployment and healthy housing markets. Click here for the list ranking all 100 most populous metro areas. If you’re feeling down now that snow has arrived in Iowa, consider how much more affordable life is here compared to most of the sun belt cities.

Barack Obama’s job approval in Iowa fell to 49 percent according to the latest statewide poll by Selzer and Co. for the Des Moines Register. His lowest marks were for his handling of the budget deficit (30 percent approve, 61 percent disapprove), leading Kathie Obradovich to suggest that “Cut spending and balance the budget” should be at the top of Obama’s to-do list.

No matter what today’s polls say about the deficit, it would be poor economic policy and foolish politics to make deficit reduction a priority now.

The Des Moines Register brought to my attention a new report ranking 200 large metropolitan areas and 124 smaller metropolitan areas:

The 2009 Milken Institute/Greenstreet Real Estate Partners Best-Performing Cities Index ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth.  The components include job, wage and salary and technology growth.

The list of smaller cities includes eight Iowa metros, and you can view the details here. My short take is after the jump.

Iowa has relatively good money-management practices and is among the states “least like California” in terms of budget problems, according to a report released yesterday by the Pew Center on the States.

In the report, Pew’s researchers identified factors that have contributed significantly to California’s difficulties, then determined the degree to which other states are experiencing the same challenges. These factors are: (1) loss of state revenues; (2) the relative size of budget gaps; (3) increasing joblessness; (4) high foreclosure rates; (5) legal obstacles to balanced budgets-specifically, a supermajority requirement for tax increases or budget bills and (6) poor money-management practices.

Pew scored all 50 states using the best available data as of July 31, 2009. The snapshot captures an important juncture: the first and second quarters of 2009, the pressure point for governors and legislatures in the throes of crafting their budgets for fiscal year 2010 (which began on July 1 in all but four states).

Click here to view a map showing which states are most and least like California. On that page you’ll also find links to download the full report, its methodology, and a 50-state scorecard (pdf file).

Scanning the scorecard, I noticed that only one state has a better score overall than Iowa. The size of Iowa’s budget gap (as a percentage of total spending) ranks 15th. Only three states had a smaller change in the unemployment rate than Iowa. Only seven states had a lower foreclosure rate. We were among eight states that received a B+ grade for money-management practices (only five states received an A or A- in that category).

Republicans can complain about so-called fiscal mismanagement by Governor Chet Culver and the Democratic-controlled legislature, but compared to many other states, Iowa is weathering this challenging economy well.

Commenting on the Pew report yesterday, Mark Zandi of Moodys.com called for additional federal stimulus funding to support state budgets in fiscal year 2011: “In the past six decades, state and local governments have never seen the kind of tax-revenue collapse they are now experiencing, Mr. Zandi said.”

On Tuesday the U.S. House of Representatives passed the Unemployment Compensation Extension Act of 2009, which “would extend unemployment insurance benefits by 13 weeks in states that have jobless rates above 8.5 percent.” 27 states and the District of Columbia have unemployment rates exceeding that level.

The bill easily passed by a vote of 331 to 83, but as you can see from the roll call, Iowa’s House delegation was divided in an unusual way. Representatives Bruce Braley (IA-01) and Leonard Boswell (IA-03) were among the 17 Democrats who voted against the bill. They opposed it because unemployed Iowans would be ineligible for the extended benefits. Although our state has the eighth-lowest unemployment rate in the country, we also have pockets of higher unemployment, especially in rural areas.

After the jump I’ve posted statements released by Braley and Boswell on this bill. Boswell noted that four counties in the third Congressional districts have unemployment rates above 9 percent. Braley noted, “When you’re unemployed, it doesn’t matter to you what your state’s unemployment rate is.  What matters is that you need to support your family.”

Representative Dave Loebsack (IA-02) did not vote yesterday, because he was meeting with Fema Administrator Craig Fugate and various state and local officials in Cedar Rapids to discuss flood recovery efforts. I contacted his office for comment on the unemployment bill. His spokesperson Sabrina Siddiqui told me that Loebsack had serious concerns about the way Iowans were excluded from the extended unemployment benefits, adding that Loebsack is working with House leaders to address the needs of unemployed Iowans in future legislation.

Extending unemployment benefits during a severe recession is good policy, not only to help struggling families, but because spending on unemployment benefits has a very high economic stimulus “bang for the buck.” That said, it’s unfair to penalize unemployed Iowans for the fact that our state is faring better than many others on the jobs front.

Iowa’s Republicans in the U.S. House were also divided on this bill, with Tom Latham (IA-04) voting yes and Steve King (IA-05) voting no.

Hope you’ve been enjoying the perfect Iowa weather during this holiday weekend. The U.S. Department of Labor and Blog for Iowa provide background on the history of Labor Day.

Organized labor doesn’t have a lot to celebrate right now, with more job losses in the manufacturing sector and unemployment rising across the country (though Iowa’s unemployment rate is significantly lower than the national average). The Iowa Policy Project finds that “the state of working Iowa” is not good. As in the previous recession, we are losing jobs with good benefits as wages stagnate for the people who still have jobs. We now rank 32nd in terms of median wages, and lower incomes mean less money for consumers to spend at other businesses. Click here for the full report, which also explains that “policy makers could do more to make work pay for low- and moderate-income working families and to insist upon job-quality requirements in economic development strategies.”  

Iowa hasn’t adopted most of organized labor’s key legislative priorities in recent years, in part because of the “six-pack” of Iowa House Democrats that blocked those bills. On the plus side, Curt Hanson’s victory in the House district 90 special election means we haven’t lost any ground on this front. We only need to persuade one or two “six-pack members” (or defeat them in Democratic primaries) to find the 51st vote for “prevailing wage,” for instance.

I haven’t heard much lately about Senator Tom Harkin’s efforts to find a compromise on the Employee Free Choice Act. Getting 60 votes in the Senate for anything meaningful is likely to be quite difficult. The Service Employees International Union has some news related to the EFCA here.

Two years ago I attended the Solidarity Fest Labor Day celebration in Des Moines, featuring John Edwards and Hillary Clinton. The same event, sponsored by the South Central Iowa Federation of Labor, AFL-CIO, takes place today in the 4-H building at the State Fairgrounds from noon to 2 pm. Later today, the Friends of Iowa Midwives are having a family-friendly potluck picnic at Raccoon River park in West Des Moines (4 to 8 pm, suggested donation $5).

After the jump I’ve posted details for lots of other events coming up this week.

The U.S. House Transportation and Infrastructure Committee has been keeping track of how states are spending the stimulus funds allocated for roads. On September 2 the committee released a report ranking the states according to how much of the American Recovery and Reinvestment Act funding for highways and bridges had been put to work as of July 31. This pdf file contains the state rankings.

Iowa ranked second overall, having put 75 percent of its stimulus road funds to work by the end of July. Join me after the jump for more details from the report and analysis.  

State Representative Chris Rants promised to run his gubernatorial campaign on “Diet Coke and Casey’s pizza and ethanol,” but attacks on Governor Chet Culver are the real fuel for his political ambitions. He’s been bashing Culver’s economic policies all summer. His latest target is the Power Fund, which Rants would ax to help balance the state budget.

Culver and his office have repeatedly cited a study by the Green Jobs Initiative Committee, which estimated that Iowa has more than 8,700 “green jobs,” a substantial increase in the past few years. Culver has credited the Power Fund with helping create thousands of jobs, while Rants says Culver is misleading Iowans because fewer than 100 jobs can be directly attributed to Power Fund grants.

If I were Culver, I would seize the chance to debate renewable energy with Republicans.  

I recently discussed how Iowa is fully utilizing federal stimulus funds to expand unemployment benefits, unlike many other states, which are leaving all or part of that money on the table.

The Iowa Senate highlighted steps taken during the 2009 session to extend unemployment benefits, which went into effect on July 1:

· Improving and expanding services for unemployed Iowa workers. By making reforms to Iowa’s unemployment insurance program, our state will receive $70.8 million from the federal government to extend benefits for unemployed workers in training programs. It makes sense to support Iowans who are trying to upgrade their skills by attending community college and other types of training.

· Paying unemployment claims for replacement workers who become unemployed when Iowa National Guard and Reserve members return to their local jobs after active duty. When our soldiers come home, the state should help the replacement workers without penalizing employers.

· Providing $18.9 million to workforce field offices across Iowa. Iowa has 55 workforce centers, which provide job counseling, training, placement and other assistance. These services help laid off workers move forward and help local businesses find the employees they need.

For more details, read the full text of Senate File 197 here.

Note: the $70.8 million in federal funding for expanded unemployment benefits came from the economic stimulus bill, or American Reinvestment and Recovery Act. All House Republicans, including Iowa’s Tom Latham and Steve King, voted against that bill, as did almost all Senate Republicans, including Chuck Grassley.  

I see a Chet Culver campaign ad in our future after reading this Radio Iowa story. The non-partisan U.S. Government Accountability Office examined how 16 states are using stimulus funds from the American Reinvestment and Recovery Act:

“We found that Iowa has a foundation of safeguards to help ensure the funds are being spent in the way that they were intended and to minimize the fraud, waste and abuse,” [GAO Iowa division head Lisa] Shames said. The G.A.O. report also praises Iowa for setting up an Accountability and Transparency Board.

“We found that there were many good features in place and that bodes well in terms of the Recovery Act dollars and to ensure that they’re going to create the jobs and retain the jobs that the law intended,” Shames said.

Click here for the summary of the G.A.O’s report on Iowa. From that page you can download the full report (a 40-page pdf file). Reports on other states are available here.

Did I mention that unlike many states, Iowa is fully utilizing stimulus funds intended to help unemployed people?

And that compared to many states, Iowa has wisely invested its stimulus funds for transportation?

We’ll be hearing more about this next year in response to Republicans attacks against Governor Culver. No doubt ragbrai08 is right, and some version of this Tom Vilsack re-election message from 2002 will return to Iowa airwaves in 2010:

My opponent suggests in negative ad after ad that a bunch of problems that have struck virtually every state in the nation are somehow unique to Iowa. That’s his whole campaign. The truth is that in Iowa, we’ve met that challenge better than most.

Though unemployment remains a significant problem in Iowa, our unemployment rate is well below the national average during this recession. Our state officials are doing a good job allocating federal funds intended to save and create jobs, and the I-JOBS program will save and create additional jobs.

Don’t expect Iowa Republicans to pay attention to the G.A.O.’s findings. They never got the point of the stimulus anyway.

When Congress was debating the stimulus bill earlier this year, Mark Zandi, the chief economist for Moody’s, compared various forms of government spending and tax cuts in terms of economic stimulus “bang for the buck.” He concluded (pdf file) that various forms of government spending did more to stimulate the economy than various kinds of tax cuts.

The best kinds of spending in terms of stimulative effect were food stamps and extending unemployment benefits. Every extra dollar the federal government spends on food stamps generates approximately $1.73 in economic activity, and every dollar the federal government spends to extend unemployment benefits generates approximately $1.63 in economic activity. People who need these services are likely to spend additional money quickly, helping preserve jobs in the retail sector.

With this in mind, you might imagine that the states would take full advantage of money allocated to unemployment benefits in the American Reinvestment and Recovery Act. But you would be wrong, according to this article by Olga Pierce from ProPublica:

So far, only about half of the $7 billion included in the stimulus package [for expanding unemployment insurance] has been claimed by states. […]

Four states have explicitly rejected the funding, but many others have so far failed to pass legislation qualifying them for incentive payments. […]

Under the stimulus bill [2], states can qualify for the extra funding by extending unemployment insurance to new categories of workers. To receive a third of the funding, they must begin using something called an alternative base period, which would allow more low-wage workers to receive unemployment benefits. […]

To get the other two-thirds of the cash, they must adopt at least two other changes from a list that includes covering part-time workers and offering $15 extra per week for each dependent.

If states meet the requirements, they qualify for a federal lump sum payment that will cover the cost of expansion for at least three years, or longer in many cases. It was on those grounds – that after the federal funding runs out states will have to find another way to cover the cost – that Louisiana Gov. Bobby Jindal [3], Mississippi Gov. Haley Barbour [4] and others [5] that said they would reject the funding.

Bleeding-heart liberal that I am, I believe basic fairness justifies extending unemployment benefits to more part-time and low-wage workers. But even if you don’t care about fairness, Zandi’s analysis shows that extending unemployment benefits will get money circulating in the economy.

Click here for a map and a chart showing how much federal unemployment money each state has claimed.  

As of mid-June, 17 states had claimed none of the stimulus funding for unemployment benefits, and another 12 states and the District of Columbia had claimed only part of that money. In some of those states, Democrats are in charge. Progressives who have ridiculed Republican governors for rejecting stimulus money for unemployment benefits should also hold Democrats accountable on this score.

Fortunately, Iowa is among 21 states that have fully used these stimulus funds as Congress intended. Thousands of Iowans struggling to get by will benefit from the $70.8 million the stimulus bill appropriated to our state for unemployment benefits. Democrats in the state legislature and Governor Chet Culver deserve credit for enacting the necessary legislative changes to collect this funding.

Many of the states that have left stimulus money on the table have significantly higher unemployment rates than Iowa, by the way.

Speaking of boosting the economy, Zandi’s report showed that infrastructure projects were the third-most stimulative form of government spending. Every extra dollar spent on infrastructure generates an estimated $1.59 in economic activity. Remember that next time Iowa Republicans bring out their misleading talking points about the the I-JOBS program. Also remember that Iowa has used the stimulus bill’s transportation funding wisely compared to many other states, according to a recent review by Smart Growth America.

In contrast, most kinds of tax cuts Republicans advocate generate less than one dollar of economic activity for every dollar they cost the government. As a gesture to Republicans, Democrats replaced some spending in the stimulus bill with $70 billion allocated to fixing the alternative minimum tax, even though Zandi’s analysis found that a dollar spent on fixing the alternative minimum tax generates only about 49 cents in economic activity.

It’s too bad the Obama administration made a number of concessions to Republicans on the stimulus bill. Like Bob Herbert wrote a few months ago, when the GOP talks about the economy, nobody should listen.

It’s been a week since same-sex marriage became legal in Iowa, and I’m happy to report that my hetero marriage has not yet collapsed under the strain of sharing rights with gays and lesbians.

Click “there’s more” to read about events coming up this week. As always, post a comment or send me an e-mail (desmoinesdem AT yahoo.com) if you know of something I’ve left out.

Advance warning: May 11-15 is Bike to Work week.

Registration is FREE. Over 500 Bike to Work Socks have been ordered from the Sock Guy. This year’s socks are green. Socks will be available at events throughout the week on a first come, first serve basis. (One pair per pre-registered rider.) Everyone who registers and takes the pledge is eligible for $1,000 in Bike Bucks for use in any sponsoring bike shop and many other prizes! Registration closes at Noon on Thursday May 14th. Questions? Check out Bike to Work Week events and businesses around Iowa at www.bikeiowa.com.

Sorry to bring you down on a Friday afternoon, but the Iowa Revenue Estimating Conference released new estimates today, and it ain’t pretty:

The conference estimated that the current year’s revenues will sink by $129.7 million compared to its December estimate. Revenue for the budget year that begins July 1 will drop by $269.9 million.

The drop is in addition to December’s estimates, which cut $99.5 million in the current year and $132.6 million in the fiscal year that begins July 1.

Charlie Krogmeier, Gov. Chet Culver’s chief of staff and a member of the conference, said federal stimulus money may help offset the blow but that the dramatically lower estimates will leave lawmakers with tough options.

It would be difficult to find enough job cuts and furloughs in the current fiscal year to fill the gap. The fiscal year ends June 30, in roughly 10 weeks. […]

House Majority Leader Kevin McCarthy […] and other Democratic leaders noted on Thursday that they were already planning a budget that was $130 million less than Culver’s in the upcoming fiscal year. It’s unclear how they will make up the additional $270 million loss for the current and upcoming year.

Clearly difficult choices lie ahead. I urge Iowa leaders not to implement spending cuts alone, because cutting government spending too much during a recession can make things worse.

I was encouraged to read recently that legislators are looking carefully at all of the tax incentives Iowa provides. The combined effect of all these tax incentives is larger than all state spending:

There are at least 191 tax breaks for income and sales taxes that cost or prevent Iowa from collecting almost $7.2 billion, according to a 2005 review by the Iowa Department of Revenue and Finance.

That’s more than total state spending, which is projected to be $7.1 billion next year.

Not all of these tax breaks provide good value for the lost revenue, and not all of them can be preserved with the budget shortfall we’re facing.

In other unpleasant news this Friday, the Principal Financial Group, one of Iowa’s largest employers, announced pay cuts between 2 and 10 percent, which will affect all employees, management and the board of directors. Some benefits will also be reduced.

Principal already imposed a large layoff in December, and I think they are doing the right thing by reducing pay rather than cutting more jobs now. Labor market specialists differ on whether it’s better for companies to cut pay or lay off more workers in lean times. Click here to read some arguments for reducing pay, or click here for the pro-layoff argument.

As you can see from this graph, job losses in the current recession are worse than in other recent recessions and are continuing to accelerate at a time when the U.S. economy has already started adding jobs during the past two recessions.

Paul Krugman, who has been arguing for a much larger stimulus package, is very worried:

To see how bad the numbers are, consider this: The administration’s budget proposals, released less than two weeks ago, assumed an average unemployment rate of 8.1 percent for the whole of this year. In reality, unemployment hit that level in February – and it’s rising fast.

Employment has already fallen more in this recession than in the 1981-82 slump, considered the worst since the Great Depression. As a result, Mr. Obama’s promise that his plan will create or save 3.5 million jobs by the end of 2010 looks underwhelming, to say the least. It’s a credible promise – his economists used solidly mainstream estimates of the impacts of tax and spending policies. But 3.5 million jobs almost two years from now isn’t enough in the face of an economy that has already lost 4.4 million jobs, and is losing 600,000 more each month. […]

So here’s the picture that scares me: It’s September 2009, the unemployment rate has passed 9 percent, and despite the early round of stimulus spending it’s still headed up. Mr. Obama finally concedes that a bigger stimulus is needed.

But he can’t get his new plan through Congress because approval for his economic policies has plummeted, partly because his policies are seen to have failed, partly because job-creation policies are conflated in the public mind with deeply unpopular bank bailouts. And as a result, the recession rages on, unchecked.

At MyDD Charles Lemos wonders whether current job losses may become permanent because of the manufacturing sector’s continuing decline.

Only the biggest layoffs make headlines, as when John Deere cut 325 jobs in Dubuque and Davenport last week. But almost all of us have friends or relatives who have lost their jobs in the past six months. Thankfully, none of my recently-unemployed friends are likely to lose their homes, but lots of people aren’t so lucky. Tent cities are booming across the country.

If you are looking for work, read this piece by Teddifish on How to get a job when no one is hiring.

Daily Kos diarist plf515 just found a new job and shared some advice in this diary:

How did I get this job?

I told everyone I was looking for work!  

This particular lead came from an announcement I made on SAS-L a mailing list about software that I use.  I am a frequent contributor there, someone who has read my work saw my mention, and then forwarded me a link to a job offer. […]

But I didn’t just mention it there.  I told everyone. I wrote a diary here; and I joined dkos networking; I announced it on mailing lists; I told my friends; I told former employers; I told the guy who does our dry cleaning; I told EVERYONE.  I also left cards advertising my consulting business all over.  

Can you find a job in this economy? Well, there are no guarantees.  But, if people don’t know you’re looking, they’ll never tell you about any openings.  

MyDD user ragekage has specific advice for people pursuing a career in nursing because they think it is a “recession-proof” occupation.

This thread is for any comments about unemployment or helpful advice about finding jobs.

Freeze federal spending in response to a huge spike in unemployment.

No, seriously, House Republican leader John Boehner is now proposing a federal spending freeze. Like Josh Marshall says,

I’m not even sure it’s fair to say that this is a replay of the disastrous decisions the magnified the Great Depression between 1929 and 1933. It’s more a parody of it. When the crisis is a rapid and catastrophic drop off in demand, you handcuff the one force that can create demand (i.e., the federal government) in the throes of the contraction. That’s insane. Levels of stimulus are a decent question. Intensifying the contraction is just insane and frankly a joke.

Paul Rosenberg has some good comments and a Rachel Maddow clip on this topic.

Republicans have long advocated dumb ideas on economic policy, like Congressman Steve King’s proposal to boost investment by eliminating capital gains taxes. To state the obvious, investors are not staying away from stocks because they’re worried about paying taxes on huge capital gains. On the contrary, investors fear that they will lose money because the market has not hit bottom yet and the recession will bring down more companies.

Similarly, fear of taxes on corporate profits has little to do with why businesses are not investing in production now. Business owners are not worried about finding money to pay taxes on profits. They are worried about losing money because skyrocketing unemployment reduces consumer demand for the goods or services that businesses sell.

In fairness, if we followed bad Republican advice on cutting corporate and capital gains taxes, we’d only be giving wealthy Americans tax breaks with a very small economic stimulus “bang for the buck” (see this data compiled by the chief economist for Moody’s). If we followed Boehner’s “new and improved” Republican advice to freeze federal spending, we would send the economy into a meltdown.

I have to wonder whether Republicans even believe in their own talking points. A spending freeze, really? That’s not what George W. Bush and the Republican majority in Congress did during the previous recession.

I think they may be beating the drum on spending to scare some Democrats out of supporting Obama’s budget proposal. What worries me is the scenario outlined by Open Left user Master Jack:

1. Obama submits a budget with the spending necessary to avoid a depression.

  2. Blue Dogs bitch and bleat and whine.

  3. Obama caves to the blue dogs and waters down his budget.

  4. Depression ensues.

  5. Democrats get clobbered in 2010.

  6. Liberals get blamed.

  This is what the Republicans are trying to make happen. And it wouldn’t stand a prayer of working of not for their blue dog enablers.

Democrats from President Obama on down need to push back hard against the Republicans’ idiotic new line.  

Representative Steve King bragged about his 11th-grade research project in the Thursday edition of the Des Moines Register:

As a junior at Denison High School, I wrote a term paper on President Franklin D. Roosevelt and the New Deal. I began working on the paper with the intention of confirming what I had been taught in school – that FDR’s government recovery programs brought America out of the Great Depression.

I started my research believing in the success of Roosevelt’s economic-recovery programs. To support this claim, I spent hours at the Carnegie Library in Denison reading past editions of the local, biweekly newspaper.

My reading began with the 1929 stock-market crash, and I examined every issue through the attack on Pearl Harbor in December 1941. Those stacks of old papers turned upside down everything I had been taught in history and government class about the New Deal. As I searched for information proving the New Deal stabilized the American economy, I instead found the exact opposite: high unemployment, a struggling stock market and continued hard times.

Later statistical findings confirm my 11th-grade research. Throughout the 1930s, the unemployment rate never dipped below 14 percent. FDR’s tinkering with the free market frustrated investors, and the 1929 high point for the Dow Jones industrial average was not reached again until 1954.

Roosevelt possessed tremendous leadership skills and inspired many Americans, including my hard-hit family. Charisma aside, historians often inflate the true economic record of the New Deal. Roosevelt tried one big government program after another, with poor results. Many of Roosevelt’s programs and initiatives led the government to compete directly with the private sector for capital and workers, with Washington making the rules.

Massive government spending did not lift the United States out of recession. Instead, FDR’s big-government programs prolonged the Great Depression. The best we can say about the New Deal is that it may have blunted the depths of the Depression, but the trade-off was it delayed economic recovery until World War II and our post-war industrial advantage brought America out of the Depression.

Ah yes, the “poor results” of big-government programs introduced by FDR. Programs like Social Security, which dramatically reduced poverty among the elderly, and the Fair Labor Standards Act, which “set maximum hours and minimum wages for most categories of workers.”

But never mind the safety net for seniors and regulations that improved the quality of life for workers. What about King’s central claim, that the New Deal prolonged the Great Depression? This is now a key right-wing talking point against government spending in Barack Obama’s stimulus package.

It is wrong to say that no economic recovery occurred during the New Deal. On the contrary,

The economy had hit rock bottom in March 1933 and then started to expand. As historian Broadus Mitchell notes, “Most indexes worsened until the summer of 1932, which may be called the low point of the depression economically and psychologically.”[18] Economic indicators show the economy reached nadir in the first days of March, then began a steady, sharp upward recovery. Thus the Federal Reserve Index of Industrial Production hit its lowest point of 52.8 in July 1930 (with 1935-39 = 100) and was practically unchanged at 54.3 in March 1933; however by July 1933, it reached 85.5, a dramatic rebound of 57% in four months. Recovery was steady and strong until 1937. Except for unemployment, the economy by 1937 surpassed the levels of the late 1920s. The Recession of 1937 was a temporary downturn. Private sector employment, especially in manufacturing, recovered to the level of the 1920s but failed to advance further until the war.

Unemployment continued to be high by today’s standards throughout the 1930s, but King ignores the sharp reduction in unemployment following the introduction of New Deal policies.

The bottom line is this: the unemployment rate dropped by 9 percent during the pre-World War II FDR era, and the absolute number of unemployed people dropped by 36.7 percent (from 12.8 million unemployed in 1932 to 8.1 million unemployed in 1940).

World War II significantly reduced the number of unemployed Americans, but again, it is false to claim that the New Deal programs accomplished little on the employment front.

By way of comparison, under King’s hero Ronald Reagan, the unemployment rate only dropped by 2.1 percent, and the absolute number of unemployed people dropped by 19.0 percent (from 8.2 million in 1981 to 6.7 million in 1988).

The U.S. population was a lot bigger during Reagan’s presidency than it was in FDR’s day. If Reagan’s policies were so much better for putting people to work, why did we not see a larger decrease in the total number of unemployed Americans during the 1980s? Why did we see such marginal improvement in the unemployment rate during Reagan’s presidency?

If we look at employment figures under every president since FDR, King’s nemesis Bill Clinton comes out ahead. During his presidency, the unemployment rate declined by 2.9 percent, and the total number of unemployed dropped by 36.3 percent (from 8.9 million in 1993 to 5.6 million in 2000).

Note: Chase Martyn had a go at King at Iowa Independent, but he was too kind in my opinion. The facts do not support King’s assertion that the New Deal delayed economic recovery and failed to address high unemployment.

Someone please talk King into running for governor in 2010 so we can get a less odious Republican representing Iowa’s fifth district.

My apologies for not getting this in closer to the actual new year, but you could say that “a day late and a dollar short” has been the theme of the new year so far for me. Or five days short, as the case may be.

In any case, before we start the new political year for real, I thought it might be fun to share our predictions for the new year. Here are nine predictions of mine for two thousand and nine.

1. The state budget is in far worse shape then we think. Expect the fight over the budget to get ugly, quick.

The Iowa state fiscal year runs from July 1 2008 to June 30 2009–right in the heart of the economic meltdown. Given that the estimates for this period are just starting to come in, it's reasonable to assume that the stories we're currently hearing about the “budget crisis” represent only the tip of a much larger iceberg. Likewise, the 1.5% across-the-board cut currently proposed by Gov. Culver isn't going to be nearly enough to solve the crisis. It's going to get ugly and fast.

2. Unemployment will hit 10% by the end of 2009, and recovery will not come until early 2010.

Call me a pessimist, but I think things are going to get much worse before they get better. When you combine the potential failure of the Big 3 (a still unresolved issue, by the way), plus a global manufacturing slowdown, with the fact that up to 25% of retail stores may declare bankrupcy in the next year–you have the recipie for unmitigated economic disaster.  

To complicate matters, I do not expect President Obama's recovery measures to be passed before May of this year. (There are already signs that a long battle is ahead for this bill.) That means that many of the infrastructure projects given funds through the program will miss out on the summer construction window–meaning they likely won't start until Summer 2010. Many other measures, like tax cuts or social programs won't go into effect until 2010 as well…moving the light at the end of the tunnel further and further away.

3. The Big 3 will not survive in their current form. Get ready for the Big 2.

Regardless of whether the auto bailout was the correct move at the time, by the time the big ball drops in 2010–there will no longer be a Big 3 as we know them now. My best guess is that one of the Big 3 automakers (most likely Chrysler) will implode into disorganized bankrupcy. No buyer will be found, and the brand will simply cease to exist. This will spark a crisis that will either lead to the organized bankrupcy/restructuring of the other companies, or government assistance with severe Bob Corker style conditions. 

The good news is that out of the multitude of laid-off engineers and designers, we could see new  and innovative technologies, designs, and companies form. By 2020 we could all be driving solar hybrids designed and built by ex-Big 3 designers who started their own companies.

6. The Supreme Court will rule in favor of same-sex marriage in the case of Varnum v. Brien.

Beware the ides of March rings true in Iowa in 2009. Expect a ruling on the case of Varnum v. Brien to come down with a rulings for several other cases on March 13, the conclusion of the Court's March session. When that happens expect a whirlwind of craziness to descend on the state: national media, a rush of spring weddings, celebrity attention, half-cocked legal challenges, right-wing rants, Fred Phelps-ian protests, legislative blustering, Steve Deace's head exploding, and who knows what else.

I don't think the moon turning to blood, the dead walking the streets, or any other Pat Robertson-style pronouncements will come true…but expect a wild ride.

5. The Republican candidate for Governor will be a serious contender who already holds a major elected office.

The current fight over the RPI chair has a definite and familiar theme: change. Old hacks are out, new hacks are in. While there is a faction of the GOP that clings to BVP like life preserver, the majority of the party is, I think, waiting for someone new to come along.

That someone is either State Auditor David Vaudt, Sec. of Agriculture Bill Northey, or 4th District Congressman Tom Latham.

Vaudt looks to emerge as one of the main faces of opposition to Culver on budget issues, a position he could use to slingshot him to the governorship. Northey is the darling of the Republican Party and, with agricultural issues on the back-burner this year and little to do, may find the Governor's race an attractive prospect. Latham, by all measures a low-importance member of the minority party might decide that its now or never for him. And he has nothing to lose: if he wins, he's the Governor; if he loses, he can run again as the elder-statesman in the dogfight that will be the new 3rd district.

Kula2316 posted several clips containing economists’ reactions to news that U.S. employers cut more than half a million jobs in November. From a story in today’s Washington Post:

Indeed, the economy is unraveling so fast as to defy analysis through the usual statistical models. Among the phrases found in normally sober reports from the nation’s top economic forecasters yesterday: “god-awful,” “wholesale capitulation,” “shockingly weak” and “indescribably terrible.”

“The numbers here are truly horrific,” said Bernard Baumohl, chief global economist at the Economic Outlook Group, a consultancy. “It is clear this economy is now deteriorating with frightening speed and ferocity.”

Many experts expect the economy to get worse before it gets better. I graduated from college in what we thought was a gruesome hiring environment during Poppy Bush’s presidency. People who could get into some kind of graduate school jumped at the chance to stay off the job market for a year or two.

If you are looking for a job now, or plan to be looking soon, I recommend Teddifish’s Daily Kos diary on How to get a job when no one is hiring. Teddifish’s advice is mainly geared toward people starting out their careers, but the comment thread under that diary is full of ideas that apply to job-seekers of any age and experience level.

For instance, several people recommended sending a thank-you note after a job interview. That can help you stand out among the competitors. Even if you are not hired right away, sending a note to thank the interviewer for his or her consideration can help you in the future. Often an employer’s first choice doesn’t work out for whatever reason.

I’ll share one tip, which got me the job that changed my life: If you are a finalist for a position and don’t get an offer, call to find out why you weren’t hired.

I had had what I thought was a very positive interview in September. I heard a week or two later that I had made the cut to their short list, and they would be making a decision soon. October passed and I never heard anything. I assumed they hired someone else.

This job was in a different city. In January I went to that city, thinking I had another promising lead. While I was in town, I decided to call the guy who had interviewed me in September, who was the director of the institute where I wanted to work. I was nervous, but I had been advised that it was worth asking why I hadn’t been hired.

When he got on the phone, he said, “Boy, am I embarrassed to be talking to you.” It turned out that they weren’t 100 percent happy with any of the finalists, so the position was still open. (I was considered too inexperienced.) But as long as I was in town, he invited me to come down to their office.

Then I got to meet with the man who was going to head the department I had applied for. That interview went very well. He liked me and felt that while I didn’t have a lot of directly relevant experience, I had skills and background that suggested I would have a lot to contribute. He also knew of and respected one of the references listed on my resume.

Within an hour they offered me a job and I was talking to someone in human resources about moving and temporary housing while I looked for an apartment. It was surreal.

I don’t know if professional head-hunters recommend calling to find out why you weren’t hired, but it worked out for me.

Share any thoughts about the economy or job market in the comments.

UPDATE: Several Daily Kos commenters recommended Dick Bolles’ book “What Color Is Your Parachute?” He has a website with information for job-hunters and career-changers here.

Worse than you thought:

Skittish employers slashed 533,000 jobs in November, the most in 34 years, catapulting the unemployment rate to 6.7 percent, dramatic proof the country is careening deeper into recession.

[…]

As companies throttled back hiring, the unemployment rate bolted from 6.5 percent in October to 6.7 percent last month, a 15-year high.

“These numbers are shocking,” said economist Joel Naroff, president of Naroff Economics Advisors. “Companies are sharply reacting to the economy’s problems and slashing costs. They are not trying to ride it out.”

The unemployment rate would have moved even higher if not for the exodus of 422,000 people from the work force. Economists thought many of those people probably abandoned their job searches out of sheer frustration. In November 2007, the jobless rate was at 4.7 percent.

I knew things were bad (I have a couple of friends who’ve been laid off this fall), but I am surprised the monthly job-loss total is worse than at any time since 1974. That is terrible.

At Daily Kos, TomP has Barack Obama’s response to the unemployment numbers. Excerpt:

At the same time, this painful crisis also provides us with an opportunity to transform our economy to improve the lives of ordinary people by rebuilding roads and modernizing schools for our children, investing in clean energy solutions to break our dependence on imported oil, and making an early down payment on the long-term reforms that will grow and strengthen our economy for all Americans for years to come.”

It looks like Obama will try to fold a lot of energy and infrastructure programs into a large economic stimulus bill early next year. That’s a smart approach, but I hope he won’t make too many concessions to boondoggles like “clean coal.” Also, I would hope that a large portion of the infrastructure spending goes on fixing and maintaining current roads and bridges, along with expanding rail travel. Too often federal spending on the transportation sector goes largely toward new road construction.