By Courtney Ann Jackson- Talk Radio News Service
U.S. Senator Arlen Specter (D-Penn.) commented on his party switch during his keynote address at the “Best and Brightest Forum on Medical Innovation: Achieving Recovery Through Discovery” today at the Newseum. He said he just couldn’t stand by the Republican party given the economic problems of the country and the prospect of falling into another Great Depression. (0:36)
Jonathan Bronsetin, Talk Radio News Service
Out of the International Monetary Fund’s, Spring 2009 meeting came a simple, but poignant message: the world is still in a recession. But the key to any recovery, according to the IMF, relied upon the restoration of the health of the banking system.
“You never recover before you completed the cleaning up of the balance sheet of the financial sector,” said Dominique Strauss-Kahn, Chairman of the IMF.
Strauss-Kahn believes that any nation can postpone cleaning the banks balance sheet, but this will only postpone a full-fledged recovery.
“I don’t underestimate the difficulties of the task, but the fact that it is difficult does not make it less necessary,” said Strauss-Kahn.
Additionally, Strauss-Kahn applauded the efforts of governments to recognize and quickly deal with this recession through the implementation of successful economic stimulus’s. He believed that the stimulus had a 1/3 greater affect because it occurred in a coordinated fashion.
Strauss-Kahn bluntly predicted. “Our [the IMF] belief is that the crisis is far from over, and there are long months of economic distress in front of us.”
Jonathan Bronstein, Talk Radio News Service
The dreary, Washington, D.C. weather was matched only by the International Monetary Fund’s, IMF, Spring 2009 edition of the World Economic Outlook. This report was rife with sobering news regarding the future of the economy.
Echoing many statements made by various IMF economists over the past few days during the IMF’s annual Spring meetings, the report expects 2009 to be a year of negative growth, and a year in which many nations willingness to continue to maintain low interest rates and stimulate the economy will be tested.
The report predicted that the global economy will decline by 1.3 percent, as a whole during 2009, which is the greatest rate of decrease since World War II. This also marks a dramatic revision from the IMF’s last WEO report in January 2009.
Economists have recognized that the world is in the midsts of a economic slowdown, but the extent of the recession was worse than expected.
“Global GDP went down by an unprecedented 6 percent at an annual rate in the last quarter of 2008,” said Olivier Blanchard, an economic counselor and director of research at the IMF, “and as far as we can tell, will most likely decline almost as fast in the first half of 2009.”
The six percent contraction of the world economy in 2008 followed four percent growth the previous year.
However, “Growth is expected to reemerge in 2010, but at just 1.9 percent would be sluggish relative to past recoveries,” according to the report.
The WEO attributes this slow growth to financial market stabilization taking longer than to occur then perviously believed, despite the strong and effective efforts by policy makers. The reason for such a long and protracted stabilization of the financial sector is because the amount of “toxic assets” globally will reach $4 trillion, according to the Spring 2009 Global Financial Stability report, which greatly exceeds the previous estimate of $2.7 trillion made in January 2009.
Another piece of sobering news was in regard to the unemployment rate.
“As long as growth is below its normal rate, then unemployment will continue to increase, and therefore our forecast implies that unemployment will crest only at the end of 2010,” said Blanchard.
But all was not entirely negative in the report, as it did stress how the world’s governments have taken the proper steps needed to stem the damage of the recession. The main policy that was universally applauded was the employment of stimulus, which reached 2 percent of global GDP, a level that the IMF encouraged governments to strive for.
Such bold policies are key because they convince the markets that the economic crisis is being dealt with in an effective manner, which leads to “a revival in business and consumer confidence,” according to the WEO report.
Another issue the WEO has become concerned about is in regards to deflation, or a consistent decrease in the prices of all goods with the exception of food and energy.
The reason deflation becomes so dangerous is that it drives down the prices of goods as people perpetually hold off on buying any goods until they deem that they have reached their lowest level. Thus, commodity prices fall, which ripples throughout the economy.
Economists point to deflation, as the root cause of exacerbating already destructive economic crisis, like in Japan in the 1990s and throughout the world during the Great Depression in the 1930s.
“An indicator of global deflation risk has now risen to well above levels observed in 2002-03, when deflation was also a concern,” according to the WEO.
But, as frightening as this deflation crisis sounds, the IMF believes that it remains but a problem on the distant horizon, which must be overlooked when dealing with problems that are more pertinent in the present, like stimulation of the economy.
Regardless of the morose news, Blanchard remained upbeat, when he said “The need for strong policies on both the macroeconomic and financial is as acute as ever, but with such policies in place there is light at the end of the tunnel. World growth can turn positive by the end of this year and unemployment by the end of next year.”
by Christina Lovato, University of New Mexico-Talk Radio News Service
This afternoon Speaker Nancy Pelosi along with Congressmen Henry Waxman (D-CA), and Ed Markey (D-Mass.), released a draft of comprehensive energy legislation, known as the American Clean Energy and Security Act of 2009.
Speaker Pelosi says the act will create jobs, help end our dangerous dependence on foreign oil, and combat global warming.
“We have an obligation to future generations to preserve this planet and a moral obligation to preserve it as God’s creation,” said Pelosi.
Speaker Pelosi said today that the climate crisis we are facing is not only an environmental health issue, but that it is a national security issue and a moral issue.
“Energy independence and fighting climate change are flagship issues for this Congress. It will also be the impetus for new jobs and a new economic revival for our country,” said Pelosi.
Rep. Markey said that we need to look at this legislation as a good opportunity and if it gets passed it can create 3 to 5 million jobs all across the country.
“The planet is running a fever but there are no emergency rooms or plans so we have to act in a preventative way.”
Rep. Waxman said that Congress has a unique historic opportunity to pass legislation that will make our country more energy independent so that we can protect our national security.
Waxman said “This legislation will try to avert the terrible consequences of global warming…. legislation that will renovate and transform our economy for many many new jobs to give our people the jobs they need to get out of this recession/depression.”
Roger Johnson, the National Farmers Union President said that the union wants to be sure to play a constructive role with this legislation and said that there are already 3600 members doing innovative, and advanced agricultural practices to reduce greenhouse gases.
“Earth Day is something farmers celebrate every day of the year as we work the Earth and we want to make sure that it continues to be protected,” said Johnson.
The bill is expected to pass in the Full Energy and Commerce Committee on Energy before the Memorial Day recess at the end of May.
“On this Earth Day we commit ourselves, not just ourselves, but our nation, to protecting our planet, creating jobs for our workers and by passing clean energy legislation,” concluded Pelosi.
Domonique Strauss-Kahn, chairman of the International Monetary Fund, applauds governments for being proactive in stopping financial crisis through stimulating the economy. However, the governments must continue to act in this manner or the world faces the fate of a longer and deeper recession. Also, he stresses how the International Monetary Fund is key to guiding world out of the recession. (0:28)
Bank runs and soup lines that once stretched around the neighborhood during the Great Depression of the 1930s remain atypical today, even during the worst economic crisis of the last 70 years. “The current economic recession is unquestionably severe, it pales in comparison with what our parents and grandparents experienced in the 1930s,” said Christina D. Romer, the Chair of the President’s Council of Economic Advisors. Even at the worst point in the current recession, unemployment has only reached 8.1 percent, which stands in stark contrast to the nearly 25 percent seen during the 1930s. Therefore, Romer believes, that no matter how severe the economic recession is presently, America is no where close to entering another depression.
Romer attributed the cause of the current recession to modern innovations such as derivatives, which led to a direct relationship between asset prices and severe stress in financial institutions. “A reliance on such insecure and volatile assets caused the failure of financial institutions, which led a drying up of credit, which America so desperately needs,” said Romer.
Additionally, Romer complimented the Obama administration for passing the American Recovery and Reinvestment Act, and called it the “biggest and boldest countercyclical fiscal action in history.” Also, Romer noted the lack of bank runs and attributed this to the Federal Deposit Insurance Company, which was created as part of the New Deal.
Remaining optimistic, Romer stated that due to the quick and well-conceived response of the Obama Administration, “there is every reason to believe that we will weather this trial and come through stronger than before.” Senator Sherrod Brown (D-Ohio) echoed such beliefs, when he exclaimed that “the United States recovered from the Great Depression and we will recover from today’s recession.”
The Senate Health. Education, Labor, and Pensions Children and Families Subcommittee held a hearing on the reauthorization of the Child Abuse Prevention and Treatment Act (CAPTA). Senator Chris Dodd (D-Conn.), Chairman of the Subcommittee, said that the Act provides grants to programs to prevent and treat child abuse, among many other things. He said that rates of physical abuse of children in the past few years have gone down, while rates of neglect have remained high. He added that half of child abuses cases involve domestic violence and that the very youngest children are the most abused and neglected. (more…)
Barbara Romberg, founder and president of the Give an Hour Foundation, says that among troops returning from Iraq and Afghanistan, approximately 40 percent of soldiers, a third of Marines, and half of the National Guard members report psychological difficulties. She also says that according to a study by the RAND Corporation, some 300,000 troops are suffering from depression and post-traumatic stress disorder, and an additional 320,000 troops are suffering from traumatic brain injuries, but that only half have sought treatment. (1:27)
