It is officially known as the Restoring American Financial Stability Act of 2010. 

Purpose and content

The purpose of the new law strives to protect both consumers and economic stability.  It awards the government new powers to dissolve failing companies or break up companies that threaten the economy, creates a new agency to shield consumers, and focuses more light on the financial markets that previously escaped the oversight of regulators.

The president attempted to put the complex law in consumer-oriented terms for the average person.   He said it would help root out fine print and hidden fees for people, and provide deeper analysis of the sophisticated financial transactions on Wall Street. 

He claimed that this crippling recession was primarily caused by a breakdown in the financial system that cannot happen again.

There are many good provisions in the bill. The best characteristic of the bill is the provision to permit free markets to work and allow mismanaged financial firms to fail rather than require taxpayer bailouts adding to the federal deficit. 

The law assembles a council of regulators to look out for risks across the finance system.

• On the consumer level, borrowers will be protected from hidden fees and abusive terms, but must provide evidence that they can repay their loans.  Retailers will have a choice of at least two networks on which to run debit cards, introducing competition where there was none.  Retailers may also decline debit card use for small purchases where fees exceed profit. 
• On the banking level, a council of regulators will monitor bank solvency levels, make them increase their reserves when necessary and move the reserves into investments easily converted to cash.  They will also identify failing financial institutions, dissolve them before they trigger a crisis, and spread the costs incurred across surviving peers. 
• On the government level, the Federal Reserve will be awarded new powers through a consumer protection bureau that will write new rules to protect consumers from unfair credit card and mortgage terms, but also live under expanded congressional oversight.  The bureau will also establish procedures for liquidating giant financial firms where necessary, so there are no more “too big to fail” financial institutions. 
• The law restricts banks owning hedge funds (3% maximum of capital) from trading for themselves in their own accounts (which allows betting against themselves if more profitable).  This has become known as the “Volker Rule” (proposed by former Federal Reserve Chairman Paul Volker. 
• Financial institutions must separate their commodity derivatives trades into a separately capitalized entity completely walled off from federally insured deposits.  This will moderate the amount speculators profit when trading crude and heating oil contracts. 
• Other provisions include the Commodity Futures Trading Commission (CFTC) authority to regulate swaps, OTC, energy-related and electronically traded transactions by closing the so-called “Enron swaps” and “London” or “foreign-exchange” loopholes. 

Many of the law’s features won’t be in effect until regulators write new rules and implement them.

Obama explained them all as common sense reforms that will help people in the financial aspects of their daily life, from being made aware of risks, to understanding fees and signing contracts.  He called the reforms “the strongest consumer protections in history,” and said, “Because of this law, the American people will never again be asked to foot the bill for Wall Street’s mistakes.” 

“I proposed a set of reforms to empower consumers and investors, to bring the shadowy deals that caused this crisis into the light of day, and to put a stop to taxpayer bailouts once and for all,” Obama said to supporters. “Today, thanks to a lot of people in this room, those reforms will become the law of the land.”

Republicans against

The House first passed a bill in December 2009. After months of disagreement, the Senate passed a bill in May 2010 pretty much along party lines with only four Republicans joining to gain the required votes.

It took the whole month of June for the House and Senate to work out the differences.  The conference committees voted strictly along party lines, 20-11 with House negotiators and 7-5 for Senate negotiators, . 

The House passed the final bill on June 30, by a vote of 237-192, with all but three Republicans in opposition. 

The Senate passed the bill on July 15, by a vote of 60-39 with all but three Republicans voting against the legislation.

One Democratic Senator, Russ Feingold (D-WI), opposed the measure, saying it did not go far enough.

In spite of some misgivings, Republican Senators Olympia Snowe (R-ME) and Scott Brown (R-MA) joined with Susan Collins (R-ME) as three crucial votes for passage.

“While not perfect, the legislation takes necessary steps to implement meaningful regulatory reforms, create strong consumer protections and restore confidence in the American financial system,” Senator Snowe said in a statement. 

Republicans are attempting to capitalize on the wave of voter disillusion with current Members of Congress with regard to the slowness of recovery and the growing debt and deficit of the government.  By voting against any issue that increases debt (and implied to raise taxes), Republicans are hoping to unseat their opponents. 

A few of those issues are state education, unemployment benefits and health care.

By admission and by action, Republicans are delaying any Congressional movement they can, because it means to some extent, destroying or eroding any accomplishments by Democrats.  Republicans are heavily lobbied and their campaigns heavily supplied by big business interests, and that is whom they obey.   

Republicans vote as they are told.

Congress’s approval rating is at a staggering low of 19% (July 16, 2010).

~~~~~

July 19, 2010: Lawmakers battled for weeks over extending unemployment benefits to workers who have been unemployed for more than six months. The previous extension expired on June 2, leaving about 2.5 million people without benefits.

The House had passed a bill extending their benefits through November 2010.  However, with the recent death of Sen. Robert Byrd, Senate Democrats didn’t have the 60 votes they needed to overcome a Republican filibuster.

President Obama said lawmakers’ obligation to extend benefits is both moral and practical, citing some economists who believe extending unemployment insurance is one of the most cost-effective ways to jump-start the economy because it puts money in the pockets of people who are likely to spend it quickly.

The $34 billion needed to extend benefits would be borrowed, adding to the nation’s mounting debt. Republicans said they would only support extending benefits if the bill were paid for. 

Republicans have tuned into the issue of voter’s concern over debt and deficit and are looking to gain favor with them in the upcoming election. 

Republican leaders say they’re happy to vote, as long as they get a chance to change the bill to their liking.

This is an example of how Republicans are simply against anything proposed by Democrats.  In issues past, Republicans have often said they would rather increase debt than taxes.  With this issue, they are changing again, just to slow any Democratic progress.

~~~~~

July 22, 2010:  Update. 

President Obama signed into law today a restoration of benefits for people who have been out of work for 26 weeks or more after Congress approved the measure earlier in the day. 

The lump-sum retroactive payments will be delivered in the next week or two to state-issued debit cards or beneficiary bank accounts.

The Senate approved the bill on July 21 after Democrats agreed to break off the unemployment benefits from a larger jobs bill targeting $24 billion to help state governments slow layoffs and cut taxes, and provide a health insurance subsidy for the unemployed. 

After it became a standalone bill, the unemployment benefits enlisted support from Republican Maine moderates Susan Collins and Olympia Snowe.  The 60^th vote was cast by Senator Robert Byrd’s replacement, Carte Goodwin (R-WV). 

All Republican Senators except the two Maine moderates voted against the unemployment benefits again as a unified bloc. 

Less than a day later, the unemployment benefits bill was sent to the House where it was passed 272-152 with the help of 31 Republicans crossing party lines and sent to the president for his signature. 

Earlier this year, Republicans twice allowed temporary unemployment measures to pass without asking for a roll call vote, but debt and deficits are becoming issues with voters, and Republicans looking for reelection are looking to win favor with them. 

After signing the bill into law, the president said in a statement, “Americans who are fighting to find a good job and support their families will finally get the support they need to get back on their feet during these tough economic times.”   

Employment Situation:

Total nonfarm payroll employment declined by 125,000 workers in June, reflecting a decrease of 225,000 temporary employees in the Census 2010 segment as the project comes to an end. 

Private sector employment changed little (+83,000). 

The unemployment rate edged down to 9.5 percent.

Employment status:

The Civilian labor force represents employed and unemployed workers. 

–Current: 153.7 million; one year ago: 154.7 million. 
–Employed workers — current: 139.1 million; one year ago: 140.0 million.
–Unemployed workers — current: 14.6 million (9.5%); one year ago: 14.7 million (9.7%).

In between, the unemployment rate rose to 10% for the last three months of 2009.

There have been steady increases to the Civilian labor force since the start of 2010 (153.2 million). 

Payroll employment decreased by 4.5 million jobs in 2009, wiping out all the jobs created in the private sector over the last decade. 

Total unemployment peaked at 15.7 million (10.1%) in October 2009 rising from 7.7 million (5.0%) in December 2007 and from 11.6 million (7.6%) in January 2009. 

In a healthy economy, around 125,000 jobs a month must be added and filled just to keep the unemployment rate stable. 

The government goal of 8 percent unemployment would mean 12.4 million looking for jobs. 

As consumer and business confidence improves, more workers start to look for jobs again, returning to the workforce in anticipation of better employment conditions, which drives the unemployment rate higher.  On the other side, workers drop from the work force for a number of reasons including giving up looking for work.

In addition, 1.6 million college graduates joined the Civilian labor force, with last year’s graduates still scrambling to land jobs.

Household Survey Data

Nonfarm payroll employment decreased by 125,000 in June (reflecting a decrease of 225,000 temporary Census workers [net +83,000]) after a big increase in May (+433,000 [revised] including an increase of 411,000 temporary Census workers [net +22,000]), April (+313,000 [revised]) and March (+208,000 [revised]) and holding nearly level in February (+39,000 [revised]) and January (+14,000).  This followed a big drop in December (-109,000), and a boost to prepare for the holiday season in November (+64,000) following a big drop in October (-224,000).  

The quarterly average nonfarm payroll job data has been improving steadily over the last nine months with three-month averages at: April through June 2010 (+207,000), January through March 2010 (+87,000), and October through December 2009 (-89,667). 

The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) was 8.6 million.  These persons had their hours cut back to 34 hours or less or were unable to find full-time jobs.  Previous month part time figures have held relatively steady since March 2009 at 9 million.

The number of persons marginally attached to the labor force was 2.6 million.  These are workers who wanted and were available for work, and had looked for work sometime in the last 12 months.  They had not looked for work in the last 4 weeks and so were not considered part of the labor force. 

Among the marginally attached workers, the number of discouraged workers was 1.2 million.  These are persons no longer looking for work.  The peak was 1.2 million, reached in February 2010.         

The average duration of unemployment has risen to 35.2 weeks.  A year ago it was 24.4 weeks. At the start of the recession the average length of unemployment was 16.5 weeks.

Long-term unemployed persons (jobless for 27 weeks and more) remained at 6.8 million.  This is more than five times the number at the start of the recession in December 2007 (1.3 million).   In 2009 alone, 3.5 million were added to that number.  Four in ten (45.5%) unemployed persons are in this category. 

Establishment Survey Data

Construction lost 22,000 jobs in June, nearly erasing last month’s gain. Previous month changes were May (+30,000), April (+22,000 [revised]), March (+26,000 [revised]), February (-64,000), January (-77,000), December (-32,000), November (-15,000) and October (-67,000).

The quarterly average construction job data has been improving with three-month averages at: April through June 2010 (+10,000), January through March 2010 (-38,333) and October through December 2009 (-38,000). 

Currently, there are 5.6 million construction jobs. A year ago, there were 6.0 million.  In December 2007, there were 7.39 million.   

Manufacturing gained 9,000 jobs in June.  Previous month changes were May (+32,000), April (+38,000), March (+17,000), February (+1,000), January (+20,000), December (-23,000), November (-25,000) and October (-57,000).  

The quarterly average manufacturing job data has been improving steadily over the last nine months with three-month averages at: April through June 2010 (+26,333), January through March 2010 (+12,667) and October through December 2009 (-35,000). 

Currently, there are 11.67 million manufacturing jobs. A year ago, there were 11.78 million.  In December 2007, there were 13.73 million. 

Retail trade lost 6,600 jobs in June.  Previous month changes were May (-10,900), April (+14,400), March (+22,800), February (+7,100), January (+49,100), December (-14,500), November (+8,800) and October (-63,000). 

The quarterly average retail job data has been relatively steady over the last nine months with three-month averages at: April through June 2010 (-1,033), January through March 2010 (+26,333) and October through December 2009 (-22,900). 

Currently, there are 14.44 million retail trade jobs. A year ago, there were 14.55 million.  In December 2007, there were 15.566 million.   

Professional Business Services gained 46,000 jobs in June.  Previous month changes were May (+25,000), April (+70,000), March (+1,000), February (+56,000), January (+23,000), December (+22,000), November (+106,000) and October (+11,000). 

The quarterly professional business services job data has been steadily improving over the last nine months with three-month averages at: April through June 2010 (+47,000), January through March 2010 (+26,667) and October through December 2009 (+46,333). 

Currently, there are 16.7 million professional business services jobs. A year ago there were 16.5 million.  In December 2007, there were 18.1 million.  This is one of the currently largest job growth fields.

Temporary help services added 20,500 jobs in June, and 345,200 jobs in the last 12 months. 

Currently, there are 2.1 million temporary help services jobs.  A year ago, there were 1.6 million.  In December 2007, there were 2.6 million.     

Education and Health Services gained 22,000 jobs in June.  Previous month changes were May (+20,000), April (+28,000), March (+45,000), February (+32,000), January (+16,000), December (+26,000), November (+31,000) and October (+35,000).   

The quarterly average education and health services job data has been improving steadily over the last nine months with three-month averages at: April through June 2010  (+23,333), January through March 2010 (+31,000) and October through December 2009 (+30,667). 

Currently, there are 19.5 million education and health services jobs. A year ago, there were 19.2 million.  In December 2007, there were 18.6 million.  This is one of the currently largest job growth fields.

Government employment (federal, state and local) lost (net) 208,000 jobs in June.  Of the jobs ended by the federal government, 225,000 were temporary jobs for the U.S. Census.  The Census 2010 jobs will last through mid-July. 

Previous month changes were May (net+400,000), April (+72,000), March (+50,000), February (-23,000), January (-2,000), December (-26,000), November (-11,000) and October (+38,000).   

The quarterly average government employment (federal, state and local) jobs have been growing over the last nine months with three-month averages at: April through June 2010 (+88,000), January through March 2010 (+8,333) and October through December 2009 (+333). 

All government (federal, state, local, U.S. Postal Service): Currently, there are 22.77 million jobs. A year ago, there were 22.57 million.  In December 2007, there were 22.377 million. 

Federal government (except U.S. Postal Service): Currently, there are 2.55 million jobs. A year ago there were 2.1 million.  In December 2007, there were 1.974 million. 

U.S. Postal Service: Currently, there are 654,900 jobs.  A year ago, there were 703,900.  In December 2007, there were 781,300.   

State governments education: Currently, there are 2.385 million jobs. A year ago, there were 2.366 million.  In December 2007, there were 2.327 million.   

State governments (excluding education): Currently, there are 2.774 million jobs. A year ago, there were 2.811 million.  In December 2007, there were 2.813 million.   

Local governments education: Currently, there are 8.008 million jobs. A year ago, there were 8.094 million.  In December 2007, there were 8.053 million.   

Local governments (excluding education): Currently, there are 6.394 million jobs. A year ago, there were 6.484 million.  In December 2007, there were 6.429 million. 

The good news from this data is that overall, the job gains are increasing. 

Unemployment spreads stayed relatively the same with the highest among teenagers (25.7%), followed down by African-Americans, then Hispanics.  The lowest unemployment started with Asians (7.7%) followed up by Adult women (7.8%), Whites then Adult men (9.9%). 

Average weekly hours and overtime

The average workweek for all employees remained consistent at 34.1 hours. 

The average hourly and weekly earnings for production and non-supervisory employees in June held at $19.00 with weekly earnings at $634.60. 

These figures closely correlate with overall output and when workweek hours increase give clues when firms will start hiring. 

Civilian labor force

The total Civilian labor force rose to 153.7 million from the 153.2 million at the start of 2010.  This indicates a mood elevation for workers re-entering the work force who had given up looking for work and now have hope that there are jobs for them. 

The Civilian labor force usually grows as a recession winds down and optimism about finding work grows.  

The employment population (the number of the country’s working-age population that is employed) is at 139.1 million, up from the 138.3 million at the start of 2010.  This number will grow as jobs are created and the unemployment rate recedes.

Comparing the present with the final month of the last major downturn in November 1982, the total Civilian labor force then stood at 111.1 million.  In that month, there were 11.9 million people unemployed accounting for 10.8% of the available work force (average for the year was 10.6 million unemployed with the rate at 9.7%).  The average for 2009 was 9.3%, increasing from 7.7% in January to 10.1% in December.

Looking at jobs needed to reduce unemployment
with the total Civilian labor force at 153.7 million:

(r)=revised

To restore employment to the 5.5% level of 2008, 6.1 million people will have to regain their job or start new a job.   

Ed.Note:  Government and economists foretell that the “normal” unemployment rate will move up to 8% from its current 5.5% level.  With the current Civilian labor force, that means that on a permanent basis there will be roughly 12.4 million people unemployed. 

Fastest growing occupations and Occupations with the largest job growth

It comes as no surprise that the fastest growing occupations in 2008 and projected to 2018 are in the fields of network systems and data communication and all aspects of the medical field, followed closely by financial examiners (accountants, auditors, etc.). 

The largest job growth fields also include office and administrative support jobs, sales and service jobs, teachers and jobs in construction and transportation.

Education and compensation go hand in hand.  

Data collection:

The Census Bureau surveys 60,000 households across the country to insure an accurate demographic survey.  This translates into about 110,000 individuals.  All the counties and county-equivalent cities are grouped into 2,025 geographic sampling units.  824 of these units are selected to accurately represent the entire population of the United States.  For a detailed explanation, see the BLS Handbook of Methods. 

Each month, one-fourth of the interviewed households are rotated out.  They rejoin the sample after eight months, are interviewed for another four months, and then are rotated out forever. 

Each month, 2,200 highly trained Census Bureau employees conduct interviews in the sample households for information on labor force activities (job holding and job seeking) or non-labor force status of household members. 

This sampling method results in a 90+ percent probability that the results will be within 290,000 of the 153.7 million workers in the Civilian labor force.  A monthly total census would be cost-prohibitive. 

Questions are specifically formulated so that neither the interviewer nor the persons interviewed decide their labor force classification.  This prevents the sample from being distorted by respondents providing answers based on their opinion or what a “right” answer should be. 

The basic concepts of employment are: 

The unemployment rates are extrapolated from the survey results. 

The quoted unemployment rate excludes people who have stopped looking for work because they believe no jobs are available (discouraged workers) and others outside the labor force.  They are counted separately. 

Stimulus (Recovery Act):

The president credits his $787 billion stimulus package of tax cuts and increased government spending with improving employment.   He hopes to create about 3.5 million jobs.  Lower estimates put that figure at 2 to 2.5 million jobs by the end of 2010, reducing the unemployment rate to 8+%. 

The Fed’s record-low interest rates, along with other moves to drive down loan rates and stimulate borrowing, have supported the economic rebound.

The White House Council of Economic Advisers released a report showing the plan would save or create 1.5 million jobs by the end of 2009 and 3.5 million by the end of 2010. 

A senior White House official stated that the Obama administration’s fiscal stimulus plan will meet their previous estimates to save 3.5 million U.S. jobs by the end of 2010.  White House officials have been careful to point out that estimated jobs created and saved have merely slowed continued job losses.

The president sent The Small Business Jobs and Wages Tax Cut to Congress on January 10, 2010 to try to stimulate more hiring.  It focused on small businesses, because as the president stated, “Over the past fifteen years, small businesses have created roughly 65 percent of all new jobs in America.”  The proposal included:

• Businesses will receive a $5,000 tax credit for every “net” new employee that they employ in 2010, capping at $500,000 per firm (and $250,000 for new firms) to ensure that the majority of the benefit goes to small businesses.
• Small businesses will be reimbursed for the Social Security payroll taxes they pay on real increases in their payrolls. Specifically, firms that increase wages, expand hours or hire new workers would get a credit against the added payroll taxes that result. This bonus would be based on Social Security payrolls, up to the individual taxable maximum of $106,800.
• Firms can claim the credit on a quarterly basis, returning money quickly to businesses, providing an early incentive to hire and increase payrolls.
• The Recovery Act tax incentives will be extended for depreciation of capital spending.
• There will be increased loan guarantees from the Small Business Administration (SBA), and an elimination of SBA fees. 
• There will be increased investments in roads, highways, bridges and other construction, and grants to state and local governments to create jobs and avoid layoffs

President Obama noted that this proposal would be worked into the various other proposals that have already advanced in Congress, such as The HIRING Act of 2010 and The Jobs for Main Street Bill of 2010. 

Because the Troubled Asset Relief Program (TARP) program is costing less with fewer losses than expected, as much as $200 billion has been freed up to pay for other parts of the jobs program, without increasing projected federal deficits. 

Stimulus spending by state 

As of June 23, 2010, of the
$336,069,071,636 announced,
$401,449,935,194 (119.5%) has been made available
$251,386,487,383 (74.8%) has been paid out to the states

Recession histories:

With Nov 1982 unemployment at 10.2%, and the government taking aggressive action, it was still more than five years (April 1988) from the peak before unemployment receded to 5.4%. 

The approach that time, however, was to fix the economy at the expense of the worker.

Some compare the fall in employment to 1974-1975 and 1981-1982. If the comparison is accurate, the peak in unemployment may be reached within the next four to five months (past performance is no guarantee of the future).

Economist William Polley made a chart that includes every recession since World War II.  It makes the chart pretty hard to read, so he simplified it with selected post-WWII recessions.

William Polley’s chart shows how the recovery from the 2001 recession took four years for employment to return to its February 2001 peak. 

Using the Department of Labor unemployment tables of unemployment rates and 5.5% as the “normal” rate of unemployment, I have analyzed things a little differently.  Of course, along the way, the Civilian labor force increases, so the percentages represent ever more workers.

The following table shows unemployment start dates, peaks and returns to the normal rate of 5.5%, Civilian labor force in millions of workers for that year, and the lengths of times from the start date in months:

Recession peaks 1974-2010 

Note that the unemployment peak period that started in 1974 and ended in 1979 (lasting nearly five years) was followed immediately by another peak period ending nearly nine years later.  By the end of that period, the work force had increased by more than 32%, meaning overall, almost 30 million new jobs had to be created.

 The aggressive increase in the Civilian labor force in that period can likely be attributed to post-World War II babies reaching adulthood, with some entering the labor force after secondary school and the rest entering the workforce after further education.

The periods from 1988 to 1990 and 1995 to 2008 were periods of prosperity, with low unemployment (but a building bubble). Here is the same data in graphic form:

Unemployment rates:
It is interesting to recognize that in most cases, unemployment peaks roughly one-third of the timeline for unemployment to return to its “normal” rate, so we can double the number of months from the Start to the Peak to expect to arrive at an approximate return to “normal.”

We live in hope (again, past performance is no guarantee of the future).

He has been called “the soul of the Senate”

Byrd was West Virginia’s senior senator and the longest-serving member of the U.S. Congress, serving continuously for 56 years. He served in the U.S. House of Representatives from 1953-1958. He served in the Senate since 1959. 

In 2006 and with 64 percent of the vote (he never received less than 64 percent of the vote), Sen. Byrd won an unmatched ninth term in the Senate just months after exceeding South Carolinian Strom Thurmond’s record as its longest-serving member. Another record was his more than 18,500 roll-call votes. 

On Nov. 18, 2009, Byrd surpassed Sen. Carl Hayden, D-Ariz., to become the longest-serving member of Congress in U.S. history. The title now belongs to Sen. Daniel Inouye, 85, of Hawaii, now takes the role of Senate president pro tempore as the person with the most seniority. 

Byrd was president pro tempore of the Senate at the time of his death, which put him third in line to succeed the president and vice president should they have been killed or forced from office. That seat is the second-highest-ranking seat in the U.S. Senate (behind the vice president who serves as Senate president) and the highest-ranking senator. Byrd had been president pro tempore since January 2007.

Byrd’s 51 years in the Senate made him at the time, the longest-serving senator in history, while his white hair, impassioned, oratorical voice delivering colorful speeches citing Roman emperors gave him the presence of a man from a grander, distant time.

In an ever more technology-driven political world, Byrd was seen by some as a person from an earlier time. He often apologized for his early views on race and, in recent years, became one of the most reliably liberal votes in the Senate.  He used his mastery of Senate rules and a taste for tough hard-line tactics to become a passionate and often feared advocate for the state and the Senate he loved. 

Byrd always carried a pocket edition of the U.S. Constitution in his suit pocket.  Brandishing his copy, he resisted any attempt to diminish the role of the Senate. 

Robert Carlyle Byrd was born Nov. 20, 1917, in North Wilkesboro, N.C., as Cornelius Calvin Sale Jr., the youngest of five children. 

Before he was 1, his mother died and his father sent him to live with an aunt and uncle, Vlurma and Titus Byrd, who renamed him and moved to the coal-mining town of Stotesbury, W.Va. He didn’t learn his original name until he was 16 and his real birthday until he was 54. 

His parents inculcated Byrd in “the typical southern viewpoint of the time.” 

He belonged to the Ku Klux Klan in the 1940s and filibustered the Civil Rights Act of 1964, but he went on to endorse the nation’s first black president. An orphan child who rose from West Virginia poverty, he became a master of pork-barrel politics, and his name graces federal buildings throughout his home state. 

Byrd became popular for his fundamentalist Bible lectures and the Klan suggested he run for office. He first ran for the West Virginia state House of Delegates in 1946, and in his first campaign he lured voters to his speeches by singing and playing mountain bluegrass tunes on his fiddle. 

His fiddle became a fixture.

Byrd graduated valedictorian of his high school class in 1937 but could not afford college. In a measure of his persistence later in life, he took a decade of night courses to earn a law degree in 1963, and completed his undergraduate degree in 1994 with correspondence courses.

After taking night classes while in Congress, he graduated from American University’s Washington College of Law in 1963. This was the first time in history that a sitting member of either House of the Congress has accomplished both beginning and completing the courses of study leading to a law degree while serving in Congress.  Byrd was awarded his Bachelor of Arts degree in political science, summa cum laude, by Marshall University in 1994.

Married in 1936 for nearly 69 years, to his high school sweetheart Erma Ora James, with whom he had two daughters, he pumped gas, cut meat and during World War II was a shipyard welder.

Sen. Byrd entered Congress as one of its most conservative Democrats. He was an early supporter of the Vietnam War, and his 14-hour plus filibuster against the 1964 civil rights bill remains one of the longest ever.

His views gradually restrained, mainly on economic issues, but he always sided with his state’s coal interests in confrontations with environmentalists.

Byrd’s love of Senate traditions inspired him to write a four-volume history of the chamber.

His latest cause was the abuse of filibuster and secret holds on legislation for personal agendas. 

“During this 111^th Congress in particular the minority has threatened to filibuster almost every matter proposed for Senate consideration.   I find this tactic contrary to each Senator’s duty to act in good faith.”

“Because this once highly respected institution has become overwhelmingly consumed by a fixation with money and media.”

“Now every Senator spends hours every day, throughout the year and every year, raising funds for re-election and appearing before cameras and microphones.  Now the Senate often works three-day weeks, with frequent and extended recess periods, so Senators can rush home to fundraisers scheduled months in advance.”

But Sen. Byrd’s driving purpose was protecting the Constitution. In 2004, he persuaded Congress to require schools and colleges to teach about the Constitution every Sept. 17, the day the document was adopted in 1787.

Sen. John Rockefeller (D-W.Va.) said “… he never forgot where he came from nor who he represented, and he never abused that power for his own gain.”

The passing of Sen. Byrd will not affect the balance of power in the Senate. West Virginia Governor Joe Manchin, a Democrat, intends to appoint a replacement senator to serve out the remainder of Byrd’s term, which ends in 2012.  At issue with the state’s succession law, is whether the appointment will last through the end of this year (with a special election for the seat this year) or through 2012 (when Byrd’s term expires).

 Sen. Robert C. Byrd’s legacy is immense but what many don’t know is his musical background as an avid fiddle player.  He performed at the Kennedy Center, Grand Ole Opry and on the television show Hee Haw!  In 1978 he even recorded an album.

Just a few years ago he donated his favorite fiddle to the West Virginia Music Hall of Fame.

 ”I ran the Senate like a stern parent,” Sen. Byrd wrote in his memoir, Child of the Appalachian Coalfields.

“There are four things people believe in in West Virginia,” Byrd once said. “God Almighty, Sears Roebuck, Carter’s Little Liver Pills and Robert C. Byrd.”

“Mountaineers are always free”

Note:  Robert Byrd is of no relation to Harry F. Byrd and Harry F. Byrd, Jr., both former U.S. Senators from Virginia.

It is a well-known fact that the Republicans have been receiving their instructions from the health insurance companies, who heavily fund their re-election campaigns and who do not want a health bill at all.  Revision means forcing them to insure millions of marginally healthy people as well as those with bad health records (pre-existing conditions). 

This time, the House passed the Senate bill without any changes.  Healthcare became law when the president signed it on Tuesday, March 23. 

To fulfill promises made to House lawmakers, reconciliation to the main healthcare bill was passed first by the Senate, then the House.  Republicans offered 40 amendments to the bill, in a final desperate attempt to change the bill enough to force the House to vote again, but Democrats steadily rejected each amendment. 

In the end, Republicans voted unanimously against the reconciliation, threatening to take the issue to their election campaigns to win enough seats to repeal healthcare.   

Every November, the entire House and one-third of the Senate are re-elected.  Many of the Republican amendments were specifically aimed for votes that could be made to sound embarrassing for Democratic lawmakers running for re-election. 

The main points of the healthcare legislation include:

• New consumer protections for denial of coverage based on pre-existing conditions (effective for adults in 2014, but children in 2010).  Adults currently with pre-existing conditions uninsured for a minimum six months can enroll in a temporary high-risk pool with subsidized premiums (effective June 2010).
• Lifetime coverage limits—eliminated (effective 2010).
• Coverage dropped after a sickness—prohibited. 
• Waiting period for coverage limited to 90 days.
• Child coverage under parents plan—extended to age 26 (effective September 2010).
• Individuals under age 30 without insurance can purchase catastrophic coverage on the new health insurance exchanges. 
• Coverage will be portable for employees that leave a job.
• Health insurance exchanges (effective 2014) will be created with minimum standards and competing plans available to pool risks for small businesses and uninsured individuals.
• New policies issued after September 2010 will fully cover preventive care visits and screenings.  Doctors will get paid for seeing uninsured patients they are now treating for free.
• Businesses with fewer than 25 employees will be eligible for tax credits for up to 35 percent of health insurance premiums paid.  Pooling risks with other small businesses will stabilize costs. 
• Employers will disclose the cost of workers health insurance on their W-2 (starting 2011)
• Medicare beneficiaries with the Part D drug benefit who fall into the coverage gap (“donut hole”) will receive a $250 rebate in 2010. Starting 2011, they will receive a 50% discount on brand-name drugs, with the gap closing by 2020. 
• Medicare members will not pay more than three times the average premium paid by a healthy younger person, even though middle-aged Americans use more than five times the amount of health services.   
• Medicare Advantage plan reimbursements will be cut back from benefits currently offered, which give members more choices than standard Medicare plans and cost about 15 percent more than the average Medicare plan. Some of these cuts would be offset by a new deal with drug companies to sell medications not covered by Medicare at half price.
• Medicaid will be expanded, making it available to an estimated 16 million more people with incomes up to one-third above the poverty income line, including adults without dependent children.  Community health centers will receive enhanced funding.
• Subsidies provided over the next 10 years for low to moderate-income people without employer health benefits will enable about 32 million uninsured to buy plans on health-insurance exchanges.
• Medical expense tax deduction threshold will be raised to 10% of adjusted gross income (effective 2013). Seniors (age 65 and older) would be able to claim an itemized deduction at the current standard of 7.5% (through 2016).
• Flexible spending health account rules remain the same for three years. A $2,500 cap on contributions (with cost-of-living adjustments) appears likely to go into effect in 2013.
• Health savings account penalty for withdrawing funds for nonqualified medical expenses increases to 20% (effective 2011).
• All citizens and legal residents will be required to have health insurance.  Subsidies will be on an income sliding scale up to 4 times the poverty line.  
• Fines will be imposed on those who decline health insurance (starting 2014); the higher of $95 or 1% of income, growing to $695 or 2.5% of income (2016).
• For individuals with earnings greater than $200,000 and married couples earning more than $250,000 the Medicare payroll tax will rise in the next two years to 2.35%. A new 3.8% Medicare tax will be applied to investment income (including interest, dividends and capital gains) that exceed those thresholds.
• For job-based “Cadillac” plans (annual premiums exceeding $10,200 for individuals or $27,500 for families), plan administrators will be taxed 40 percent (effective in the next few years). Limits are higher for certain high-risk jobs and retirees. 
• Fees will be imposed on insurance and pharmaceutical companies and medical device manufacturers (starting 2014). 
• Health plans will be required to report the proportion of premium dollars spent on clinical services, quality, and other costs and provide rebates to consumers.
• A new federal body will be created that would have power to block insurers from raising rates.
• Higher taxes will reduce the federal deficit by nearly $140 billion over 10 years. 

It does not include a public option to compete with private insurers.  

Read the bill at The Health Care and Education Affordability Reconciliation Act of 2010

In his address, there were many other accusations.  Personally, I prefer government lawmakers who accurately quote facts rather than half-truths, as opposed to working to sway their audience by half-truths and mud slinging that attempt to create fear. 

I respect that both sides have their own agenda and arguments, but I prefer to make up my own mind based on facts and findings.  Politicians rely on people adopting what they tell them without checking anything out, like that TV commercial where the car salesman says, “I have a note from the previous owner that this car runs great!”  

I am independent when it comes to politics, but I took exception to the content of this video.

It should be kept in mind that Senator Coburn manipulates his audience in this speech written for him by his party speechwriters.

It should be noted that Senator Coburn is also a medical doctor. 

A transcript of the address and a link to the video are included at the end of this post.  Make up your own mind. 

Coburn said, “By an overwhelming margin American people are telling us to scrap the current bills …”

“Public opinion on health care reform in the United States is mixed. A majority of Americans express a desire for health care reform because they see it as too expensive and because they perceive that insurance companies avoid meeting health costs through coverage exclusions, caps, and co-pays. They also express concern that the system as a whole does not cover everyone and that many people are under-insured or uninsured. A majority support the creation of a government-run insurance plan to compete with private insurers, known as a public option, and a significant majority support a single-payer health care system.”

2010 polling results: “Rasmussen Reports found Americans opposing the Congressional bills by a 15-point margin, 56% vs. 41%.  According to Rasmussen Reports in January 2010, 10% of the American public have withdrawn their support from leading Congressional proposals since June 2009, with a majority opposing them since November 2009. In June 2009, 50% were in favor vs. 45% opposed, but in January 2010, support had dropped to 40% and opposition had increased to 55%.

Hardly an overwhelming margin, and an unfounded inference that the plans should be scrapped.

Coburn said, “… will lead to a government takeover of Health Care …

This is a scare slogan, a tactic raising specters of communism and socialism and is simply untrue.  However, history has shown us, a lie repeated often enough will eventually be perceived as the truth. 

The legislation under discussion would extend coverage care to tens of millions of uninsured Americans while cracking down on insurance company practices such as denying coverage on the basis of pre-existing medical conditions.  This is what Republican critics attack as a government takeover of health care.  Insuring these “not-so-profitable” peopel will financially hurt their big business sponsors.    

Coburn said, ” … even before the summit took place the majority in Congress signaled its intent to reject our offers to work together.” 

I would be happy to hear what those signals were to make up my own mind.  What I continually hear is the majority asking the Republicans for input and ideas. 

Coburn said, “they want to use procedural tricks and backroom deals to ram through a new bill that combines the worst aspects of the bills the Senate and House passed last year.” 

Here is an introduction to the infamous “they,” meant to suggest the dark forces, linked to the previous specter of communism and socialism. 

Here also is the well-established three-punch rhetoric trick, meant to reinforce the evil things the dark forces will pull; (1) “procedural tricks and backroom deals”, (2) “ram through a bill”, (3) “combines the worst aspects of the bills … passed last year.” 

New York Times columnist Bob Herbert wrote almost the exact phrase. 

There are no procedural tricks in passing a bill according to Senate rules; just wailing from those who don’t get their way.  A procedural trick is a lone Republican, objecting to and stopping the extension of unemployment benefits to thousands, because he doesn’t like what it adds to the deficit.  A wave of procedural tricks are being prepared by Republicans to stop further progress on healthcare.  

As far as passing a bill that “combines the worst aspects of the bills … passed last year,” would it be too much to tell Coburn’s audience what they are?  No, because they are the worst to the Democrats, and perhaps only them.  

Coburn said, “The American people have rejected the majority’s plan for good reason.”

There’s that reinforcing rhetoric reference to the falsehood of the overwhelming rejection again.

 Coburn said, “Their plan includes 1/2 trillion dollars in new tax increases, a 1/2 trillion dollars in cuts to Medicare, job-killing penalties for employers, taxpayer-funded abortion and new boards that will ration care to American citizens.”

A half trillion sounds like much more than 500 billion, and it is meant to.  New taxes?  It depends on which vrsion of the healthcare plan that will be written into law.

The estimated cost over ten years per the Congressional Budget Office (CBO) would be $1,050 billion less $138 billion recovered ($912 billion) for the House plan, and $871 billion less $132 billion recovered ($739 billion) for the Senate plan or a middle figure of $825.5 billion.  Coburn plays on $1 trillion ($1,000 billion), but what’s $175 billion when you are trying to sway people’s opinion.

The several versions of healthcare plans moving around various committees in the House and Senate all have different approaches to pay for healthcare.

In the House version, the tax increases are targeted at the wealthy asessing a surtax on earners making from $280,000 to $800,000 (1 percent) or couples making $350,000 to $1 million (1.5 percent).  Earners making more  than those amounts would have a 5.4 pecent surtax.  Less than 2 percent of the U.S. population falls into those cateories.

This top earner tax is estimated to bring in about $540 billion over 10 years.

There is also expected to be a penalty tax on companies and individuals who refuse to buy government-approved healthcare.  This is to get everyone in the game, since the healthcare numbers work only with large pools of enrollees. 

We can assume that this is the “job-killing” penalties for employers.  The thought is that healthcare costs take away money for jobs.  The alternative might be more jobs without benefits, but it has been repeatedly proven that many people will turn down jobs without benefits. 

Ed.Note:  I am personally against forcing people to have health insurance, but one reeason healthcare costs are so high is that many people don’t take care of their health until they are wheeled into the Emergency Room on a gurney, which is enormously expensive, and costs us all.

The “½ trillion ($500 billion) in cuts to Medicare” are subtly presented as if they were to be cuts in benefits.  This purposely scares seniors by rearranging the words.  In truth, there will be reductions in the future growth of overall Medicare spending, which does not mean cuts in benefit levels or services. 

As far as “taxpayer-funded abortion”, in November 2009, the House passed an amendment to the pending health care bill that prohibits federal funds for abortion services in the public option and in the insurance “exchange” the bill would create.  The Senate bill will allow insurance companies to include abortion coverage, but each state will have the option of preventing federal money from funding abortions.  Senator Coburn is incorrect!

Regarding “new boards that will ration care to American citizens”, we can only guess Senator Coburn is talking about the independent advisory panels which will work to make recommendations on Medicare reforms, including reimbursement to contain the future growth of Medicare.  The Senate bill includes a Medicare Commission which could modify Medicare payments in order to keep down cost growth.

Perhaps he is talking also about “new boards” concerned with halting Medicare fraud.  $60 billion per year are paid out for fraudulent claims by phony companies billing for services never performed on valid Medicare members.  This is another scare tactic, presenting oversight boards as threatening to deny YOUR claim. 

As a side note, containing Medicare fraud for ten years would fund $600 billion of the cost.

According to PolitiFact regarding the rationing of care, “private health insurance companies already ration health care by income, by denying health insurance to those with pre-existing conditions and by caps on health insurance payments. Rationing exists now, and will continue to exist with or without health care reform.” 

David Leonhardt also wrote in the New York Times in June 2009 that rationing is a part of economic reality: “The choice isn’t between rationing and not rationing. It’s between rationing well and rationing badly.

This is another scare tactic, similar to Sarah Palin’s claim that end-of-life choices would be dictated by “death panels” rather than the discussions and planning with your personal physician, as it was written.

Coburn said, “The majority (meaning Democrats) now has a choice. We can continue to make progress like we did at the summit or they can try to ram through a partisan bill that will divide and bankrupt America.” 

Now here are “We,” the white knights again trying to do the right thing, while the evil “they” “try to ram through a partisan bill that will divide and bankrupt America.”

What Senator Coburn does not discuss is that without reform, America is well on its way to bankruptcy now.  But the lack of reform will keep his campaign funders in huge profits, draining the resources of the American people.  Coburn is telling an untruth.

Current spending (2007) on health care in the U.S. is about 16% of its GDP which converts to an estimated $2.26 trillion or $7,439 per person.  With its current upward trend it is expected to reach 19.5% of GDP by 2017 which converts to an estimated $2.75 trillion or $9,066 per person. 

Medical expenditure was a significant contributing factor in 62% of personal bankruptcies in the United States. 

“The Congressional Budget Office (CBO) has argued that the Medicare program as currently structured is unsustainable without significant reform, as tax revenues dedicated to the program are not sufficient to cover its rapidly increasing expenditures. Further, the CBO also projects that “total federal Medicare and Medicaid outlays will rise from 4 percent of GDP in 2007 to 12 percent in 2050.” “According to the Centers for Medicare and Medicaid Services, spending on Medicare will grow from approximately $500 billion during 2009 to $930 billion by 2018.” “And in 2009 the Congressional Budget Office found that the inclusion of a strong public option would lower the cost of health care reform in the U.S. by tens of billions of dollars.” 

Coburn said, “Last year dozens of Democrat-only summits were held in secret behind closed doors and produced many unsavory deals.” 

This is an allegation that requires dates and agendas to avoid people thinking it is simply mud slinging (which it is).  I’m sure Republicans don’t hold their meetings on street corners either, but like to portray Democrats as some sinister secret society.

The question arises, what were the unsavory deals?  Without particulars, this again is unsubstantiated mud slinging.  Coburn is working his audience.

Coburn said, “Had those meetings been open and bipartisan, I believe Congress could have passed a bipartisan health bill months ago. If the president and leaders in Congress are serious about finding common ground they should continue this debate, not cut it off by rushing through a partisan bill the American people have already rejected.” 

There’s that reinforcing rhetoric reference to the falsehood of the overwhelming rejection by the American people again, but he lends it credibility with his “I believe.”

A bipartisan health bill is an impossible goal.  Republicans want to defeat any healthcare bill and discredit the majority party.  The Republicans are in favor of and are funded by big businesses, which want the existing system to continue.  Continuing the debate will delay the action nearer the mid-term elections, when lawmakers who want to be re-elected will move away from a controversial bill.

Coburn said, “If the majority agrees to work together they will find many Republicans ready to help them pursue our common goal of helping all Americans access quality and affordable Health Care for themselves and their families.” 

It is odd that I hear from Washington, nothing except offers from the majority wanting to work together with the Republicans to pursue the common goal.  The difference is that one side wants reform and the other side wants things to stay the same.

The problem big business has with the healthcare plan is that the legislation under discussion would extend coverage care to tens of millions of uninsured Americans while cracking down on insurance company practices such as denying coverage on the basis of pre-existing medical conditions. 

The 46 million without health insurance might be less healthy than the people who work and can afford health insurance, and the people with pre-existing conditions certainly are.  This means that they will probably eat away at the bottom lines of the big business insurance carriers, and they will spend any amount of money buying lawmakers through campaign contributions to defeat it.

While there are two major proposals under consideration in Congress, Democrats have authored and passed both.  Republican Party members in Congress have not come together around a single policy of their own for health care reform other than that of opposing both Democratic bills currently in progress. 

Lawmakers were almost finished merging House and Senate versions of sweeping overhaul legislation when a special election in late 2009 in Massachusetts to fill the late Senator Kennedy’s seat cost Democrats their filibuster-proof Senate supermajority of 60 seats.

Republicans immediately united in opposition to both proposals, casting doubts on the outcome.

Lobbying: America’s health care industry has spent hundreds of millions of dollars in 2009 alone to block the introduction of public medical insurance and stall other reforms proposed by President Obama and by others. There are six registered Health Care  lobbyists for every member of Congress. The campaign against health care system reform has been waged in part through substantial donations to key politicians. The single largest recipient of health industry political donations and chairman of the Senate Committee on Finance that drafted Senate health care legislation is Senator Max Baucus (D-MT).

The clock is ticking toward the mid-term elections in November.  Make no mistake that that election day is the focus of our lawmakers – to continue in their prestigious jobs and build their party’s power base, and they respond without question to the big business campaign fund contributions that can get or keep them there – not the 46 million people without healthcare, and not the 100,000 people who die every year for lack of health insurance. 

It is shameful that our elected officials, and I include all, have forgotten whom they represent. 

Senator Coburn was contacted Friday (Feb 26) by the White House and asked to submit details of suggestions he made to tackle waste and fraud in the medical system, Coburn’s spokesman John Hart said Coburn views Obama’s legislation as a government takeover and would not be able to support it even if it includes some of his proposals.

~~~~~

Listen to the broadcast and make up your own mind.

http://news.yahoo.com/video/us-15749625/18361866

The transcript follows for your convenience. 

“This week I had the opportunity to join President Obama and my Democrat and Republican colleagues for a summit on Health Care.  We had a respectful and constructive discussion.  While we listened to one another, I’m concerned that the majority in Congress is still not listening to the American people on the subject of Health Care reform.  By an overwhelming margin American people are telling us to scrap the current bills, which will lead to a government takeover of Health Care and we should start over.

Unfortunately, even before the summit took place the majority in Congress signaled its intent to reject our offers to work together.  Instead they want to use procedural tricks and backroom deals to ram through a new bill that combines the worst aspects of the bills the senate and house passed last year.

The American people have rejected the majority’s plan for good reason.  Their plan includes 1/2 trillion dollars in new tax increases, a 1/2 trillion dollars in cuts to Medicare, job-killing penalties for employers, taxpayer-funded abortion and new boards that will ration care to American citizens.

The majority now has a choice. We can continue to make progress like we did at the summit or they can try to ram through a partisan bill that will divide and bankrupt America.

I wholeheartedly share President Obama’s desire for more civility and bipartisanship in Washington and I’m proud of the work we did together when he was a member of the Senate.

True civility however is measured by actions not words. I was disappointed the president rejected my suggestion that he host another summit; the president himself proposed that such meetings be televised more than a year ago.

Last year dozens of Democrat-only summits were held in secret behind closed doors and produced many unsavory deals. 

Had those meetings been open and bipartisan, I believe Congress could have passed a bipartisan health bill months ago. If the president and leaders in Congress are serious about finding common ground they should continue this debate, not cut it off by rushing through a partisan bill the American people have already rejected. 

If the majority agrees to work together they will find many Republicans ready to help them pursue our common goal of helping all Americans access quality and affordable Health Care for themselves and their families.”

References:

Health care in the United States
Health care reform in the United States
Health care reform debate in the United States
Public opinion on health care reform in the United States
History of health care reform in the United States

The purpose of the CARD Act is to ensure that borrowers with a poor credit score and a history of late payments get treated as fairly as borrowers who have kept their credit record clean. 

Claims by credit card issuers that changes would lead to higher rates has been fulfilled.  Many issuers raised their interest rates and fees since the President signed the CARD Act on May 22, 2009.

In desperate attempts to take advantage of their customers before the new laws kicked in, credit issuers raised minimum payments and lowered credit limits for customers with bad credit, and closed accounts of customers who do not use their cards often and good payers who pay their entire balance each month.

The act does not limit how high interest rates can go and does not apply to business or corporate credit cards.

The Act was passed to beat several consumer-unfriendly practices, including:

• prohibiting credit issuers from arbitrarily changing the terms of their contract with a cardholder, the practice of “any-time, any-reason repricing.”
• requiring a customer option of a fixed credit limit, and preventing the credit issuer from charging over-the-limit fees.
• requiring 45 days notice before raising a customer’s interest rate.  The customer has three billing cycles to decline the new terms and pay off their balance at the old rate and payment schedule. 
• prohibiting rate increases on existing balances for fixed rate accounts or for universal default, which is a late payment on an unrelated account. 
• requiring the credit issuer to return customer to their previous interest rate after six consecutive months of timely payments.
• requiring a minimum of 21 days from the date the bill is sent out to the due date (increased from 14 days).
• requiring monthly due dates to be the same each month or next business day if a weekend or holiday. 
• requiring payments to be accepted as timely when paid before 5pm EST on the due date or mailed at lest 7 days before the due date. 
• prohibiting the charging of additional fees for payment methods including online, mail, electronic transfer, or telephone.  The exception is an expedited payment to avoid a late fee. 
• requiring payments to be applied to the highest-rate debt on the account. 
• prohibiting the charging of interest for payments made during a grace period.
• requires credit card statements to contain a schedule of time required and interest paid to pay off balance with minimum payments, and how much the payment must be to pay the balance off in three years. 
• requires the customer agree to either a hard credit limit, or approval with an over-the-limit fee applied and limits the number of over-the-limit fees to three.
• requires the up-front payment of all fees, before issuing of subprime cards, where fees will exceed 25 percent of the credit limit.
• Prohibits issuance of credit cards to minors under the age of 21 without a co-signer unless they can prove they are able to repay.  This will stop the issuing of cards to minors where parents are responsible for their debts until age 21. 

Although the idea was to treat poor payers as fairly as good payers, the Act caused credit issuers to treat all borrowers the same.  Credit issuers say they have no way of knowing who will lose their job, get sick or other financial situation that will cause payment default, so they will treat everyone the same.  They believe the past does not guarantee the future.

Credit issuers are continuing their research into ways they can apply fees that are not covered in the CARD Act.  Fixed-rate cards could be switched to variable rates that give the issuer more flexibility.  Card issuers may increase transaction fees to retailers, causing them to stop accepting those cards or raise prices.

Congress is working on more transparency and oversight of the credit issuers, requiring reports on company profits, fees and rates that will be presented to Congress each year. 

Banks are now focusing on increasing profits from debit cards, since credit has now been limited.  The best course is to use cash when possible and ask for a discount equal to the Merchant fee.

Employment:

The Unemployment rate fell in January to 9.7% from 10.0% in December.   

Nonfarm payroll employment held nearly level (-20,000) in January after a big drop in December (-150,000 [revised]), and a boost to prepare for the holiday season in November (+64,000 [revised]).  The December drop could substantially be the result of seasonal employees let go by retailers.  Previous month changes were October (-224,000 [revised]) , September (-225,000 [revised]), August (-211,000 [revised]), July (-344,000 [revised]), June (-504,000), and May (-347,000).  

The monthly average nonfarm payroll job layoff figures have been improving steadily over the last 9 months of January through November (-35,333), October through August (-220,000), and July through May (-398,333). 

In 2009, payroll employment declined by 4.5 million. Over the course of the year, job losses moderated considerably. In the first quarter of 2009, job declines averaged 752,667 per month, compared with 103,000 per month in the last quarter. 

Since the start of the recession in December 2007, payroll employment has decreased by 8.4 million, wiping out all the jobs created in the private sector over the last decade. 

Total unemployment dropped to 14.8 million (9.7%) after rising to 15.7 million (10.1%) in October 2009 from 7.7 million (5.0%) in December 2007 and from 11.6 million (7.6%) in January 2009. 

The numbers still indicate that companies are approaching their maximum “leanness” and sustain perceptions that the economy is approaching employment turnaround.

Unemployment is still the highest since April 1983.  In a healthy economy, around 125,000 jobs a month must be added and filled just to keep the unemployment rate stable.

The current rate is 9.7% and the number unemployed is at 14.8 million. 

This is the third consecutive month of unemployment holding steady.

The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) fell to 8.3 million in January from 9.2 million in December.  Previous month part time figures were November (9.2 million), October (9.3 million), September (9.2 million), August (9.1 million), July (8.8 million) and June (9.0 million).  

These persons had their hours cut back to 34 hours or less or were unable to find full-time jobs.  Since the start of the recession, the number of such workers has increased by 3.7 million, and has remained relatively constant since March 2009. 

January 2010 is the first month this number has declined (-849,000). 

Long-term unemployed persons (jobless for 27 weeks and more) have tripled since the start of the recession to 6.3 million since December 2007, adding 3.6 million to that number since January 2009.  Four in ten (41.2%) unemployed persons are in this category. 

The average length of unemployment has risen to more than 30 weeks, the longest on record since 1948.

Discouraged workers (persons no longer looking for work) rose to 1.1 million in January, up from 929,000 in December, 861,000 in November and 734,000 a year ago.  

This is the first month that number has exceeded 1 million.

Ed.Note: The number unemployed (and the unemployment rate) includes only those who looked for work in the last 4 weeks, and changes as the Civilian labor force population varies. 

The number unemployed contrasted with the changes in payroll employment is accounted for by workers no longer looking for work and therefore dropping out of the Civilian labor force. 

As consumer and business confidence improves, more workers will start to look for jobs again, returning to the workforce in anticipation of better employment conditions, which drives the unemployment rate higher.  On the other side, workers drop from the work force for a number of reasons including giving up looking for work.

Industry sectors and historical data

Construction lost 75,000 jobs in January, perhaps due to inclement weather and low temperatures.  Previous month changes were December (-32,000), November (-15,000), October (-67,000), September (-71,000), August (-64,000), July (-80,000), June (-91,000), and May (-59,000), with a total of 1.9 million since December 2007. 

The monthly average construction job layoff figures have been improving steadily, over the last 9 months of January through November (-40,667), October through August (-67,333) and July through May (-76,667). 

Manufacturing gained 11,000 jobs in January.  Previous month changes were December (-23,000), November (-25,000), October (-57,000), September (-48,000), August (-57,000), July (-43,000), June (-129,000), and May (-152,000) with a widespread job loss total of 2.1 million since December 2007, mostly in the durable goods industry. 

The monthly average manufacturing job layoff figures have been improving steadily over the last 9 months of January through November (-12,333), October through August (-54,000) and July through May (-108,000). 

Retail trade gained 42,000 jobs in January.  Previous month changes were December (-18,000), November (+9,000), October (-63,000), September (-43,000), August (-15,000), July (-53,500), June (-24,400), and May (-22,000). 

The monthly average retail job figures have been improving steadily over the last 9 months of January through November (+11,000), October through August (-40,333) and July through May (-33,300). 

Professional Business Services gained 44,000 jobs in January.  Previous month changes were December (+20,000), November (+109,000), October (+11,000), September (-22,000), August (-34,000), July (-48,000), June (-132,000), and May (-51,000). 

The monthly average retail job figures have been improving steadily over the last 9 months of January through November (+57,667), October through August (-15,000) and July through May (-77,000). 

Education and Health Services gained 16,000 jobs in January.  Previous month changes were December (+26,000), November (+31,000), October (+35,000), September (+26,000), August (+35,000), July (+21,000), June (+28,000), and May (+38,000). 

The monthly average education and health services job growth figures have been steady over the last 9 months of January through November (+24,333), October through August (+32,000) and July through May (+29,000). 

In a nonstop record of job growth, the health care industry has added 322,000 jobs in 2009.

Government employment (federal, state and local) lost 8,000 jobs in January.  Previous month changes were December (-27,000), November (-11,000), October (+38,000), September (-39,000), August (+4,000), July (-47,000), June (-52,000), and May (-13,000). 

The monthly average government employment (federal, state and local) job figures have been steady over the last 9 months of January through November (-10,000), October through August (+1,000) and July through May (-37,333). 

The federal government added 33,000 jobs in January including 9,000 temporary jobs for the 2010 Census and 14,000 jobs for the USPS, offsetting the 19,000 jobs the USPS downsized in December.  Except for education, state (-13,000) and local governments (-12,000) trended down.

Temporary help services added 52,000 jobs in January, adding to the 58,500 jobs in December, a net gain of 247,000 jobs since September 2009.

Unemployment spreads stayed relatively the same with the highest among teenagers (26.4%), followed down by African-Americans, then Hispanics.  The lowest unemployment started with Adult women (7.9%) followed up by Asians (8.4%), Whites then Adult men (10.0%). 

The good news from this data is that the job losses are lessening.  It is perhaps due to fewer jobs available to lose, but the lower figures are an encouraging sign. 

Average weekly hours and overtime

These figures closely correlate with overall output and when workweek hours increase give clues when firms will start hiring. 

The average manufacturing workweek remained unchanged at 39.9 hours with overtime at 2.8 hours. 

The average manufacturing hourly earnings remained steady at $23.19 for January.  Over the past 12 months average hourly earnings have risen 1.8%.  

Civilian labor force

The total Civilian labor force remained constant at 153.1 million (down 661,000 from November).  There are a million fewer workers in the work force than in January 2009 (154.1 million).   These are generally workers who have given up looking for work. 

The Civilian labor force usually grows as a recession winds down and optimism about finding work grows.  But as long as Americans remain anxious about their jobs, consumer spending is not expected to grow enough to power an economic rebound. 

The employment population ratio (the proportion of the country’s working-age population that is employed), at 58.4 percent, has declined by 4.3 percent since the recession began in December 2007.

Comparing now with the final month of the last major downturn in November 1982, the total Civilian labor force then stood at 111.1 million.  In that month, there were 11.9 million people unemployed accounting for 10.8% of the available work force (average for the year was 10.6 million unemployed with the rate at 9.7%). 

Looking at jobs needed to reduce unemployment
with the total Civilian labor force at 153.1 million:

(r)=revised

*To restore employment to the 5.5% level of 2008, about 6.4 million people will have to regain their job or start new jobs.  It is a tall mountain to climb. 

*Ed.Note:  Government and economists foretell that the “normal” unemployment rate will move up to 8% from its current 5.5% level.  With the current Civilian labor force, that means that on a permanent basis there will be roughly 12.2 million people unemployed — more than 5.8 million more than at the “normal” level today. 

Data collection:

The Census Bureau surveys 60,000 households across the country to insure an accurate demographic survey.  This translates into about 110,000 individuals.  All the counties and county-equivalent cities are grouped into 2,025 geographic sampling units.  824 of these units are selected to accurately represent the entire population of the United States.  For a detailed explanation, see the BLS Handbook of Methods. 

Each month, one-fourth of the interviewed households are rotated out.  They rejoin the sample after eight months, are interviewed for another four months, and then are rotated out forever. 

Each month, 2,200 highly trained Census Bureau employees conduct interviews in the sample households for information on labor force activities (job holding and job seeking) or non-labor force status of household members. 

This sampling method results in a 90+ percent probability that the results will be within 290,000 of the 153 million people in the Civilian labor force.  A monthly total census would be cost-prohibitive. 

Questions are specifically formulated so that neither the interviewer nor the persons interviewed decide their labor force classification.  This prevents the sample from being distorted by respondents providing answers based on their opinion or what a “right” answer should be. 

The basic concepts of employment are: 

The unemployment rates are extrapolated from the survey results. 

The quoted unemployment rate excludes people who have stopped looking for work because they believe no jobs are available (discouraged workers) and others outside the labor force.  They are counted separately. 

Their number has nearly doubled in the previous 12 months.

 Stimulus (Recovery Act):

The president credits his $787 billion stimulus package of tax cuts and increased government spending with improving employment.   He hopes to create about 3.5 million jobs.  Lower estimates put that figure at 2 to 2.5 million jobs by the end of 2010, reducing the unemployment rate to 8+%. 

The Fed’s record-low interest rates, along with other moves to drive down loan rates and stimulate borrowing, have supported the economic rebound.

The White House Council of Economic Advisers released a report showing the plan would save or create 1.5 million jobs by the end of 2009 and 3.5 million by the end of 2010. 

A senior White House official stated that the Obama administration’s fiscal stimulus plan will meet their previous estimates to save 3.5 million U.S. jobs by the end of 2010, but the unemployment rate at that time may be higher due to further deterioration in the economy.  White House officials have been careful to point out that estimated jobs created and saved have merely slowed continued job losses.

The president is now drafting a proposal to try to stimulate more hiring.  Obama plans to send Congress a list of ideas, including new tax breaks for small businesses that hire, some new spending on roads, bridges and other construction and grants to state and local governments to avoid layoffs.  Congress is likely to take up a job-creation package in the New Year.

Stimulus spending by state 

As of January 26, 2010, of the
$329,766,478,709 announced,
$332,170,100,278 (100.7%) has been made available
$175,973,271,008 (53.4%) has been paid out to the states

 Recession histories:

With Nov 1982 unemployment at 10.2%, and the government taking aggressive action, it was still more than five years (April 1988) from the peak before unemployment receded to 5.4%. 

The approach that time, however, was to fix the economy at the expense of the worker.

Some compare the fall in employment to 1974-1975 and 1981-1982. If the comparison is accurate, the peak in unemployment may be reached within the next four to five months (past performance is no guarantee of the future).

Economist William Polley made a chart that includes every recession since World War II.  It makes the chart pretty hard to read, so he simplified it with selected post-WWII recessions.

William Polley’s chart shows how the recovery from the 2001 recession took four years for employment to return to its February 2001 peak. 

Using the Department of Labor unemployment tables of unemployment rates and 5.5% as the “normal” rate of unemployment, I have analyzed things a little differently.  Of course, along the way, the Civilian labor force increases, so the percentages represent ever more workers.

The following table shows unemployment start dates, peaks and returns to the normal rate of 5.5%, Civilian labor force in millions of workers for that year, and the lengths of times from the start date in months:

 Recession peaks 1974-2009 

Note that the unemployment peak period that started in 1974 and ended in 1979 (lasting nearly five years) was followed immediately by another peak period ending nearly nine years later.  By the end of that period, the work force had increased by more than 32%, meaning overall, almost 30 million new jobs had to be created.

 The aggressive increase in the Civilian labor force in that period can likely be attributed to post-World War II babies reaching adulthood, with some entering the labor force after secondary school and the rest entering the workforce after further education.

The periods from 1988 to 1990 and 1995 to 2008 were periods of prosperity, with low unemployment (but a building bubble). Here is the same data in graphic form:

Unemployment rates:
It is interesting to recognize that in most cases, unemployment peaks roughly one-third of the timeline for unemployment to return to its “normal” rate, so we can double the number of months from the Start to the Peak to expect to arrive at an approximate return to “normal.”We live in hope (again, past performance is no guarantee of the future).

They saw our two-house legislature as reflecting the will of the people, but with checks and balances to prevent “the tyranny of the majority” (James Madison). 

While the House with its 435 members representing the popular opinion of the nation’s voters, the Senate, with its two members per state, was visualized as a thoughtful and reflective body, like a modern think tank, where heated issues could cool somewhat and consequences could be considered before new laws were enacted. 

The Constitution provides for both houses to pass legislation with a simple majority vote of those present.  To prevent the “tyranny of the majority,” it also provides a method for the minority to delay a majority vote and gather support for its point of view.  That method is called the ‘filibuster.’ 

The Constitution allows each house to set its own rules.  Each piece of legislation allows a debate on the subject.  Senate rules allow a Senator, or series of Senators (each yielding the floor to the next), to speak for as long as they wish on any subject they choose.  The filibuster can be ended by a 3/5 or 60-Senator vote for cloture (end debate). 

The 60-Senator vote is known as a supermajority. 

It is also possible to end debate through a legal maneuver known as the Nuclear Option, where a Senator brings up a point of order, reminding the Senate that its rules are not being followed with the filibuster.  If the presiding officer makes a ruling to uphold the point of order, and if a simple majority of the Senators vote to uphold the ruling, the debate is ended and a vote on the issue is held immediately.   

Without the threat of filibuster, the Senate needs only a simple majority of 51 votes to pass legislation and uphold rulings.  But when filibuster is threatened on major bills and issues, 60 votes are needed to move past debate to the vote. 

The party-line divisiveness of the modern Senate has made almost all legislative issues require a supermajority to pass.  Although the supermajority vote to end debate is not a bad thing, its use as a weapon in the trench warfare between parties has left the voters as victims. 

An additional use of the 60-Senator vote is used to modify budgeting, authorization, as well as appropriation guidelines and restrictions. 

Each year by October 1, Congress must construct a budget it can stick to, considering government income as well as expenses.  It must authorize new and ongoing programs and agencies that come into being as the result of bill passage or already exist, with non-binding recommended spending levels to carry out the program’s policies.  And it must pass appropriation funding bills, providing the legal authority to use funds from the U.S. Treasury.  

The annual Congressional budget is simply an outline of anticipated federal spending for the coming year, setting limits on discretionary spending if everything works out according to plan.  It also allows procedural points of order for bills that exceed their spending caps.   

When a bill, chugging its way through the enactment process, generates a program or agency budget that will violate its Congressional appropriation, a Senator may raise a point of order.  That appropriation point can be waived by a 60-Senator vote. 

On the saving side of the government ledger, the Congressional budget resolution may include a “reconciliation” figure.  This is assigned to a congressional committee with directions to produce legislation that lowers spending by that amount. 

Passage of a reconciliation bill is an express train with a limit of 20 hours of debate and only a majority of Senate votes for enactment. 

We may learn more about reconciliation in the near future, with pressure building in Congress to pass a health reform bill and the recent upset in Massachusetts, where Republican Scott Brown was elected to serve out the remainder of Senator Ted Kennedy’s term, ending in 2012.  Although a proponent of health care reform, Brown has come out against President Obama’s health care plan in its present form as fiscally unsound. 

With the health care reform bill now in the merging process between House and Senate, we can be sure the 60-Senator rule will be in place, and the Democrats are now one Senator short of the necessary 60 votes for their plan.   

Options for passage of the health care reform bill in some form include

• convincing at least one Republican to vote their way
• scaling down or revising the plan to make it more agreeable to opponents
• requesting the House to pass the Senate bill intact
• using the reconciliation process to pass budget item portions of the bill (that will expire in either five or ten years)

As aggravating and as slow as the Senate process is using the 60-Senator hurdle, perhaps James Madison was right.  Perhaps it does protect us.

Employment:

Nonfarm payroll employment restarted its decline (down 85,000) after virtually stopping in its tracks (up 4,000 [revised]) in November.  This December drop could substantially be the result of seasonal employees let go by retailers.  The slowdown trend continued (127,000 [revised] in October, 139,000 [revised] in September, 201,000 in August [revised], 304,000 in July [revised], 467,000 in June, 345,000 in May, 539,000 in April and 633,000 in March).  

Over the 12 months ending in November, hires totaled 49.9 million and separations totaled 54.4 million, yielding a net employment loss of 4.5 million. 

In 2009, payroll employment declined by 4.5 million. Over the course of the year, job losses moderated considerably. In the first quarter of 2009, job declines averaged 691,000 per month, compared with 69,000 per month in the last quarter.

The 3-month average job layoff figures have been improving steadily.  December through October was 69,333 [revised], September through July was 214,667 [revised], and June through April was 450,333. 

Since the start of the recession in December 2007, payroll employment has decreased by 7.3 million, wiping out all the jobs created in the private sector over the last decade.    

Total unemployment has risen to 15.3 million (10.0%) from 7.7 million (5.0%) in December 2007 and from 11.6 million (7.6%) in January 2009. 

The numbers still indicate that companies are approaching their maximum “leanness” and sustain perceptions that the economy is approaching employment recovery.

Unemployment is still the highest since April 1983.  In a healthy economy, around 125,000 jobs a month must be added and filled just to keep the unemployment rate stable.

The current rate is 10.0% and the number unemployed is at 15.3 million. 

This is the second consecutive month of unemployment holding steady.

The number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) was unchanged in November at 9.2 million.  Previous month part time figures were November (9.2 million), October (9.3 million), September (9.2 million), August (9.1 million), July (8.8 million) and June (9.0 million).  

These persons had their hours cut back or were unable to find full-time jobs.  Since the start of the recession, the number of such workers has increased by 4.4 million, and has remained relatively constant since March 2009. 

Long-term unemployed persons (jobless for 27 weeks and more) have tripled since the start of the recession to 6.1 million since December 2007, adding 229,000 to that number in November.  Four in ten (39.8%) unemployed persons are in this category. 

The average length of unemployment has risen to more than 29 weeks, the longest on record since 1948.

There were 929,000 discouraged workers in December, up from 861,000 in November and 608,000 a year ago.  Discouraged workers are persons no longer looking for work.

Ed.Note: The number unemployed (and the unemployment rate) includes only those who looked for work in the last 4 weeks, and changes as the Civilian labor force population varies. 

The number unemployed contrasted with the changes in payroll employment is accounted for by workers no longer looking for work and therefore dropping out of the Civilian labor force. 

As consumer and business confidence improves, more workers will start to look for jobs again, returning to the workforce in anticipation of better employment conditions, which drives the unemployment rate higher.  On the other side, workers drop from the work force for a number of reasons including giving up looking for work.

Industry sectors

Construction dropped by 53,000 jobs in December, perhaps due to inclement weather and low temperatures.  Previous month losses were November (27,000), October (62,000), September (64,000), August (65,000), July (76,000), June (79,000), May (59,000), April (110,000), and March (161,000), with a total of 1.6 million since December 2007.  The average for May through October was 63,000 and 117,000 for the six months preceding that.  Total employment in construction has dropped by 1.6 million jobs since the recession began.  

Manufacturing dropped 27,000 jobs in December.  Previous month losses were November (41,000), October (61,000), September (51,000), August (63,000), July (52,000), June (136,000), May (156,000), April (149,000) and March (161,000) with widespread job losses totaling 2.1 million since December 2007, mostly in the durable goods industry.  The average job loss for July through December was 41,000, while January through June was 171,000.

General merchandise store employment dropped 15,000 jobs, as seasonal workers were no longer needed.  Retail added 8,000 department store jobs in November as merchants geared up for the holiday season.  Previous month losses were October (40,000), September (39,000), August (9,600), July (44,000), June (18,000), and April (47,000). 

Education and health services continued to add jobs, with health care payrolls increasing by 22,000 in December.  Positive previous months were November (21,000), October (45,000), September (19,000), August (52,000), and July (21,000).  The health care industry has added 631,000 jobs since December 2007.

Professional and business services added 50,000 jobs in December.  Previous changes were increases in November (86,000), October (18,000) and September (3,000), and losses in August (22,000), July (38,000), June (118,000), May (51,000), April (122,0000), and March (133,000).  

Temporary help services added 47,000 jobs in December, a net gain of 166,000 jobs since the low point in July.

Government employment lost 21,000 jobs in December, mostly USPS employees (12,600).  Previous changes were increases for November (7,000) and October (46,000).  Losses were registered in September (53,000), August (18,000) and July (28,000).

Unemployment spreads stayed relatively the same with the highest among teenagers (27.1%), followed down by African-Americans, then Hispanics.  The lowest unemployment started with Adult women (8.2%) followed up by Asians (8.4%), Whites then Adult men (10.2%). 

The good news from this data is that the job losses are lessening.  It is perhaps due to fewer jobs available to lose, but the lower figures are an encouraging sign. 

The average manufacturing workweek remained unchanged at 40.4 hours with overtime at 3.4 hours.  This figure closely correlates with overall output and gives clues (when workweek hours increase) on when firms will start hiring. 

Average hourly earnings remained at $18.80 for December.  Over the past 12 months average hourly earnings have risen 2.2%.  

Workforce:

The total Civilian labor force stands at 153.0 million (down 661,000 from November).  There are nearly two million fewer workers in the work force than in June 2009 (154.9 million).   These are generally workers who have given up looking for work. 

The Civilian labor force usually grows as a recession winds down and optimism about finding work grows.  But as long as Americans remain anxious about their jobs, consumer spending is not expected to grow enough to power an economic rebound. 

The employment population ratio, at 58.2 percent, has declined by 4.5 percent since the recession began in December 2007.

Comparing now with the final month of the last major downturn in November 1982, the total Civilian labor force then stood at 111.1 million.  In that month, there were 11.9 million people unemployed accounting for 10.8% of the available work force (average for the year was 10.6 million unemployed with the rate at 9.7%). 

Looking at jobs needed to reduce unemployment
with the total Civilian labor force at 153.0 million:

(r)=revised

To restore employment to the 5.5% level of 2008, about 6.8 million people will have to regain their job or start new jobs.  It is a tall mountain to climb. 

Ed.Note:  Government and economists foretell that the “normal” unemployment rate will move up to 8% from its current 5.5% level.  With the current Civilian labor force, that means that on a permanent basis there will be roughly 13 million people unemployed — more than 4.5 million more than at the “normal” level today. 

Data collection:

The Census Bureau surveys 60,000 households across the country to insure an accurate demographic survey.  This translates into about 110,000 individuals.  All the counties and county-equivalent cities are grouped into 2,025 geographic sampling units.  824 of these units are selected to accurately represent the entire population of the United States.  For a detailed explanation, see the BLS Handbook of Methods. 

Each month, one-fourth of the interviewed households are rotated out.  They rejoin the sample after eight months, are interviewed for another four months, and then are rotated out forever. 

Each month, 2,200 highly trained Census Bureau employees conduct interviews in the sample households for information on labor force activities (job holding and job seeking) or non-labor force status of household members. 

This sampling method results in a 90+ percent probability that the results will be within 290,000 of the 153 million people in the Civilian labor force.  A monthly total census would be cost-prohibitive. 

Questions are specifically formulated so that neither the interviewer nor the persons interviewed decide their labor force classification.  This prevents the sample from being distorted by respondents providing answers based on their opinion or what a “right” answer should be. 

The basic concepts of employment are: 

The unemployment rates are extrapolated from the survey results. 

The quoted unemployment rate excludes people who have stopped looking for work because they believe no jobs are available (discouraged workers) and others outside the labor force.  They are counted separately. 

Their number has nearly doubled in the previous 12 months.

 Stimulus (Recovery Act):

The president credits his $787 billion stimulus package of tax cuts and increased government spending with improving employment.   He hopes to create about 3.5 million jobs.  Lower estimates put that figure at 2 to 2.5 million jobs by the end of 2010, reducing the unemployment rate to 8+%. 

The Fed’s record-low interest rates, along with other moves to drive down loan rates and stimulate borrowing, have supported the economic rebound.

The White House Council of Economic Advisers released a report showing the plan would save or create 1.5 million jobs by the end of 2009 and 3.5 million by the end of 2010. 

A senior White House official stated that the Obama administration’s fiscal stimulus plan will meet their previous estimates to save 3.5 million U.S. jobs by the end of 2010, but the unemployment rate at that time may be higher due to further deterioration in the economy.  White House officials have been careful to point out that estimated jobs created and saved have merely slowed continued job losses.

The president is now drafting a proposal to try to stimulate more hiring.  Obama plans to send Congress a list of ideas, including new tax breaks for small businesses that hire, some new spending on roads, bridges and other construction and grants to state and local governments to avoid layoffs.  Congress is likely to take up a job-creation package in the New Year.

***Stimulus spending by state: 

As of January 5, 2010, of the
$328,417,898,346 announced,
$313,900,089,021 (95.6%) has been made available
$164,246,301,846 (50.0%) has been paid out to the states

http://www.recovery.gov/Pages/TextView.aspx?data=homeMap

 Recession histories:

With Nov 1982 unemployment at 10.2%, and the government taking aggressive action, it was still more than five years (April 1988) from the peak before unemployment receded to 5.4%. 

The approach that time, however, was to fix the economy at the expense of the worker.

Some compare the fall in employment to 1974-1975 and 1981-1982. If the comparison is accurate, the peak in unemployment may be reached within the next four to five months (past performance is no guarantee of the future).

Economist William Polley made a chart that includes every recession since World War II.  It makes the chart pretty hard to read, so he simplified it with selected post-WWII recessions.

William Polley’s chart shows how the recovery from the 2001 recession took four years for employment to return to its February 2001 peak. 

Using the Department of Labor unemployment tables of unemployment rates and 5.5% as the “normal” rate of unemployment, I have analyzed things a little differently.  Of course, along the way, the Civilian labor force increases, so the percentages represent ever more workers.

The following table shows unemployment start dates, peaks and returns to the normal rate of 5.5%, Civilian labor force in millions of workers for that year, and the lengths of times from the start date in months:

Recession peaks 1974-2009 

Note that the unemployment peak period that started in 1974 and ended in 1979 (lasting nearly five years) was followed immediately by another peak period ending nearly nine years later.  By the end of that period, the work force had increased by more than 32%, meaning overall, almost 30 million new jobs had to be created.

 The aggressive increase in the Civilian labor force in that period can likely be attributed to post-World War II babies reaching adulthood, with some entering the labor force after secondary school and the rest entering the workforce after further education.

The periods from 1988 to 1990 and 1995 to 2008 were periods of prosperity, with low unemployment (but a building bubble). Here is the same data in graphic form:

Unemployment rates:
It is interesting to recognize that in most cases, unemployment peaks roughly one-third of the timeline for unemployment to return to its “normal” rate, so we can double the number of months from the Start to the Peak to expect to arrive at an approximate return to “normal.”We live in hope (again, past performance is no guarantee of the future).