SOTU 2014 focuses on jobs, fairness

President Obama’s State of the Union Address last week highlighted a number of themes that focused on creating more opportunities for working Americans by streamlining the tax code, providing financial support for small business innovation, and making older industries like auto manufacturing and newer industries like vaccine manufacturing more competitive in the global economy.

Underlying all this was a promise to get the country back on track after it went off the rails in 2008 from a financial collapse that was precipitated by poor financial oversight, risky investment, and gross mismanagement of the nation’s financial and banking sectors. Obama claimed that the recession was making several trends worse, including growing income inequality between the wealthy and the rest of Americans. Although the President called on Congress to end its politics of obstruction and act to reform a sluggish economic recovery, he indicated that he didn’t expect much from the Republican Party, and he would move ahead without them wherever executive orders could be made on these issues in place of substantial legislation.

Here is an excerpt of Obama’s SOTU 2014 that focuses on the theme of economic recovery and fairness:

And in the coming months — (applause) — in the coming months, let’s see where else we can make progress together. Let’s make this a year of action. That’s what most Americans want, for all of us in this chamber to focus on their lives, their hopes, their aspirations. And what I believe unites the people of this nation, regardless of race or region or party, young or old, rich or poor, is the simple, profound belief in opportunity for all, the notion that if you work hard and take responsibility, you can get ahead in America. (Applause.)

Now, let’s face it: That belief has suffered some serious blows. Over more than three decades, even before the Great Recession hit, massive shifts in technology and global competition had eliminated a lot of good, middle-class jobs, and weakened the economic foundations that families depend on.

Today, after four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened. Upward mobility has stalled. The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by; let alone to get ahead. And too many still aren’t working at all.

So our job is to reverse these trends.

Read the full text and watch the video of President Obama’s SOTU speech here.

Fed Chair calls out Congress for fiscal policy frustrating recovery

FED Chair Ben Bernanke is widely believed to be stepping down at the end of his second term in January. Today he appeared before Congress to give his last biannual update on the economy to the House Financial Services Committee, reaffirming the Fed’s monetary policies but warning that federal fiscal policy remains the single largest obstacle to revitalized growth.

He noted that federal spending cuts of the kind supported by the GOP are reducing growth this year by about 1.5 percentage points.

“The risks remain that tight federal fiscal policy will restrain economic growth over the next few quarters by more than we currently expect, or that the debate concerning other fiscal policy issues, such as the status of the debt ceiling, will evolve in a way that could hamper the recovery.”

Read his remarks to Congress here.

DOL reports jobless claims down, as workers give up looking for work

The Department of Labor announced that jobless claims were down from 9 to 8.04 percent in November, the single largest decline since March 2009. The fraction translates into roughly 120,000 new jobs created by private employers. However, the report grimly noted that the decline in jobless claims was also partly due to workers giving up looking for jobs in the grim labor market, particularly women.

The report also revised higher the average number of jobs created each month to 143,00 over the three-month period going back to September, an average that is higher than the historic low from May to August, in which anemic job growth signaled the unwillingness of investors and firms to take on new workers at the height of the European debt crisis and the earthquake in Japan that disrupted shipping and supply chains globally.

This November job “rally” can be traced in large part to retailers who added temp workers during the holiday season, so it is unclear whether there is cause for celebration as the transient nature of these 50,000 jobs may become all too apparent in January when retailers let go of their seasonal workers. (Can we expect a rise in jobless claims after the holidays?) In addition, this year’s record-breaking figures by retailers for Black Friday also improved prospects that consumers are more willing to spend in the hopes of a brighter economic future.

However, while economists are claiming that the labor report shows the economy is “improving at a faster clip,” the real news on the ground is that anemic job growth is hampering the economic recovery as workers without jobs spend less on goods and services and firms continue to find ways of cutting workers in order to bolster their bottom lines. The seasonal affective disorder known as “holiday shopping” is only a temporary respite from the really bad news, which is that the real wages of Americans are down and their credit card debt is on the rise again.

These are “not” the signs of a healthily recovering economy, but given the dismal performance and prospects of economic growth in the near future, economists, politicians and investors alike are holding onto this bare bit of news that jobless claims are down, literally, by .06 percent. This is an embarrassing piece of evidence that sound economic policy, which must include job creation (thank you very much, Republicans, for voting against jobs for Americans), has been substituted for the rather conventional approach of grasping at straws in a rising flood.