Focus shifts to jobs
By Ed Pilkington
WITHIN hours of the $700bn bailout of Wall Street’s financial giants clearing Congress on Friday, attention had shifted towards other stressed parts of the US economy.
The focus is now on the country’s jobs market after the Bush administration reported 150,000 job losses in September, the biggest monthly drop in five years which, if sustained, would see the US lose a million jobs this year.
Though the political crisis in Washington was overcome with the second attempt at the bailout bill being voted through by 263 to 171 votes in the House of Representatives, concern mounted quickly over the inability of the deal to cope with the wider economic weakness. In an editorial on Sunday, the New York Times called on the government to move swiftly to protect Americans threatened with foreclosure and to pass a stimulus bill. “The meltdown on Wall Street is only part of a larger meltdown and the bailout bill is only one attempt at a fix,” the paper said.
“The wheels seem to be coming off the economy right now,” Brian Sack, a forecaster with Macroeconomic Advisers, told the Los Angeles Times. “It’s hard to see how we avoid a recession, and it could prove a tough one to climb out of.” Under the broad terms of the bailout, the treasury will have up to $700bn, released in stages, to buy up toxic mortgages and other assets in order to inject confidence into the financial system.
Golden parachutes for executives seeking to profit from the collapse of their institutions will be forbidden, and the government is required to come up with a plan to ease the burden for threatened homeowners by adjusting the terms of those loans taken up by the treasury. George Bush, who has frequently tried to reassure the American public over the airwaves during the past fortnight, used his regular weekly radio broadcast to emphasise that the bailout would bolster the general economy.
But he said its impact would take time to filter through. “My administration will move as quickly as possible, but the benefits of this package will not all be felt immediately,” he said.
“The federal government will undertake this rescue plan at a careful and deliberate pace to ensure that your tax dollars are spent wisely.”
— The Guardian, London


