By State Senator Roy Dyson (D-29th)
It is impossible to ignore the economy - Even with crude oil prices falling another 3.7% last Tuesday to a record $54.95 a barrel. It's just not good. However, after reviewing just how bad it is, I want to offer some much-needed perspective to the situation.
According to the Labor Department, first time claims for unemployment benefits rose to 576,000, the highest level since the period right after 9/11. Unemployment has risen to 6.1%, a 14-year high. By contrast, unemployment peaked at 6.3% in 2003 after the short recession of 2001. It peaked at 7.8% in the 1990-1992 recession and above 10% in the 1980-1982 recession. During the Great Depression, unemployment was between 25% and 30%.
Government tax revenues are down 7.5% within the last year.
The initial cost of the $700 billion bail out has pushed the U.S. budget deficit for October alone to a record $2.37.2 billion, the highest increase recorded for a single month. The budget deficit is on track to reach an unfathomable $1 trillion for the year.
Three wild selling days on Wall Street in September wiped out $1 trillion in shareholder value. In mid November the DOW rose 6.67%. Each day since has brought a wildly up and down spiraling DOW.
401Ks are losing value rapidly, making retirement only a far away dream for too many Americans.
Businesses bankruptcies rise as the recession strangles small businesses and large businesses alike and consumers cut discretionary spending. Last month, retail sales were down 2.8%, the sharpest monthly decline ever recorded.
Target's retail sales are down 24% for the third quarter. Citibank Corporation will dismiss 53,00 employees over the next few months. That's in addition to the 22,000 who have already lost their jobs.
What can possibly be the good news, you ask? Well, we've been through other economic recessions and eventually come out on top. Some headlines during the 1990 recession, sound eerily familiar:
"Real Estate Bust" - Newsweek, October 1, 1900
"Can America Still Compete" - Time, October 29, 1990
"The Consumer Has Seen the Future and Gotten Depressed" - Business Week, December 10,1990
"How the Real Estate Crash Threatens Financial Institutions" - U. S. News, November 17, 1990
"How Safe Is Your Job" - Newsweek, November 5, 1990
On the positive side, government is doing everything it can to stop the slide. There is much more it can do. However, I believe and hope government now realizes it cannot give out taxpayers' dollars without strings attached and sharp oversight.
Unlike the Great Depression, there is a concentrated global response to what is recognized as a global recession. An unprecedented emergency meeting of world leaders was called recently. They have reached a consensus for a comprehensive action plan within the next few months to reshape and regulate international financial institutions and strengthen transparency and accountability.
Not for one minute, would I try to paint a rosy picture or diminish the extent to which the economic condition is dire. Nor will I diminish the time and sacrifice it will take to get the economy back on track. Nevertheless, I am convinced there is nothing we, Americans, cannot overcome with strong leadership, determination and faith in ourselves. We have done so in the past. We will do so now. And we will do so in the future.