A record 32.2 million people -- one in every 10 Americans -- received food stamps at latest count, the government said on Thursday, a reflection of the recession now in its 16th month.
Food stamps are the major U.S. antihunger program and help poor people buy groceries. The average benefit was $112.82 per person in January.
The January figure marks the third time in five months that enrollment set a record.
"A weakened economy means that many more individuals are turning to SNAP/Food Stamps," said the Food Research and Action Center, an antihunger group, using the acronym for the renamed food stamp program, Supplemental Nutrition Assistance Program.
The U.S. unemployment rate was 8.1 percent in February, the highest in 25 years. Weekly claims for jobless benefits totaled 669,000 last week, the highest in 26 years, the government said on Thursday.
Food stamp enrollment rose in all but four of the 50 states during January, said Agriculture Department figures. Vermont, Alaska and South Dakota had increases of more than 5 percent. Texas had the largest enrollment, 2.984 million, down 65,000, followed by California at 2.545 million, up 43,000, and New York with 2.211 million, up 37,000.
Rep Gary Ackerman is feeling it today. Last month, he got to feast on the hapless SEC foils who couldn't figure out that Bernie Madoff was a crook, even though whistleblowers were banging their door for years.
This morning he gets to take a few swings at a pinata named AIG. He just delivered the quote of the day:
If they called credit default swaps 'I can't believe it's not insurance,' nobody would buy it!
The number of newly started foreclosure cases on Long Island jumped 54 percent last month from January, although the number of actual lender repossessions of homes continued to fall, according to RealtyTrac, an online marketer of foreclosures.
Long Island had 933 new cases - 607 in Suffolk and 326 in Nassau - compared with 606 in January, the report showed. The rate of new February cases shows Long Island is almost back to where it was a year ago, when lenders opened foreclosure proceedings on 999 homes, according to the data.
In total, Long Island's foreclosure-related filings, from auction notices to repossessions, grew by 26 percent last month from January, the company said. That was more than the nationwide average increase of almost 6 percent, RealtyTrac reported.
The nation's unemployment rate bolted to 8.1 percent in February, the highest since late 1983, as cost-cutting employers slashed 651,000 jobs amid a deepening recession.
Both figures were worse than analysts expected and the Labor Department's report shows America's workers being clobbered by a wave of layoffs unlikely to ease in the coming months.
"There is no light at the end of the tunnel with these numbers," said Nigel Gault, economist at IHS Global Insight. "Job losses were everywhere and there's no hope for a turnaround any time soon."
February's net job loss came after even deeper payroll reductions in the prior two months, according to revised figures released Friday. The economy lost 681,000 jobs in December and another 655,000 in January.
Employers are shrinking their work forces and turning to other ways to slash costs - including trimming workers' hours, freezing wages or cutting pay - because the recession has eaten into their sales and profits. Customers at home and abroad are cutting back as other countries cope with their own economic problems.
Since the recession began in December 2007, the economy has lost 4.4 million jobs, more than half of which occurred in the past four months.
A year ago, the unemployment rate in New York was 4.7%. Today it's 7%.
New York's seasonally adjusted unemployment rate stood at 7 percent in January, up from 4.7 percent a year earlier.
The state Labor Department previously reported that the unemployment rate in December 2008 was 7 percent, but end-of-year revisions dropped it to 6.6 percent.
January's rate in New York City was 7.3 percent - a slight increase from 7.2 the previous month and up from 5.3 in January 2008. The highest rate - 11.7 percent - was in Lewis County.
Tompkins County had the lowest rate, at 5.6 percent, an increase from 4 percent in January 2008.
Queens Congressman Gary Ackerman has been on a roll lately. Last week, he launched withering questioning of the hapless SEC regulators who still couldn't uncover the $50 billion dollar ponzi scheme perpetrated by Bernie Madoff, even after having the entire case delivered to them wrapped in a bow several times over a decade. Today, he's got 8 CEOs of the largest banks in the country, banks that have taken well over $125 BILLION dollars in so called "TARP' funds over the last few months, though none of them seem to be lending any of it.
In this video from the folks at TPM, Ackerman asks JP Morgan CEO, Jamie Dimon, "What did you do with (our) $25 billion dollars?" The good stuff begins at about the 3:35 mark.
Dimon's response can be roughly translated as, "We didn't use it for new lending."
(Note: Again, cross-posted from my website, from which you can also download the 7-page PDF file.)
For the next few weeks, much of the news emanating from Washington will be about whatever "economic stimulus package" Congress eventually passes. Naturally, everyone has gripes about the package as it is reported to stand currently, and everyone will have gripes about the final version of the package, whatever it is. Rather than gripe like all the others, however I thought I'd try something positive - outlining what a good, effective stimulus package should look like.
They're also hosting what should be a very interesting get together in Rochester next week, featuring Pulitzer Prize-winning reporter David Cay Johnston discussing why the rich get richer and the poor get poorer.
This is pretty amazing. It's the White House's predictions about GDP growth, made at the beginning of 2008:
And here was the plan circa January 2008 for dealing with the downturn in housing:
The Administration has aggressively pursued policies to help deal with current challenges. Facing declines in housing markets of the past two years, the Administration has made proposals for modernization of the Federal Housing Administration (FHA)...
[....]
These policies are intended to help provide transition relief-without any direct costly "bailout" from the Federal Government for individuals or institutions that had taken on excessive speculative risk and without interfering with the effective functioning of the free market.
(As they say, it's not a bug, it's a feature. What a mess. - promoted by phillip anderson)
New York state has a process for applying for unemployment benefits that mostly involves going to its Labor Department website and filling out a several-pages-long form.
Then the state checks with your former employer, determines whether you have a valid claim and the amount of weekly benefits, and sends you a packet of stuff explaining the program.
The first, or "waiting," week is unpaid; after that, benefits should begin and be paid weekly. Your first check, at half your prior salary, should arrive about three weeks after application and approval.
But first, you have to make a phone call to "request credit for your waiting week."
Paul Krugman has a good piece in the New York Review of Books on what he thinks the Obama administration should do about the economic crisis. First, he suggests a stimulus package focusing on infrastructure and aid to states:
Now, the United States tried a fiscal stimulus in early 2008; both the Bush administration and congressional Democrats touted it as a plan to "jump-start" the economy. The actual results were, however, disappointing, for two reasons. First, the stimulus was too small, accounting for only about 1 percent of GDP. The next one should be much bigger, say, as much as 4 percent of GDP. Second, most of the money in the first package took the form of tax rebates, many of which were saved rather than spent. The next plan should focus on sustaining and expanding government spending-sustaining it by providing aid to state and local governments, expanding it with spending on roads, bridges, and other forms of infrastructure.
Four percent of GDP is about 520 billion dollars.
Krugman also recommends recapitalization of banks via the purchase of equity (as opposed to the purchase of troubled assets):
My guess is that the recapitalization will eventually have to get bigger and broader, and that there will eventually have to be more assertion of government control-in effect, it will come closer to a full temporary nationalization of a significant part of the financial system. Just to be clear, this isn't a long-term goal, a matter of seizing the economy's commanding heights: finance should be reprivatized as soon as it's safe to do so, just as Sweden put banking back in the private sector after its big bailout in the early Nineties. But for now the important thing is to loosen up credit by any means at hand, without getting tied up in ideological knots. Nothing could be worse than failing to do what's necessary out of fear that acting to save the financial system is somehow "socialist."
The economic crisis is real, folks, and it's not going to go away anytime soon. There is no viable pony plan. We aren't going to save the day by cutting "something else." All available data point to a profound halting of economic activity. And the folks in Albany need to get moving if we are going to be able to weather the worst of it.
Yes, the stock market crashed again today, but many people rightly point out that the Dow is not the economy. It isn't. This is:
The Baltic Dry Index is one of the oldest economic indexes in the world. It's been kept since the middle of the 18th century and it essentially is a gauge of the cost of shipping raw materials across the globe. It has dropped 98% since May of this year. Back then, a Capesize cargo ship would cost you about $235,000 a day to ship your iron or corn or bananas. Today, that same ship - one with at least 170,000 tons of capacity - will set you back around $5,600 a day. Yes, you read that correctly.
Put simply, the cost of shipping has dropped through the floor. Sending a tonne of iron ore from Brazil to China in early June would have set you back more than $100 (£62) per tonne, or around $15m per voyage. But freight rates have now dropped to only slightly over $10 per tonne, or just $1.5m for the 70-90 day journey.
Gleaming new Mercedes cars roll one by one out of a huge container ship here and onto a pier. Ordinarily the cars would be loaded on trucks within hours, destined for dealerships around the country. But these are not ordinary times.
For now, the port itself is the destination. Unwelcome by dealers and buyers, thousands of cars worth tens of millions of dollars are being warehoused on increasingly crowded port property.
And for the first time, Mercedes-Benz, Toyota, and Nissan have each asked to lease space from the port for these orphan vehicles. They are turning dozens of acres of the nation's second-largest container port into a parking lot, creating a vivid picture of a paralyzed auto business and an economy in peril.
"This is one way to look at the economy," Art Wong, a spokesman for the port, said of the cars. "And it scares you to death."
That's not the port's only problem either. The loads of cardboard that are usually sent back to China so that they can repackage all those consumer goods they normally ship to us are piling up all around them because no one in China wants it anymore.
But the inventory glut in Long Beach is not limited to imported cars. There has also been a sharp drop in demand for the port's single largest export: recycled cardboard and paper products.
This material typically goes to China, where it is used to make boxes for new electronics and other products that are sent back to the United States. But Chinese factories reacting to sharply falling demand are slowing production, so they need less cardboard. Tons of paper are piling up recycling businesses around the port, the detritus of economies on hold.
That, friends, should give you a chill. Global economic activity fell off a rather steep cliff about 6 weeks ago and the signs that it will rebound shortly are awfully scarce. This recession could quite easily become another Depression and it will definitely get worse before it gets better.
That's what makes the situation in DC - where we are essentially rudderless with a numskull ideologue at the wheel - and in Albany, where one could make a compelling case for aggravated legislative malpractice and dereliction of duty, all the worse. In Washington, we are forced to wait for real leadership at east until January 20th. Not much we can do about that, though the fact that we are for all intents and purposes in a holding pattern during the most acute economic crisis of most of our lifetimes has certainly got me worried. The time for big, bold action is right now.
But the folks we send to Albany to do the People's business have no such excuse. The absolute abdication we witnessed this week should be impeachable. This crisis is real and the state's budget needs to be adjusted to reflect that. Yeah, there are many hard choices to be made, but that's no excuse for throwing their hands in the air and punting.
And this is bigger than budget cuts versus revenue increases. I personally think that the Governor's plan is flawed by it's reliance solely on cuts on the backs of the poor and middle class. I think a modest increase in taxes on those who can most afford them is perfectly reasonable if not prudent given the nature of the challenges we face. That said, I believe now is the time to take a much more comprehensive look at the way we finance state government here in New York.
Wall St is taking a vicious beating right now, but it will eventually come back. It will never be the Wall St of the last 15 years or so again though. New York was able to avoid hard choices (or even wise ones) for so long because we were able to milk the Wall St cow for so long. Those days are over and most likely are gone forever.
We need to seriously restructure how we pay for government and what it is we pay for. It's time to put all options on the table and to get serious about how we pay for what we want going forward long term - not just over the next fiscal year.
I'd suggest a radical overhaul of the public authorities to start. But, then again, I don't make $90K a year to do the People's work part time. We already elected a bunch of folks to do that for us.
They had damn sure get busy because the wolf is at the door.
A friend who is much, much smarter than I writes in an email:
"This is a new epoch, until now the Fed sanitized inflation, and Congress and the President were free to spend. The deficits came at the price of higher interest rates, but we allowed some interest rates to be subsidized, namely housing. Housing was over-developed because it was under priced. Now the Fed is going to have to have interest rates pegged low, because of interest on the deficit, the need to keep housing propped up, the need to directly loan, and the need to provide such stimulus as can be had. Therefore, the fiscal authority will have to control inflation. One reason that politics had been so polarized is that those who controlled the treasury could rob everyone, to pay their constituencies with pork. When this decade we both spent, and had low interest rates, it gave out. Not in the ways that perhaps people expected, but a credit bubble leading to a panic is a perfectly 19th century thing to do. If Krugman joked that 2001 was "your grandfather's recession" then this is great-great grand pappy from 1873's "Panic".
The time when politicians could spend irresponsibly and allow the Fed to clean it up is over. This doesn't mean budget cutting per se, we are going to be running deficits. The question is what we are going to be buying with those deficits. Presently we are buying a war in Iraq, happy billionaires that get tax breaks that we then pay for by borrowing the money from them.
Everyone is a liberal now. The question is who is going to be a smart and honest liberal, and who is going to try and pretend that there is another round of Reaganomics for us all."
Well, the expected "assisted acquisition" of Bear Stearns by J.P. Morgan Chase has been hastily completed, in hopes of forestalling a dramatic world-wide stock plunge to begin the new week.
Hoping to avoid a systemic meltdown in financial markets, the Federal Reserve on Sunday approved a $30 billion credit line to engineer the takeover of Bear Stearns and announced an open-ended lending program for the biggest investment firms on Wall Street.
In a third move aimed at helping banks and thrifts, the Fed also lowered the rate for borrowing from its so-called discount window by a quarter of a percentage point, to 3.25 percent.
The moves amounted to a sweeping and apparently unprecedented attempt by the Federal Reserve to rescue the nation's financial markets from what officials feared could be a chain reaction of defaults.
After a weekend of intense negotiations, the Federal Reserve approved a $30 billion credit line to help JPMorgan Chase acquire Bear Stearns, one of the biggest firms on Wall Street, which had been teetering near collapse because of its deepening losses in the mortgage market.
In a highly unusual maneuver, Fed officials said they would secure the loan by effectively taking over the huge Bear Stearns portfolio and exercising control over all major decisions in order to minimize the central bank's own risk.
The Fed, working closely with bank regulators and the Treasury Department, raced to complete the deal Sunday night in order to prevent investors from panicking on Monday about the ability of Bear Stearns to make good on billions of dollars in trading commitments.
The Bush/Greenspan housing recession/depression has already sent a lot of real estate agents into other lines of sales and a lot of new-home builders/workers into remodeling kitchens and bathrooms.
But it has also affected thousands of manufacturing workers.
Here (around Albany), Owens Corning announced yesterday that it will be laying off 140-160 of its 360 workers at its Selkirk insulation plant over the next two months.
