March 1, 2009
Fixing the Economy
Believe it or not, there’s one aspect of Barack Obama’s ascendance to the White House that’s rarely noted: He is one of a few Americans who entered 2009 looking forward to a bigger home and a higher-paying job.
Little more than a week before Barack Obama took office, the Labor Department reported that the unemployment rate had risen to 7.2% in December, its highest level in 16 years. And that was just the beginning. Many economists expect the jobless rate to peak at 8% or 9% in 2009. At the top of Obama’s to-do list is the unenviable task of reviving the weakest U.S. economy in decades. Along with employment, wages and income are down. Gross domestic product, imports, and exports also continue their downward spiral. Just as 2008 came to a close, manufacturing activity slid to its lowest point since 1980. At the same time, consumer confidence hit an all-time low. Furthermore, as President Obama worked with his team of advisers to develop his economic stimulus plan, he warned of the prospect of “trillion-dollar deficits for years to come.â€
Obama’s plan is bold and far-reaching. It includes more than $825 billion in federal spending and tax cuts and is designed to put Americans back to work, shore up the nation’s infrastructure, locate new sources of energy, and provide economic assistance to struggling families. Democratic opponents of the plan claim it won’t create enough jobs to make a real difference. Others worry that the amount of proposed spending could devalue the struggling U.S. dollar and spark inflation.
Since our inception nearly 40 years ago, black enterprise has periodically gathered leading economists to provide an economic outlook as well as policy recommendations for the White House. The most recent confab–taking place in the shadow of falling asset values, bank failures, and auto industry bailouts–was filled with a sense of urgency; many experts believe public sentiment will turn against Obama unless he displays a full grasp of the situation within his first six months on the job.
Few economists dispute the need for a federally induced stimulus plan. What many experts, lawmakers, and even everyday citizens disagree on is the size and scope of the plan. The same was true for the Black Enterprise Board of Economists, which includes Bernard E. Anderson of the University of Pennsylvania’s Wharton School; Thomas D. Boston of Georgia Institute of Technology; Yale University economist Gerald D. Jaynes; Howard University visiting professor of economics Jessica Gordon Nembhard; and special guest Deborah C. Wright, president and CEO of New York-based Carver Federal Savings Bank (No. 1 on the be banks list with $803 million in assets). What emerged from our gathering was a collection of policy proposals for the new president–a “New Dealâ€ for the millennium. Their suggestions included aggressive public works programs similar to those developed by President Franklin Delano Roosevelt. Moreover, many recommended a series of tax rebates and cuts to put more dollars in Americans’ pocketbooks. Some worried that Obama’s big plan doesn’t focus enough on small things,