"The first thing that we look at and the first thing that I think is going to be a driver for many businesses and industries is employment. And everyone is saying that unemployment has not yet hit bottom. You know, people say it's good news that the rate of unemployment growth has slowed. Well, that's pretty tepid good news. Folks are still losing their jobs. And some are part of structural changes, [and] in some cases, its as simple as a right-sizing."
"But when we look at the banks and the auto companies, those are structural changes. Those jobs are never coming back and that's probably a good thing, we don't need them anymore. We don't need buggy whips, anymore. We don't use candles anymore, so all those candle-makers and buggy whip makers are out of business. But you know what? Overall, that's okay, there are going to be changes in the economy. The question is: 'Are we moving? Are we using the right programs? Are we allowing our economy to do what it does best, which is to respond flexibly?' Sometimes it's better to take a quick hit and move on."
Examining the ballooning unemployment numbers, noting that there are still uncounted and unaccounted for jobless sitting in the shadows of statistical gathering, Manley asserts that the country still has a way to go before we see the bottom of unemployment numbers. "And we also know that the bailout money has not been used in a way to create new jobs. First of all, very little of it has been spent to date, I mean, this was supposed to be an emergency measure, 'rush-rush, we gotta get a pump of adrenaline into the economy.' Well, less than 10% of the funds have been spent and more of them are going to be spent later than now. So, maybe it wasn't such an emergency and maybe it wasn't the answer."
The toxic asset situation hasn't been dealt with, either, she notes, "The mark to market rules were relaxed and instead of having some type of stringent program of clearing those assets from the system. The banks are still holding them and the feds are giving them money. You could have a zombie bank situation like they did in Japan and remember, in Japan, that was a very painful and very long recovery, we're talking more than a decade."
"I think all those things are saying nobody could reasonably expect that any administration [could do] an overnight recovery. But if you look at the numbers and you look at the underlying trend, you don't see a direction that say we're moving up. You see a direction that says more unemployment and potentially more significant jolts to the real economy."
"Much of the program was fundamentally misguided because it was not oriented at the types of activity that allowed jobs to be created. A lot of the money that has been spent has been spent on transportation payment, Medicare, unemployment benefits, these are things that are not creating jobs."
"Job shifting, job mobility, Job destruction, job recreation is endemic to our economy. These jobs may be leaving Citibank and AIG, but you have to be realistic, they may not be coming back...but we have to acknowledge that there will be discomfort. A program though, that props up companies and industries which are not responding to the needs of the market, which are not efficient, it's not going to create the productivity, it's not going to create the growth that allows for a higher standard of living down the road. And that's what this is all about."
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