Debate on Economy Grows More Urgent


Richard Moore

Everything here is predicated on one unstated 
assumption: the only imperative is that banks 
collect all their debts. Everything else must be 
determined toward that end. If the nation falls 
apart, so be it, as long as the big banks retain 
ownership of whatever's left. That's what we're 
living for, that's the matrix we're in, that's 
what controls our lives, and that's what's 
destroying the Earth.

Debate on Economy Grows More Urgent
Job-Loss Report Is Worst in 5 Years
By Peter Baker
Washington Post Staff Writer
Saturday, March 8, 2008; A01

A surprisingly bleak employment report sent 
tremors through Washington and roiled the 
presidential campaign yesterday, infusing new 
urgency into the debate over how to reverse an 
accelerating economic slide and fueling a 
political contest over who to blame for it.

The nation shed 63,000 jobs in February, the 
worst job loss in five years, the Labor 
Department reported, and another sign that the 
economy may have slipped into a recession that 
could prove to be the defining challenge for 
President Bush and Congress through the rest of 
his administration.

Responding quickly to the report, Bush asked for 
patience to let an economic stimulus package he 
signed last month start to work. Democrats on the 
campaign trail just as quickly faulted the 
president's economic policies, and congressional 
leaders pressed for a new economic package to 
pump money into unemployment benefits, as well as 
road construction and other job-creating 
infrastructure projects.

"Losing a job is painful, and I know Americans 
are concerned about our economy," Bush told 
reporters at the White House. "So am I. It's 
clear our economy has slowed, but the good news 
is we anticipated this and took decisive action 
to bolster the economy." Last month's $152 
billion package of tax breaks for workers and 
businesses, Bush added, "provided the economy 
with a booster shot" whose impact will be felt 
"over the coming months."

While placing faith in the stimulus plan, White 
House officials said they are also considering 
other measures, including a pay-down program in 
which the federal government would offer 
low-interest loans to financially pressed 
homeowners to bring down their mortgage costs and 
forestall defaults. Bush's economic advisers said 
they have downgraded their short-term forecast 
and now expect the first quarter to be the 
"weakest," but they expect stronger growth by 

The economic troubles stem from a crisis in debt 
markets that developed last August and touched 
off a wave of home foreclosures. Despite efforts 
by the Federal Reserve to cut interest rates, 
credit has continued to tighten, making it harder 
for businesses to raise capital to expand 
operations and for Americans to pay off credit 
cards and buy homes or cars.

Although the unemployment rate edged down from 
4.9 percent to 4.8 percent in February, the jobs 
report alarmed policymakers in Washington because 
the losses proved worse than Wall Street 
predictions. The Labor Department said the 
economy lost 52,000 manufacturing jobs and 39,000 
construction jobs last month, continuing deep 
losses over the past year. The only reason the 
overall report was not worse was the addition of 
38,000 government jobs.

"The short-term discussion ought to be what does 
this mean for economic policies, what kind of 
anti-recessionary policies do we need to start 
crafting, what is the impact of the policies 
we've crafted so far?" said Jared Bernstein, a 
scholar at the liberal Economic Policy Institute. 
The long-term issue, he said, may be "to what 
extent is our current situation a result of 
Bushonomics? That's really going to be fodder for 
the campaign."

Rea S. Hederman, an economist at the conservative 
Heritage Foundation, said the report may not 
signal the need for additional government action 
because it will take time for the stimulus 
package to have an impact. "We've already 
diagnosed the problem," he said. "We've already 
tried one remedy. Let's at least see if that 

Rising economic anxiety dominated the day on the 
campaign trail. Sen. Hillary Rodham Clinton 
(D-N.Y.), who won the Ohio presidential primary 
this week in part on the strength of support from 
voters worried about the economy, took aim at 
both Bush and her rival, Sen. Barack Obama 

The numbers "are painful reminders that we need a 
president who is ready to be a steward of our 
economy starting on Day One," she said. And 
referring to Bush, though not by name, she said, 
"It's going to take more than tax rebates to 
avoid a deep economic downturn." Clinton renewed 
her call to extend unemployment insurance, invest 
to create jobs, and impose a 90-day moratorium on 
foreclosures and a five-year freeze on subprime 
mortgage interest rates.

For his part, Obama cited the everyday Americans 
he meets on the campaign trail while lumping 
Clinton in with the Republicans as part of the 
problem. "They can't afford John McCain's promise 
of four more years of the very same failed Bush 
economic policies that have failed us for the 
last eight," Obama said, "and they can't afford 
another politician who promises solutions but 
won't change the divisive, lobbyist-driven 
politics in Washington."

McCain, a senator from Arizona and the 
presumptive Republican nominee, said that "many 
American families are hurting very badly." He 
called for cutting corporate taxes, repealing the 
alternative minimum tax and making Bush's tax 
cuts permanent. Although he once said that "I 
still need to be educated" about economics, 
McCain defended his experience, saying he has 
been involved in such issues for 25 years.

Campaigning in Atlanta, he said, "It's pretty 
obvious the economy is on most people's minds now 
and is clearly the greatest challenge that we 
face" -- an acknowledgment of how the issue has 
transformed a race once expected to center on 
Iraq, terrorism and national security, all issues 
on which McCain would rather debate his eventual 
Democratic opponent.

Just 19 percent of Americans consider the economy 
in good shape, the most negative the public has 
been in 15 years, according to the latest 
Washington Post-ABC News poll. Thirty-nine 
percent named the economy the top issue, nearly 
four times as many as in September.

Bush aides dismissed the Democratic criticism as 
predictable campaign-trail rhetoric that ignores 
the president's record of 52 straight months of 
job creation, ending in December. "Two candidates 
for president who are duking it out in the 
Democratic primary are no doubt going to make 
charges against this president, even if they 
don't ring true," said White House press 
secretary Dana Perino.

White House economists continued to resist the 
recession label but said this will be "the worst 
time," until tax rebate checks of $600 for most 
workers go out in May. "We have definitely 
downgraded our forecast for this quarter," said 
Edward Lazear, chairman of the White House 
Council of Economic Advisers. "I'm still not 
saying that there is a recession. There is no 
denying that when you get negative job numbers, 
realistically the economy is less strong than we 
had hoped it would be."

Polling analyst Jennifer Agiesta contributed to this report.
© 2008 The Washington Post Company

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