Financial Crisis

Morning Must Reads: Occupy Wall Street and the Banks in Pennsylvania

In just over a week, the Occupy Wall Street movement has gone from being lectured by writers at Mother Jones for not understanding messaging to comparisons to George Washington in a Central Pennsylvania newspaper!

George WashingtonThe protesters didn’t take their beef to the dysfunction that is Washington. Instead, they planted their flag of dissatisfaction in the heart of America’s financial district. It has spread to Philadelphia, San Francisco, Boston and Los Angeles, and is coming to Harrisburg on Wednesday ... The upstarts who got Occupy Wall Street off the ground might not become storied legends, but their idea looks like it has legs, and with any luck, there’s a next generation George Washington poised to step in, articulate a moderated message, and put American economic equality squarely in the political middle.

Third and State This Week: The Standard and Poor's Downgrade, Public Job Losses, and Energy Investment Bankers and the Marcellus Shale

Programming Note: Third and State will be taking the week of August 15 off. See you back here on August 22.

This week at Third and State, we blogged about the Standard and Poor's downgrade, doubts raised by energy investment bankers about a Marcellus Shale economic impact study, public employment job losses and more.

IN CASE YOU MISSED IT

  • On the economy, Mark Price blogged about the Standard and Poor's downgrade and the other "decidedly grim" economic news of the past couple weeks.
  • On the Marcellus Shale, Michael Wood wrote about doubts being cast by energy investment bankers on the findings in the Marcellus Shale Coalition's recent economic impact study. And, reacting to a recent Bloomberg News story, Mark Price reminded us that 72,000 new hires in the Marcellus industries is not the same as new jobs created.
  • Finally, Chris Lilienthal shared a graphic from the Center on Budget and Policy Priorities highlighting the loss of 611,000 jobs in state and local governments during and after the Great Recession.

See you on August 22, 2011. Keep us bookmarked and join the conversation!

The Standard and Poor's Downgrade

The economic news of the past two weeks has been decidedly grim.

On July 29, new data confirmed that the economy in the first half of 2011 grew much more slowly than necessary to bring down the unemployment rate.

A few days later, the bizarre debt-ceiling fight was resolved with agreement to cut nominal federal spending over the next two years. Economic forecasts prior to this deal put the U.S. unemployment rate at 8% at the end of 2012. Cuts to federal spending mean higher unemployment forecasts are on the way.

By the way, this morning the forecasters at Goldman Sachs increased their unemployment forecast for the end of 2012 to 9.25% — and that assumes Congress will agree to extend the current payroll tax credit before January.

Unless you are living off the grid, you couldn’t have escaped news that last week was brutal for the Stock Market. Then late in the day Friday, credit rating agency Standard and Poor's — after correcting a $2 trillion math error — decided to go ahead and downgrade the full faith and credit of the U.S. taxpayer from AAA to AA+.

So what should we do? To restore confidence in the United States' ability to pay its bills, Congress should take steps now to build a stronger economy, not weaken it as we did with the debt limit deal.

The chief problem in the world economy is both the U.S. and Europe have taken steps to slow rather than boost economic growth. This will have a major impact on the U.S.'s ability to pay down long-term debt.

Unless Congress takes immediate action to create jobs, we face the rising risk that the economy will continue to grow more slowly.

Is that decidedly grim enough for you?

Third and State This Week: States Cutting Budgets, the Debt Ceiling Debate, and a Middle Class 'Under Attack'

This week, we blogged about the looming debt ceiling crisis in Washington, how state budget cuts will hurt the economic recovery, Marcellus Shale job claims, a new report on the middle class in Pennsylvania and more.

IN CASE YOU MISSED IT

  • This week was a busy one for Mark Price, who penned four of our five blog posts. On the Marcellus Shale, Mark corrected an inaccurate figure in a recent Wall Street Journal piece about jobs created in Pennsylvania from Marcellus Shale drilling.
  • On the economy, Mark wrote about a recent report from the Keystone Research Center and the national policy center Demos on a middle class that is "under attack" in Pennsylvania. He also blogged about a new policy brief analyzing Pennsylvania's June jobs report.
  • On the federal debt ceiling debate, Mark shared his op-ed on this "manufactured crisis" which ran on FoxNews.com this week.
  • Finally, on the state budget, Chris Lilienthal highlighted a new report from the Center on Budget and Policy Priorities finding that at least 38 of 47 states are cutting K-12 education, higher education, health care, or other key public services in 2012. According to the report, this cuts-only approach that most states have taken will slow the recovery and weaken the nation’s economy over the long term.

More blog posts next week. Keep us bookmarked and join the conversation!

A Manufactured Crisis

I was asked this week to pen an op-ed for FoxNews.com (seriously) about the looming crisis surrounding the debt ceiling debate in Washington. Check it out.

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