Obama Dazzles On Tour, Faces Gloom At Home
Wednesday, 08 April 2009

President Obama, by all accounts this last week, has dazzled the Europeans with his charm, cool demeanor and infectious smile and struck a very positive note in Turkey, a predominantly Muslim country, where he declared in no uncertain terms that "America is not at war with Islam".

Obama's message was in sharp contrast to his predecessor George W. Bush. His declaration at the Turkish parliament earned him instant ovation not only from the Muslims in Turkey but also from moderates throughout the Islamic world.

But all the exuberance and optimism generated in Europe and Turkey seemed somewhat out of place at home in the light of the latest gloomy economic data released last week.

Despite some brief positive signs in some sectors, like housing and retail sales, it was business as usual again.

Americans received an unwelcome shot of reality with news that the unemployment rate spiked to a 25-year high of 8.5 percent in March.

With employers shedding another 663,000 workers last month, the total number losing jobs stands at nearly two million in the past three months. So far, 5.1 million people have become unemployed since the recession began in December 2007.

The total number of jobless Americans now stands at 13.2 million.

Economists say there is no longer any doubt that the current recession will be the longest yet in America since World War II. Previous downturns — the contractions of the early 1970s and the early 1980s — each lasted for 16 months.

As for the current recession, the US economy already has been in decline for 16 straight months.

Experts and commentators are now asking how much longer it will last and how much worse it will get.

Measured by the labour market, most commentators say the answer to both questions is "a lot".

They have apparently come to that conclusion based on experience of previous slowdowns.

It is widely believed that employers will continue to cut jobs as long as the economy is weakening and will resume hiring only once they are sure a recovery is under way.

But the outlook remains bleak ahead as the traditional paths to recovery are especially blocked.

Economic rebounds — especially from steep declines — are generally led by recovery in the housing market. This time, housing is unlikely to provide the spark. By prudent estimates, housing sales and prices will not begin to turn up appreciably until 2010 at the earliest.

Past experiences also show upturns are marked by recovery in the sales of big-ticket items and by resurgence in exports, both of which are traditionally dominated by automobiles.

Given the sad state of affairs in the auto industry, no one really believes that the industry will be able to spur recovery anytime soon, either in terms of sales or employment.

To be fair, the $789 billion economic stimulus package passed in February has contributed to ease the ravages of unemployment, mainly by bolstering unemployment benefits and health care coverage for the jobless.

But experts say that ad hoc measures to create or save a few million jobs will not be enough to combat the current scale of unemployment.

They insist that more vigorous and long-term efforts like fresh stimulus bills could be needed to inject fresh momentum into the struggling economy.

Source: bdnews24.com

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