Depression in Washington
Sever Plocker says mood in American capital gloomier than he has ever seen before
I have been to the American capital many times in the past, before and during recessions. However, I have never seen so many gloomy faces as I saw during my current visit.
Never before did the people I spoke with, Administration and Fed economists, seem so scared and helpless. Never before did I hear so many times the words "slowdown," "depression," and "the 1930s."
It was "Black Friday" for the American job market: The November employment figures published by the government were a negative surprise even for the pessimists. More than half a million Americans lost their jobs in one month; about two million employees have been laid off since the beginning of the year.
This is the largest and broadest wave of layoffs to hit the American job market since the 1970s, and it is starting to be reminiscent of the 1930s.
A total of 10 million Americans are actively looking for a job, yet another nine million or so have despaired and are no longer part of the official workforce. Forecasts for double-digit employment rates, ranging from 11% to 12% of the workforce, can be heard everywhere, and are not only uttered by pessimistic analysts. The American job market is collapsing, and the worst is yet to come.
In a weekly radio conversation Saturday morning, President-elect Barack Obama revealed the first details of the plans formulated by his team of economic advisors. My administration, said Obama, will adopt a plan that would see government investment in America's deteriorating and neglected infrastructure to an extent that equals the great government investment in the national road system in the 1950s.
Obama told the American nation on Saturday that it should not be expecting any miracles. Before things will become better they will become much worse.
