Jim Carr

Recent Posts by Jim Carr

The Great Ambiguity of the US Economy: Put America Back to Work!
Apr 21, 2010Jim Carr
As the economy shows signs of recovering, how will we measure the recession? Jim Carr says -- think jobs.
As the economy shows signs of recovering, how will we measure the recession? Jim Carr says -- think jobs.

Earlier this year, New York Times reporter Peter Goodman wrote that the Great Recession has been replaced by the "Great Ambiguity." This obscure, albeit apt, description of the U.S. economy seems still to be accurate today, as reflected by the action taken last week by the National Bureau of Economic Research (NBER). Despite consecutive monthly gains in employment and wages sufficient to declare an official end to the recession, NBER took the conservative posture of concluding that more data is necessary before it can call an official end to the economic downturn. That decision was unexpected although not surprising. Almost every major piece of economic news supporting the notion the economy has rebounded is fraught with qualifiers. Bank profits for the largest firms, for example, are tempered by ongoing distress in the real estate markets and a continuing failure to lend by those institutions. At the same time, bank failures for smaller institutions that were not prioritized in the financial system bailout remain high with 140 failing last year and 48 banks having been taken into receivership as of April 16. That compares to only 25 failures in 2008 and three failures in 2007.

The welcomed increase last month of more than 160,000 non-farm jobs was offset by the reality that as many as 120,000 new jobs are needed each month just to absorb new entrants to the labor market and nearly 50,000 of the jobs created in March were temporary positions related to the 2010 Census. Meanwhile, long-term unemployment is at an historic high with the median length of joblessness exceeding 31 weeks. The economic survival of millions of unemployed workers swings in the balance as Congress wrenchingly extends long-term benefits on a monthly basis, as if the economy any day now will absorb those laid-off workers. Going back to 1982, each recovery has been slower to produce new jobs, reflecting structural shifts within the U.S. economy and international competitive challenges that have been long in the making. The New America Foundation estimates 330,000 new jobs are needed each month for the next five years to close the current jobs gap, yet the economy created only 100,000 per month on average between 2001 and 2007. Many of those jobs were in the bloated financial sector that has now subsided. And, strong business productivity gains over the past year suggest many jobs lost during this recession will not return.

Further, while unemployment is generally considered a lagging indicator of the health of the economy, it is currently the leading cause of foreclosures. Although delinquencies have fallen for the second consecutive month, foreclosures grew by nearly 20 percent between February and March of this year. RealtyTrac estimates foreclosures for 2010 will total nearly 3.5 million. It's difficult to envision a robust and sustainable recovery when the problem that unhinged the credit markets and economy continues to accelerate.

Put America Back to Work

Last year, the President Barack Obama articulated the need to put America back to work through a major infrastructure investment program. We should return to that idea and enact such a program. The nation's infrastructure is aging and in dire need of repair or replacement. Investing in infrastructure could create important efficiencies to the economy, promote green jobs, improve the environment, and provide needed and targeted employment and training opportunities in disadvantaged urban and rural communities, as well as Native American Tribal Lands. More jobs would also reduce foreclosures. Infrastructure spending should not be limited to bridge and highway construction in the suburbs. Rather it should focus on improving or building commuter and high-speed rail lines, upgrading communications systems, renovating or building schools and community colleges, as well as state-of-the art job training facilities, investing in dams, waterways, and water treatment facilities, reclaiming key wetlands, and improving the basic livability of impoverished neighborhoods. Concerns about large deficits are legitimate. The debate, however, is not about whether deficits are good but rather when are they necessary and what spending acts as investments that help reduce them over time. Stimulating jobs while improving the nation's infrastructure would be a more effective response to the current economic and deficit challenges than culling through reams of ambiguous economic data attempting to statistically demonstrate a recovery has ensued.

Roosevelt Institute Braintruster James H. Carr is Chief Operating Officer of the National Community Reinvestment Coalition.

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Lessons from Black History: The Present is Reflection of the Past
Feb 18, 2010Jim Carr
One year after the historic election of Barack Obama, and in honor of Black History Month, we asked leading African-American thinkers to reflect on lessons we must bear in mind in order to advance principles of social and economic justice in public policy.
One year after the historic election of Barack Obama, and in honor of Black History Month, we asked leading African-American thinkers to reflect on lessons we must bear in mind in order to advance principles of social and economic justice in public policy. Jim Carr argues that failure to address the problems of the most disadvantaged will continue to impact the economy overall.

African-American history offers important lessons for America regarding the origins of the current economic crisis, how most effectively to climb our way out this mess, and how best to avoid a similar calamity in the future.

In his first State of the Union address last month, President Barack Obama described the nascent economic recovery this way: "The worst of the storm has passed... but the devastation remains." This astute description of the economy can also be applied to the effects of the aftermath of more than a century of discrimination.

One of the most profound and current lessons is that failure to address the unique problems of the most disadvantaged households in America can allow those problems to spill over and overwhelm the nation as a whole. The current collapse of the housing and credit markets have their origin in unfair, reckless, and deceptive lending practices that disproportionately targeted communities of color for more than a decade before finally spreading beyond minority neighborhoods throughout the nation. Predatory lenders principally targeted communities of color because those neighborhoods had never recovered from - and therefore remained vulnerable as a result of - more than 100 years of legally permissible discrimination in employment, education, housing, financial services, and practically every other aspect of the economy and society.

Failure to address the disproportionate damage to communities of color resulting from the current crisis will leave the US economy as a whole in a tenuous position as the nation moves further into the 21st Century. Within 35 years, more than half of the nation's population will be people of color. Even before the current crisis, this fastest-growing segment of American society disproportionately lacked access to meaningful and secure employment, quality education, decent and affordable housing, dependable health care, reliable retirement savings, and other wealth-building opportunities. The disproportionate high levels of foreclosure in communities of color, combined with double digit unemployment rates for African American and Latino workers, may result in the greatest loss of wealth for those communities in nearly a century and will further economically marginalize those families and communities for years to come.

Broad-based policies to rebuild our economy are essential. But universal policies that fail to address the complex challenges of historically disenfranchised communities are insufficient in themselves. Ensuring the civil rights of and providing opportunities for, people of color is critical to enabling minority families and communities to achieve their greatest potential. Sadly, neither universal policies nor targeted interventions have been forthcoming on a scale adequate to deal with increasing foreclosures, staggering unemployment, and a financial system badly in need of reform.

And, the dire long-term implications for all Americans from this reality, appears lost to many in Washington.

Roosevelt Institute Braintruster Jim Carr is Chief Operating Officer of the National Community Reinvestment Coalition.

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