Geithner says unemployment likely to remain unacceptably high for a long time
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On the eve of the release of the latest unemployment numbers, Treasury Secretary Timothy Geithner said on Thursday that the jobless rate would likely remain unacceptably high for a long time.
Geithner used an interview on NBC’s ‘Today’ show to lower expectations on the jobless numbers to be released on Friday. The current unemployment rate is 9.7%, and many economists expect the new numbers will show some job growth but mainly in the public sector.
The unemployment rate ‘is still terribly high and is going to stay unacceptably high for a very long time,’ Geithner said.
‘Just because this was the worst economic crisis since the Great Depression,’ Geithner said, ‘a huge amount of damage was done to businesses and families across the country ... and it’s going to take us a long time to heal that damage.’
More than 8-million jobs have been lost in the recent recession, and recovering most of them could take years. That, of course, is ominous news as Democrats head into a midterm-election year with polls showing their majorities in both houses of Congress are threatened because of an electorate particularly unhappy with incumbents.
Recent reports from private payroll companies show that the number of jobs created in the private sector probably fell last month. But government jobs have been increasing, particularly because of temporary hiring related to the census.
The Labor Department on Thursday said the weekly new unemployment benefit claims dropped 6,000 to a seasonally adjusted 439,000, marking the fourth such decrease in five weeks.
The four-week average of claims fell by nearly 7,000 to 447,250, the lowest total since the week of Sept. 13, 2008.
That report is considered good news, showing that the jobs market, which is usually last to heal after a recession, is improving.
Geithner also used his interview to push for financial reform, backed by the Obama administration and now pending in the Senate. With the healthcare insurance overhaul out of the way, financial reform is next on the Obama administration’s agenda.
Part of voters’ unhappiness with the economy includes how the government handled the taxpayer-funded bailouts that were part of the economy-rescue mission.
Geithner agreed that voters were unhappy with money going to Wall Street even as Main Street suffered with unemployment and falling housing prices. He defended the administration, saying it had no choice but to rescue the financial system, a process that began under former President Bush and includes the Troubled Asset Relief Program, which poured billions of dollars into institutions. Obama has pledged to recover the money.
‘As the president has said, we had to do some very unpopular things,’ Geithner said. ‘People looked at what had happened.
‘It’s not fair. It’s deeply unfair,’ he said. President Obama ‘had to decide whether he was going to act to fix it or stand back ... and that would have been calamitous for the American economy.’
-- Michael Muskal
Twitter.com/LATimesmuskal
Photo: Timothy Geithner speaks to members of the United Steelworkers Union at its headquarters in Pittsburgh, Penn., on March 31, 2010. Credit: Jeff Swensen / Getty Images
