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To combat the economic challenges facing America, President-elect Barack Obama’s administration has decided to take the bull by the horns and create a new position in the office of the vice president. Vice President-elect Joe Biden announced today that Jared Bernstein will be his chief economist and economic policy adviser.
“Jared Bernstein is an acclaimed economist, and a proven, passionate advocate for raising the incomes of middle-class families. His expertise and background in a wide range of domestic and international economic policies will be an invaluable asset to the Obama-Biden administration,” Biden said. “It’s an honor to have him on my team, and I look forward to his advice and counsel.”
The announcement came as the Department of Labor reported that 533,000 jobs were slashed in November, bringing the unemployment rate to 6.7%, its highest in 34 years. The economy reacted to the news negatively, with the major indexes down more than 1% and the Dow Jones Industrial Average spiraling downward by 180 points just before noon.
“The 533,000 jobs lost last month … is more than a dramatic reflection of the growing economic crisis we face. Each of those lost jobs represents a personal crisis for a family somewhere in America,” Obama said.
Job losses in September and October also turned out to be much worse, reports the Associated Press. Employers cut 403,000 jobs in September, versus 284,000 previously estimated. Another 320,000 hit the chopping block in October, compared with an initial estimate of 240,000, says the Labor Department report. AT&T Inc. eliminated 12,000 jobs, and DuPont Co. cut 2,500 jobs just yesterday.
The report also revealed that a record 31.6 million Americans are now receiving food stamp benefits, the highest number since the 1960s.
In addition, job loss has had an impact on mortgage delinquency rates, reports the Mortgage Bankers Association today. The percentage of loans at least a month overdue or in foreclosure was up from 9.2% in the April-June quarter, and up from 7.3% a year earlier, says the organization. Although stabilization of foreclosures has occurred the report suggests that it is a result of state laws implemented to modify loans and stave off foreclosures.
To show his dedication to alleviating the country’s economic crisis, Obama quickly strung together an economic team last month that includes some of the country’s most prominent economists including some mainstays from President Bill Clinton’s presidency. Obama says he is working on an economic recovery plan that will save or create at least 2.5 million jobs over two years by rebuilding roads, modernizing schools, and investing in clean energy solutions.
Meanwhile, stock intended to eventually earn taxpayers a profit as part of the Bush administration’s massive bank bailout has lost a third of its value — about $9 billion — in barely one month, according to an Associated Press analysis.
Neel Kashkari, the director of Treasury’s Office of Financial Stability, which oversees the $700 billion financial rescue fund, made promises at a Mortgage