Our goal through this medium is to provide relevant information for those looking for insight, breaking news and sometimes, just a different take on the financial sector as a whole. Whether it’s concerns about the growing credit card debt, which, by the way increased by $64 billion in the 4th quarter of 2011 alone, or if you’re part of that 20% of Americans who are struggling with medical debt – a number that’s growing on a daily basis – we want to ensure the information is relevant, current and most importantly, accurate.
There are times, too, that we take a slightly different path. Sometimes, looking to the past to better understand the current events and future trends is just what’s needed to gain a new and realistic view. This is one of those times.
With so many Americans who are still out of work and with that 8.3% national unemployment number that refuses to budge (Bureau of Labor Statistics), we thought we’d compare President Obama’s efforts on stimulating the economy via the financial sector with what a former president, one that President Obama is often compared with, did in his efforts of “fixing” the nation during his time in the White House. We weren’t surprised that the two, Presidents Roosevelt and Obama, had so much in common – specifically the difficult time in history both are dealing with. Both came into office under the public spotlight and with millions waiting for their president to save the day and ultimately save the nation.
The big difference, of course, is the technological factors – and make no mistake, the advances in technology are very significant. With the recent announcement that more than 1.5 million Americans might have had their credit card information compromised due to a breach in Global Payments processors, one can’t discount the relevance of technology.
A Look Back
The Roosevelt administration, in its efforts of stimulating the struggling economic in the 1930s, made the move to go on a massive spending spree. This degree of spending was on a scale never before seen in a time of peace. All of this borrowing resulted in a complete annihilation of the budget by the time 1934 came to a close.
The government not only undertook massive expenditures for its own use but it also incorporated public works programs that allowed local and state governments to take on their own massive debt. The purpose was to line everything up in such a way that work would be created for the unemployed. Federal funds kicked and allowed many agencies, especially those within the financial sector, to make new loans or increase current loans for various industries and farmers. The goal here? To create new credit opportunities and to stimulate spending.
All of this spending lent to new levels of indebtedness that shifted the weight and burden on various debts. It’s only natural, then, that bankruptcy laws were adjusted accordingly, which, of course, allowed reorganization efforts never before known. Other new laws resulted in changes in how one’s mortgage was managed and repaid. All of this – every bit of it – was done to improve Americans’ lot in life.
Current Day
These days, it’s the vision of “good jobs for everyone”, according to the Department of Labor. The goal here is much the same as what President Roosevelt gambled on more than 7 decades ago. The Secretary of Labor Hilda L. Solis has acknowledged the many dynamics in Americans’ situations. From credit card debt, the lack of health care insurance and, of course, the unemployment rates are all important to her and her administration.
The Employment and Training Administration is attempting to establish what’s now known as the Workforce Innovation Fund. Like Roosevelt, this is a series of grants versus loans with the goal of “reinvigorating the workforce development system to meet the contemporary job training and educational needs of workers while providing employers with highly trained personnel”. This all sounds great, but many are wondering just how realistic it truly is.
It’s an aggressive program and one that has three “broad levels”. They include core services such as job search and placement assistance, intensive services that include skills assessments and career counseling and training services to help Americans gain on the job training and access to skill upgrading.
Yes, But…
While this is all impressive, there are a few questions that simply haven’t answered. First, the program must be made available to Americans. With more than 2 million that have been employed for extended amounts of time, the growing (and unexplained) rise in gas prices and the absence of any light at the end of the tunnel has many wondering just how well these programs will work if no one shows up to participate. Is it really that bad? Yes, say many analysts and it’s only getting worse.
It’s indeed a vicious cycle and one no one seems to be able to break. This is an election year and while these considerations are always crucial, for now, all eyes are on the candidates not so much to “fix” it, but rather, to introduce the “methods of fixing it” if they are elected. In the meantime, Americans continue to struggle.
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