Unemployment soars to 25-year high
TEXT OF INTERVIEW
Steve Chiotakis: Just out this morning, the Labor Department reports the nation’s unemployment rate jumped to 8.1 percent in February. That’s up a half a percent from January. Its the highest level since 1983. Employers shed 651,000 jobs. Higher than what was expected by analysts.
We have James Angel, a finance professor at Georgetown University. Professor, thanks for being with us this morning. What do these numbers say to you?
JAMES ANGEL: It tells us we are in a really bad situation, that we are suffering from the aftershocks of the policy mistakes of last fall. The policy blunders of last fall hit the brakes on the global economy. And just as when a train stops suddenly and then you hear every car behind it go bang, bang, bang, bang, bang, that’s what’s moving through the global economy right now.
Last month we lost 651,000 jobs. Now if all of those people lined up in one big unemployment line that would stretch all the way from Los Angeles to San Francisco, so the news that we’ve got this morning confirms what we all know and that is we have a big problem.
CHIOTAKIS: You mentioned policy blunders from last fall. What about new policies that are in place now — Does that help us get out of this hole?
ANGEL: Yes. One thing to remember is that unemployment is a lagging indicator of what goes on in the economy. So this is really not new news here. We know we’ve got a problem. It’s going to take time for all of the recovery policies to bear fruit. The money that’s been spent on the stimulus, the money that’s been spent to support the banks — that is all going to bring around a turnaround. But it’s not going to happen overnight. You know, if you plant a seed, it doesn’t turn into a full-blown plant overnight either. So now we have to wait in the springtime for the new crops to grow.
CHIOTAKIS: Professor, what are you seeing for the next few months — more losses?
ANGEL: Yes. I mean there’s going to be more bad news. Now my crystal ball was always cloudy so I’m not going to say, ‘Oh yes, unemployment will peak at blah blah blah number.’ But we’re still going to see more reverberations, that more companies will announce they’re in trouble, more people are going to lose their jobs. But we will probably see some signs of a turnaround by the end of the year. We’re already seeing some thawing in the credit markets. The governments around the world are making it pretty clear that they’re not going to repeat the same mistakes that were made last year, or repeat the mistakes that led to the Great Depression. So even though we have a challenging situation right now, it’s not going to be Great Depression 2.0.
CHIOTAKIS: Alright, Professor Angel at Georgetown University, thank you for joining us this morning.
ANGEL: You’re quite welcome.
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