On Tuesday, Secretary of the Treasury Tim Geithner made a bold statement on the pages of the Washington Post:
America is close to turning the page on this economic crisis. While far too many Americans are still out of work and face deep economic hardship, we have now reported three quarters of positive growth and the beginnings of job creation.
“Close to turning the page”? Really?
Most of Geithner’s op-ed is about the financial reform efforts, and I’ll direct you to Scarecrow’s fine response on that topic. What brings me back to Geithner’s op-ed this morning is this the latest news from Topeka, Kansas.
Spoiler alert: It’s not about “positive growth and the beginnings of job creation.”
The Kansas government’s revenue shortfall surged Friday beyond the $450 million threshold to place more pressure on lawmakers to raise taxes or cut spending to balance the budget.
A group of state fiscal analysts and economists met to revise tax revenue estimates for the current fiscal year ending June 30 and the subsequent fiscal year ending June 30, 2011.
Despite six rounds of spending cuts that reduced government expenditures by $1 billion during the past two years, the Consensus Estimating Group reported the recession’s grip on tax revenue would require additional work to balance the budget.
The group concluded the Republican-led Legislature and Democratic Gov. Mark Parkinson must address a $70 million deficit in the current budget year. The deficit next fiscal year would be at least $450 million, but would escalate to $510 million if Medicaid and K-12 enhancements sought by the governor were included.
Geithner may think the country is “close to turning the page,” but the folks in Kansas beg to differ:
Alan Conroy, director of the Kansas Legislative Research Department, said the state’s economic recovery remained “anemic” with corporate and individual tax receipts suffering. The problem reflects an unemployment rate expected to remain above 6 percent for months, he said.
Unemployment in Kansas went up again last month, and Kansas is hardly alone. Bill McBride at Calculated Risk — home to some of the best economics charts online — notes that unemployment is a mess almost everywhere.
When we look at unemployment rates in each state since 1976 (click the link for a larger version of that chart at Calculated Risk), four of the five states with the highest unemployment rates right now are at their 35 year peaks (NV, CA, RI, and FL). Only three states have unemployment rates below their 35 year median levels (WV, LA, and ND). According to the Bureau of Labor Statistics, the March unemployment figures show “Forty-four states and the District of Columbia recorded jobless rate increases from a year earlier, 5 states had decreases, and 1 state had no change.”
This is “close to turning the page”?
Then there are the banks — all around the country. The FDIC closed another 8 banks yesterday, bringing the 2010 total up to a nice round fifty. By comparison, last year we didn’t hit fifty bank failures until July 2. It sure sounds like failures are speeding up, not slowing down — which is not exactly my idea of getting closer to turning the page. (The FDIC has a rather daunting table of its own, showing the bank failures since October 1, 2000.)
Perhaps the former president of the Federal Reserve Bank of New York has too much of a Wall Street mindset. He’d do well to look beyond the Big Board, and take a look at the rest of the nation.
Maybe he could talk to Alan Conroy before he writes his next op-ed.