LectureHop: Where My Money At?
Written by Bwog Staff
Ever watchful of your career success, Bwog sent our anonymous renegade chief expert to the World Leaders Forum for a lecture from Federal Reserve Board Governor Daniel K. Tarullo.
Worried about getting a job? According to last night’s World Leaders Forum lecture by Federal Reserve Board Governor Dan Tarullo, the employment prospects for college grads are fairly good. Unfortunately, he could not say the same thing for the labor market at large.
Before the economic doom and gloom commenced however, PrezBo took the time for an introduction. Our peerlessly coiffed leader expressed disbelief at conservative perspectives on the financial crisis. This was a fitting lead-in for Tarullo—a Clinton administration vet and Obama appointee who has long been calling for an overhaul of the financial regulatory system.
But as Tarullo said himself, he had not come to Columbia to discuss the financial crisis, but “what has happened in the aftermath of the financial crisis”— chiefly the bleak unemployment picture. Everyone knows the 9% unemployment rate that has been hanging like a millstone around America’s neck, but Tarullo argued that even this elevated rate “does not tell the whole story.” He cited the 15% unemployment for those without a high school degree, along with the roughly 6 million discouraged workers who have given up searching for employment. Even the unemployment rate for recent grads has doubled to 4.2%, despite such a number being less than half of the national average. On the plus side, the wage premium for a college degree has increased from 1.5 to 2 times the average than that of high school graduates.
The Governor broke this unemployment crisis down into two components— the “acute” or more cyclical unemployment from depressed aggregate demand and “chronic” structural employment issues. While acknowledging the chronic problems, Tarullo argued that the current dismal employment outlook is primarily a function of low aggregate demand, and that as a result, the situation requires an “immediate response.” Without strong policy to combat continued demand-related unemployment, it “could transfer from an acute to another chronic problem.”
He took time to address all the haters out there who claim structural factors, such as skills mismatch, are America’s chief labor problems. Fed data blows holes in such an argument he contested, and fiscal stimuli are desperately needed to aid our “economy slogging though the mud.” Specifically, he called for a Fed repurchase of mortgage-backed securities, which could aid the still beleaguered housing market.
All in all, it was a very wonky liberal policy address— a call for government action on the eve of a crucial vote on the part of the American Jobs Act. The message had to make at least one struggling Columbia alum very happy.