1. What do we know, what have we learned? Michigan, US, and Obamanomics Jared Bernstein Economic Policy Institute MLHS Annual Meeting jbernstein@epi.org

2. Real Economy, macro It’s official—recession, that is…but you knew that. Consumer: retrenching, big time. Investment: squeezed on credit and profit sides Exports/Imports: Maybe, maybe not… Government: most reliable source of short term growth?

3. Source: Bureau of Labor Statistics, EPI Employment Projections

4. Employment Declines Across Sectors Source: Bureau of Labor Statistics

12. Source: EPI analysis of Census Bureau data

14. Source: EPI Analysis of BLS data and Goldman-Sachs unemployment rate forecasts

15. Source: Mark Zandi, Moody’s economy.com

17. Un-Real Economy Financial Markets: Dow, Nasdaq, S&P 500, Russell 2000…all down about 40% ytd. But: good news…”Ted Spread” responding Housing: some signs bottom in sight, but no signs re uptick…prices still falling…inventory overhang; TARP: Certainly not a confidence builder yet. Fed: pushing on string but not giving up.

18. Pres/VP Elect Fiscal constraints? Deficit could go as high as 6% of GDP, but debt around 40% (avg 46% in 1990s). Must he alter his long-term plans--hth care/energy? There is a time for budget austerity; this ain’t it. Middle-class, poor, labor agenda (EFCA, min wg, UI reform, OSHA, etc…)

19. Their Agenda Morph his recovery package with House D’s (Making Work Pay tax cuts; new jobs tax credit; mortgage relief; small biz, UI) Manage TARP Tax agenda Energy/Health Care Infrastructure (who gets the jobs?) Regulation (Cooper Union speech)

20. What Have We Learned? Markets Ineq Public investment No more TBTF Financial markets

21. Learned…cont. Budget priorities Supply-side Amply funded gov’t Shampoo economy Better economists