Stop sticking our heads in the sand Time for action on jobs / Joe Gagnon

Joe Gagnon is a former senior economist for the Federal Reserve, among other points in a stunning CV.  Obama said at a town hall a couple of weeks ago that he had made two mistatkes: underestimated the recession and not taken strong enough action on housing.  We know that.  What can be done now without Congressional approval?  Quite a lot.  - GWC

by Joe Gagnon - Peterson Institute for International Economics

RealTime Economic Issues Watch: "I propose aggressive actions that can be taken by the Obama Administration and the Federal Reserve without a single vote in Congress. Indeed, to some extent, these are the same actions I proposed nearly two years ago but that were never adopted. The stakes are higher now because of the harmful consequences of allowing long-term unemployment to persist.

First and foremost, the Federal Reserve should announce an additional $2 trillion of asset purchases, including longer-term Treasury bonds, agency mortgage-backed securities (MBS), and foreign exchange. This is more than three times the size of the woefully underpowered quantitative easing of late last year (dubbed QE2) and it should be accompanied by a clear statement that more is forthcoming if the economy continues to underperform.
The goals are to push down bond yields and mortgage rates, to push down the value of the dollar in terms of foreign currencies, and to boost stock prices. All of these help households deleverage their balance sheets and encourage consumption, investment, and exports (which would become cheaper for foreign buyers as a result of the dollar’s depreciation). Businesses would need to hire more workers to meet the additional demand.
The Obama Administration can help in two important respects: First, the Administration should use its control of Fannie Mae and Freddie Mac to force them to invite all homeowners whose mortgages are already guaranteed by Fannie and Freddie, and who are not delinquent in their mortgage payments, to refinance their current mortgage balance at the new low rates regardless of loan-to-value ratio."

Law School Economics - Job Market Weakens, Tuition Rises - NYTimes.com

New York Law School Dean Richard Matasar for the last decade has argued that low-ranked schools like his cannot produce the jobs needed to pay off the cost of legal education. He has led a major and impressive effort to boost bar exam pass rates for students in the bottom quarter of the class. But that might get you a job as house counsel or for a small firm. Yet under Matasar NYLS has pursued glory - include a new building.  The Times here makes him a centerpeice of their story. - GWC (click on image to enlarge)

Law School Economics - Job Market Weakens, Tuition Rises - NYTimes.com: "Take a look at the strange case of New York Law School and its dean, Richard A. Matasar. For more than a decade, Mr. Matasar has been one of the legal academy’s most dogged and scolding critics, and he has repeatedly urged professors and fellow deans to rethink the basics of the law school business model and put the interests of students first.

“What I’ve said to people in giving talks like this in the past is, we should be ashamed of ourselves,” Mr. Matasar said at a 2009 meeting of the Association of American Law Schools. He ended with a challenge: If a law school can’t help its students achieve their goals, “we should shut the damn place down.”

Given his scathing critiques, you might expect that during Mr. Matasar’s 11 years as dean, he has reshaped New York Law School to conform with his reformist agenda. But he hasn’t. Instead, the school seems to be benefitting from many of legal education’s assorted perversities."

Jobs Picture for 2009 Law Graduates - 88% working, many in non-legal slots

The New York Law Journal reports today:

The post-graduation employment rate for the 2009 law school class fell to the lowest rate since the mid-1990s, with only 88.3 percent nationally finding a job, according to the National Association for Law Placement.

The decline marked the second year in a row that the number of jobs fell. And while there are more graduates working than many expected, a good portion of their jobs are part-time, temporary or do not require a law degree, masking the weaknesses in the job market, said James Leipold, the executive director of NALP, which released a report yesterday.

"People can't graduate with this much law school debt and nine months after graduation not be working," he said.

The study collected information on employment nine months after graduation from 192 law schools on more than 40,000 graduates, nearly 93 percent of the class of 2009.

The basic facts are in the NALP report HERE