“We will see in the next week or two, five-, six-digit, seven-digit, maybe even, some say, eight-digit bonuses for people in the banking industry,” CNN Chief National Correspondent John King said Sunday on CNN’s State of the Union. “Is there a message from the Obama White House to the banks as they prepare to make these big [bonus] announcements?”
“For Heaven’s sakes people,” Christina Romer, Chair of Obama’s Council of Economic Advisers, said in response, after pausing and appearing at a loss for words. “It does seem really ridiculous. We have had to take extraordinary actions to rescue the financial system. We always did it because that’s what had to be done for the American people. No one wanted to bail out the banks just for the banks’ sake. It’s because we know that credit is the lifeblood of a modern economy.”
“You would certainly think that the financial institutions that are now doing a little better would have some sense. This big bonus season - of course it offends the American people. It offends me,” Romer also told King.
Romer was circumspect when asked about the nation’s economy which continues to struggle more than a year after the financial crisis of late 2008 threatened another depression.
Asked to make a longer-term prediction about where the national unemployment rate, currently at 10 percent, will be at the end of 2010, Romer said “we are continuing a pattern of moderating job loss.” The top Obama economic adviser pointed out that job losses in the first quarter of 2009 averaged 691,000 per month. That figure dropped to 69,000 per month in the fourth quarter of 2009, Romer said. “That’s still way too many. It’s not job gains but it’s about a tenth of when we came to office,” Romer told King.
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And Romer called the administration’s prediction that job growth would turn positive by the spring of 2010 “a realistic estimate.” She also said that the nation’s gross domestic product, a key measure of the economy’s overall health, needs to grow at roughly two and a half percent annually in order for the unemployment rate to begin to decline.
Pressed by King about whether the unemployment rate will be lower in November when Democrats are expected to face a tough political landscape during the midterm elections, Romer said, “I don’t want to make a prediction just because there is so much uncertainty.”
“What I know is we are seeing steady progress. I’d absolutely expect that progress to continue through next year, and, I hope accelerate.”