Economy Watch: President States His Intentions

In his second inaugural address on Monday, President Obama touched on a number of presumed priorities of his second term, including economic policy.

By Dees Stribling, Contributing Editor

In his second inaugural address on Monday, President Obama touched on a number of presumed priorities of his second term, including economic policy. At one point, he made a statement about how to handle entitlements, in language bound to be pleasing to supporters and irritating to opponents.

“We must make the hard choices to reduce the cost of health care and the size of our deficit,” the president said. “But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future. For we remember the lessons of our past, when twilight years were spent in poverty, and parents of a child with a disability had nowhere to turn.”

“We do not believe that in this country, freedom is reserved for the lucky, or happiness for the few,” he continued. “We recognize that no matter how responsibly we live our lives, any one of us, at any time, may face a job loss, or a sudden illness, or a home swept away in a terrible storm. The commitments we make to each other—through Medicare, and Medicaid, and Social Security—these things do not sap our initiative; they strengthen us. They do not make us a nation of takers; they free us to take the risks that make this country great.”

ILO says worldwide unemployment rising

The International Labour Organization reported on Monday in its publication “Global Employment Trends 2013” that more than 197 million people worldwide are currently without work. Moreover, another 5.1 million people will be joining the ranks of the unemployment around the world in 2013, predicted the organization, which is a UN agency. It estimates that the total will go up by another 3 million in 2014.

A net of about 28 million people have lost their jobs since the onset of the international financial crisis in 2008, according to the ILO. But that number understates things, because the organization also estimates that in that time about 39 million people have dropped out of the labor force entirely. Like in unemployment calculations in the U.S., people not looking for work aren’t classified as unemployed by the ILO.

Among other things, the organization posited, high unemployment rates in the developed world—11.8 percent in the euro zone, for instance—have hurt demand for workers in many other parts of the world. The ILO said that it was particularly worried about joblessness among people aged 15 to 24, some 75 million of whom are currently without work.

Wall Street was closed for the Martin Luther King Jr holiday on Monday, but other indexes worldwide were mixed. In Europe, ahead of a meeting of euro-zone finance ministers, the Stoxx Europe 600 Index was up 0.3 percent, the highest level in about a week, and other European exchanges saw gains. On the other hand, Asian stocks were mixed on Tuesday (in Asia) after the end of the Bank of Japan announced its own version of QE3, or open-ended asset purchases.

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