EconomicCrisis.US

Blame China, Saudi Arabia and, yes, Canada.

Much of the fault of the financial crisis has been heaped on Wall Streeters, unscrupulous mortgage lenders and weak regulators. But in a new research paper, economist Ricardo Caballero says there is another major group of contributors to America’s monetary mess who are not getting the blame they deserve: foreigners.

“There is no doubt that the pressure on the U.S. financial system [that led to the financial crisis] came from abroad,” says Caballero, who is the head of MIT’s economics department. “Foreign investors created a demand for assets that was difficult for the U.S. financial sector to produce. All they wanted were safe assets, and [their ensuing purchases] made the U.S. unsafe.” (See the financial crisis after one year.)
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After receiving billions of dollars in government bailouts, U.S. banks are under increasing pressure to start lending money again. With banks paying back emergency government loans faster than expected, President Obama is reminding bank executives that it is their turn to help the U.S. economy. But as 2009 comes to a close, some analysts warn the banking crisis is far from over.

As U.S. banks repay billions of dollars in government bailout funds, President Obama held meetings with top bank executives in December, telling them it is time to return the favor.

“The way I see it, having recovered with the help of the American government and the American taxpayer, our banks now have a greater obligation to the goal of a wider recovery,” President Obama said.
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As we reach the end of a miserable 2009, signs continue to mount across the globe that the world economy is stirring back to life. The U.S. finally returned to growth in the third quarter, with its strongest showing in two years, India posted inspiring 7.9% growth and the results out of tiny Taiwan, one of the economies slammed the hardest by the global recession, were so impressive one economist beamed that the island “got its groove on.” Stock markets, aside from a downward blip here and there, have generally been buoyant. During this season of Thanksgiving and holiday cheer, there seems to be good reason to give thanks and be cheerful.
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According to the National Bureau of Economic Research, the U.S. economy was in recession from March 2001 to November 2001.  The economy eventually recovered from that downturn, but jobs were slow to be created in that recovery.

In fact, it took until June 2003 before the number of employed people in the civilian labor force equaled the number seen at the start of that recession.  June 2003 — or 19 months after the 2001 recession was deemed to be officially over — was also the month the unemployment rate peaked at 6.3%.

These statistics play a large role in why the period after the end of the 2001 recession is commonly referred to as a jobless recovery.
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