The Broader Market

by Jordan Eizenga and James Hairston

Manufacturing remains an integral part of our economy. Manufacturing companies provide well-paying, middle-income jobs. U.S. manufacturing wages are, on average, 19.3 percent higher than the private-sector average even though the sector employs an above-average share of those without a college education. Manufacturing also drives innovation. Manufacturing companies account for more than half of all public and private research and development in the United States, the benefits of which spill over into other sectors.

While U.S. manufacturing today suffers from lower employment levels and slower growth in output than in the past, the sector is by no means a lost cause. Much can be done to bolster its competitiveness. For one, the federal government can help create jobs and increase output by improving the performance of manufacturers by increasing their access to capital.

For more see

here.

by Alon Cohen, Jordan Eizenga, Bracken Hendricks, John Griffith, and Adam James

Half a million houses, many of them vacant and deteriorating, are languishing in a bloated U.S. real estate market, threatening to turn some cities into ghost towns, undermining the stability of working families, and proving to be an anchor on a shaky economy. Many of these vacant homes, nearly a quarter-million, are controlled by the federal government.

If the situation wasn’t already bleak enough, there are also more than a million additional American homes saddled with delinquent mortgages that are in the process of foreclosure. Chances are many of these homes will also end up as the property of the federal government. The only way to lower the inventory of decaying homes is to find a use for the ones we have before new ones swell the pool. Without assistance, the current “overhang” of foreclosed homes is expected to take four years to work back into the market.

The good news is the Obama administration and independent federal regulators are formulating plans to sell government-controlled foreclosed properties to investors who would bring them onto the rental market. (For more, see here).

by Sarah Rosen Wartell, David Min, and Jordan Eizenga

Our nation’s slowing economic recovery prompted policymakers to consider ways to shore up consumer demand and get our economy moving again. One central focus of these efforts was to find ways to improve the weak housing markets, where hundreds of thousands of foreclosed homes are keeping home values down and depressing household wealth, thus complicating efforts to generate demand and create jobs.

The Obama administration already had in place an important program that had the potential to strengthen the housing market, stimulate the economy, and increase employment. To combat the foreclosure crisis, the administration created the Home Affordable Refinance Program, or HARP for short, shortly after President Barack Obama took office.

by Sarah Rosen Wartell, David M. Abromowitz, Bracken Hendricks, Alon Cohen, Jordan Eizenga, and John Griffiths

The Federal Housing Finance Agency, in consultation with the Departments of Treasury and Housing and Urban Development, last month issued a “request for information” to solicit ideas for selling or otherwise disposing of foreclosed properties owned by the Federal Housing Administration and the two mortgage finance giants Fannie Mae and Freddie Mac, both of which are under government conservatorship. The housing team at the Center for American Progress responded to FHFA’s request for information on the disposition of government-owned foreclosed homes. This is a summary of our response. (The full response letter can be downloaded here.)

by Michael Linden, John Griffith, and Jordan Eizenga

Stimulus is now a dirty word, especially among Republicans in Congress. But it wasn’t always so. In January 2008 when the economic picture was far less dire and the unemployment rate was only 4.8 percent, 165 Republicans in the House of Representatives and 33 Republican senators voted to pass a stimulus package with an estimated cost of $152 billion. That package provided tax cuts of up to $600 for individuals or $1,200 for married couples, plus an additional $300 per child. The bill also contained a number of temporary tax breaks for businesses. And just in case you thought President George W. Bush’s stimulus bill was simply a bunch of tax cuts, it also included $40 billion in direct spending. The legislation was even called the Economic Stimulus Act of 2008.

For more of the article, see here.