The Economy Today: Weatherizing Amidst The Storm

Support is divided on the hill for the new financial regulation plan announced yesterday that would give more regulatory power to the Federal Reserve, reports The New York Times. There is consensus among senators that reform is needed, but some, like Senator Chris Dodd, aren’t convinced that empowered the Fed is the answer. Dodd wondered “if giving the Federal Reserve more authority ‘is like a parent giving his son a bigger, faster car right after he crashed the family station wagon.’”

The Times also reports that small-business owners have been hurt by the recession. It’s a pretty predictable tale of woe. Plans to hire employs have been shelved. Inventory is trimmed. Employee expenses are being eliminated. Small businesses rely on credit cards and loans to expand and operate and since lending has dried up, many small operations are struggling.

USA Today blames the banks with this headline: “Foreclosures grind on as lenders fail to modify loans,” reporting that despite the administration’s $75 billion program to reduce foreclosures, few homeowners have been able to take advantage because banks aren’t pulling their weight: “Homeowners who apply for mortgage modifications are finding that banks typically are taking 45 to 60 days to respond to inquiries, according to a report this month by NeighborWorks America, a provider of foreclosure-prevention counseling.” Lenders say they’re doing the best they can, but some analysts think that these delays are intended to soften the blow of the eventual rejection.

And, in local news, stimulus funds for weatherization projects is being announced this week. North Carolina and Utah are among the states receiving money to increase energy efficiency. And in Florida, one municipality is suggesting that residents pay a “fire fee” to help sustain the fire department during the recession.

“What recession?” asks the Los Angeles Times, reporting that Kobe Bryant’s used jersey that he wore in game 1 of the NBA finals was auctioned off for $35,000. The charity auction raises money for the American Indian College Fund.

“Stimulus has done little for Tennessee jobs,” asserts The Tennessean. One indication is new unemployment figures: “state labor officials announced the unemployment rate in Tennessee had reached double digits for the first time since early 1984, soaring to 10.7 percent in May, up from 9.9 percent in April.” Although the state has only spent $544 million out of the $5 billion promised, much of that money has gone to fund TennCare, a health-care program for the poor. Unemployment benefits have also eaten away at the sum. Most of the jobs are expected to be created in the highway-construction sector, as the state prepares to spend $572 million to repave and build. One estimate says this will generate 15,000 to 20,000 jobs. But, for the most part, Tennessee officials have not tracked job growth. One network of career centers in Nashville is tracking stimulus jobs, but state-level accounting is low.

Another story of lacking oversight comes from the Raleigh News and Observer which reports that while North Carolina will receive $132 million to spend on weatherization, there are early signs of brewing chaos. Different companies are vying for contracts and for employee training, and an influx of applications is overwhelming social-service agencies. The program is expected to launch in August, leaving the state with little time to prepare.

In Utah, too, a weatherization program is underway according to The Salt Lake Tribune. The state will receive $15 million to help low-income families cut energy bills, create green jobs, and reduce emissions.

An editorial in Florida’s Fort Myers News-Press urges readers to support a proposed “fire fee” to support the fire department during the recession. Homeowners are asked to pay about $17 a month to “raise $21 million per year of the department’s $25 million budget.” The News Press says “the city needs a well-staffed department, and residents should be willing to pay for it – especially when the proposed fee is relatively modest.”

Katia Bachko is on staff at The New Yorker.