by Matthew Hay Brown

Another jobs report: another opportunity for Republicans and Democrats to trade blame for the stumbling economy.

"It is highly disconcerting that the nation has again lost jobs for the sixth month in a row," Senate Majority Leader Harry Reid said. "These job losses, coupled with the rising cost of living and a continuing housing crisis again highlight the failed economic policies of the Bush Administration."

House Minority Leader John Boehner called the report "the clearest evidence yet of the destructive impact the Democrats' economic policies are having on American jobs."

"Since taking the Majority 18 months ago, Democrats have refused to increase production of American energy, costing our economy jobs and sending gas prices soaring," the Ohio Republican said.

"They have saddled stressed-out taxpayers with the largest tax hike in American history, putting even more pressure on families and small businesses. And they've stood flat-footed while corrupt trial lawyers have run rampant with job-killing lawsuits against American employers, driving jobs overseas and appeasing their big donors by refusing to even hold hearings on evidence of industry-wide corruption in the trial lawyer business."

House Speaker Nancy Pelosi sees a very different story.

"Under Democratic leadership, Congress has passed extended unemployment benefits that will help 3.5 million Americans pay their bills as they look for a job, and provide much needed stimulus to our economy," the California Democrat said.

by Frank James

It was a bad news, good news morning for economy watchers.

The bad news was that the economy shed 62,000 jobs in June, the sixth straight month in which employers cut their payrolls. Meanwhile, the unemployment rate came in at 5.5 percent, unchanged from the previous month.

The good news was that the numbers reported by the U.S. Labor Department were pretty much what economic analysts and Wall Street investors expected so the financial market's initial reaction was one of relief.

The overall job losses for the first half of the year amounted to 438,000, according to the Labor Department. What's really raising anxieties is that there's no sense that the economic blood-letting is nearing an end.

As the Associated Press reported:

Private analysts predict the economy will continue to shed jobs in the months ahead, pushing the unemployment rate higher.

"The economy is at risk of a hard landing," said Brian Bethune, economist at Global Insight.

by Andrew Zajac

This can't be good for the campaign of the presumptive Republican presidential nominee John McCain.

The IRS is trying to serve a summons on Swiss bank UBS AG seeking information on U.S. taxpayers who may have used the bank to gin up records to avoid billions in taxes on offshore investments.

Top McCain economic advisor Phil Gramm is vice chairman of UBS' U.S. division which already has drawn unflattering scrutiny for writing off big losses in subprime mortgage-backed securities.

Gramm, the former Texas senator and presidential candidate, was registered to lobby Congress last year on mortgage securities issues on behalf of UBS.

There's no indication that Gramm has any involvement in the tax-avoidance scheme, but his presence in the pilothouse of a global finance company under fire from U.S. regulators is precisely the sort of special interest coziness that McCain insists he represents a break from.

At least five top McCain aides have left the Arizona senator's camp because their lobbying or business involvements were judged to be more than a maverick, tell-it-like-it-is campaign could bear.

The RNC was quick to point out today that Barack Obama has his own ties to UBS in the person of Robert Wolf, CEO of UBS Americas, who is a major fundraiser for the Illinois Democrat.

But Gramm's involvement in problematic economic policy issues benefiting UBS run to more than lobbying in the midst subprime mess. (Gramm successfully advocated defeat of a bill that would have given bankruptcy judges the clout to rewrite mortgage terms to prevent homeowners from losing their houses.)

As a senator he sponsored legislation that knocked down the regulatory wall separating commercial and investment banks, which in the view of some critics exacerbated the mortgage meltdown.

As a UBS lobbyist in Texas, he proposed selling so-called "death bonds", a complex financial product which would have allowed the ailing state teachers retirement system to take out life insurance policies on members and make money if they died prematurely.

Here's a copy of today's Justice Department's announcement of action against UBS:

by William Neikirk

LEWES, Del.-- At one of the outlet malls between this small town by the bay and nearby Rehobeth Beach, a salesperson laments the decline in customers this summer. Gas prices and a tough economy are to blame, she said.

"You can't keep pushing this stuff on people," she added. "They have to conserve their money."

This is one small parable in how inflation can cause recession, but it is a rather widespread view across the country. On a drive to Kentucky from Washington, D.C. and back to the beach, traffic seemed a tad lighter, and so was the line at the popular ice cream store in downtown Lewes.

Yes, it feels like a downturn, but commerce is not dead, an important thing to remember. People are still driving their SUVs to the beach, and frequenting the restaurants and bars. But there is a noticeable scaling back, especially when a fill-up the gas station can easily hit $65 or more.

One cannot get one's arms around how much of a storm is coming, and just how deep any downturn might be. The huge decline in the stock market on Thursday represented another crack in confidence and proved chastening to market experts who had represented this as a "buying opportunity" only a few weeks ago.

by Katie Fretland

The public's confidence in the economy has reached its lowest level since 1992, and the percentage of people reporting it is getting worse is at a record high, Gallup reports in its tracking of consumer confidence.

However, two groups that are likely to be less pessimistic about the current economic conditions are college graduates and Republicans, Gallup chief economist Dennis Jacobe reports.

In mid-June, 47 percent of Americans reported that the economy is "poor," up 4 percent from April and May.

The percentage of college graduates rating the economy as "poor" increased 16 percent since January, compared to 21 percent for people who did not earn a college degree.

"College graduates tend to have higher incomes than other Americans, so it is not surprising that upper-income Americans are also generally less likely to rate the economy as 'poor,'" Jacobe says.

Republicans tend to report more positive opinions about the economy, with 29 percent rating economic conditions as "poor," compared with 48 percent of Independents and 58 percent of Democrats.

This optimism reflects higher average incomes and possibly political loyalty to the GOP, Jacobe says, however the number of Republicans rating the economy as "poor" has more than doubled since January.

Jacobe offers this commentary on the report:

Ralph Cioffi, left, and Matthew Tannin are escorted to federal court in the Brooklyn borough of New York, U.S., on Thursday, June 19, 2008. Photographer: Daniel Acker/Bloomberg News.

by Frank James

The federal government's regulators may not have done as much as they could have to stop the mortgage crisis from happening in the first place but federal cops are evidently doing what they can to clean up the mess that's left, at least the part of it that has to do with alleged illegality.

In New York, federal prosecutors announced the arrests and indictment of two former Bear Stearns hedge-fund managers, Ralph Cioffi and Matthew Tannin, who were charged with securities fraud for allegedly hiding their concerns about their fund's investments in subprime mortgage from investors.

Meanwhile, in Washington, the Justice Department and Federal Bureau of Investigation announced the arrests of more than 400 people since March suspected of mortgage fraud.

Justice officials acknowledged they had packaged a lot of on-going cases to make a bigger splash, to add to the "deterrent factor."

Here's a snippet of what FBI Director Robert Mueller said:

And part of the reason they're bringing it together is the deterrent factor, to make persons understand, wherever they are around the country, whichever of these schemes that they become participants in, that we will get reports, generally through suspicious activity reports; we will follow up; we will investigate; and we will prosecute; and justice will be done.

by Frank James

It's probably safe to assume that Rep. Jeb Hensarling, a Texas Republican, knows he wasn't one of the "Friends of Angelo," as in Mozilo, the former chief executive officer of Countrywide Financial.

That's because Hensarling is calling for a congressional investigation into members of Congress who might have received preferential treatment on mortgages from Countrywide.

As Portfolio magazine first reported, Democratic Sens. Chris Dodd and Kent Conrad were among the FOAs who apparently got discounts on VIP loans from Countrywide.

Both senators have said they were unaware that they were being favored with preferential treatment, with Conrad, according to NPR, going so far as giving $10,000 to Habitat for Humanity, the amount he calculates he unknowingly saved when Mozilo waived closing points on his loan.

Hensarling and Washington watchdogs are calling for a congressional probe in order to examine just how widespread the practice was, just how many lawmakers were FOAs.

But the odds of such a probe are long. It may not just be Democrats that get embarrassed (only Democrats who've been involved so far, including James Johnson who recently left Sen. Barack Obama's campaign) but Republicans too.

Here's a snippet to that effect from Politico.com:

by Frank James

Speaking in Boston last night, Federal Reserve Chairman Ben Bernanke said some things that can be interpreted as a signal that the recent bad jobs report won't cause the central bank to lower interest rates again and, indeed, might raise rates.

Bernanke noted the large rise in the May unemployment rate to 5.5 percent from five percent but said that particular bit of bad news didn't mean the wheels were coming off the economy. Anything but, in fact.

Despite the unwelcome rise in the unemployment rate that was reported last week, the recent incoming data, taken as a whole, have affected the outlook for economic activity and employment only modestly. Indeed, although activity during the current quarter is likely to be weak, the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so. Over the remainder of 2008, the effects of monetary and fiscal stimulus, a gradual ebbing of the drag from residential construction, further progress in the repair of financial and credit markets, and still-solid demand from abroad should provide some offset to the headwinds that still face the economy. However, the ongoing contraction in the housing market and continuing increases in energy prices suggest that growth risks remain to the downside.

So the patient appears to be on the mend though there could be a reversal, said Dr. Bernanke.

But in what looked like he could be signaling future rate hikes, Bernanke pointed to increased pressures from higher prices and sounded some fairly hawkish notes.

Inflation has remained high, largely reflecting sharp increases in the prices of globally traded commodities. Thus far, the pass-through of high raw materials costs to the prices of most other products and to domestic labor costs has been limited, in part because of softening domestic demand. However, the continuation of this pattern is not guaranteed and future developments in this regard will bear close attention. Moreover, the latest round of increases in energy prices has added to the upside risks to inflation and inflation expectations. The Federal Open Market Committee will strongly resist an erosion of longer-term inflation expectations, as an unanchoring of those expectations would be destabilizing for growth as well as for inflation. (Underlining added.)

by Mark Silva

At the start of the general election campaign, the voters in the state that became the central battleground of the last presidential election campaign are restless.

In Ohio, they like their governor, Democrat Ted Strickland, but they don't like the way things are going in the nation, and they are unhappy with the administration of Republican George W. Bush.

This could elevate the profile of Strickland, who campaigned for Sen. Hillary Clinton in the Democratic primaries. There's a running mate list out there somewhere.

"The economy weighs heavily on the minds of Ohioans,'' the folks at the Ohio Poll report today.

The survey by the University of Cincinnati's Institute for Policy Research, conducted between May 16 and June 4, provides no gauge of the contest between Barack Obama and John McCain in Ohio, but it does say a lot about what Ohioans are thinking.

President Bush's approval rating sits at 29 percent. An additional 68 percent disapprove of Bush's performance as president and three percent neither approve nor disapprove. President Bush's approval ratings in specific areas are also low:

-- 28 percent of Ohio adults approve of Bush's handling of foreign affairs.

-- 28 eight percent approve of Bush's handling of the situation with Iraq.

-- 26 percent approve of Bush's handling of the economy.

Strickland's approval rating stands at 61 percent, with just 25 percent disapproving of his performance as governor and 14 percent neither approving nor disapproving.

However, the governor draws a lower rating on his handling of Ohio's economy, with 51 percent voicing approval, 38 percent disapprove and 11 percent neither approval nor disapproval. Again: An expression of discontent with the economy itself.

The folks at Cleveland.com also have noticed a parallel in the "divergent demographics" of Clinton's and Obama's supporters: "For instance, only 49 percent of young voters approve of the overall job Strickland is doing, compared with more than 60 percent in other age categories. And only 47 percent of African-Americans approve of Strickland's performance, compared with 63 percent of whites.

"Are we reading too much into this?'' they ask. "We checked with the poll's director, Eric Rademacher. He said that he noticed the parallels, too, and they give rise to two questions: Is it because of Ohio's economy, or is it because of the Obama-Clinton race and Strickland's role in helping Clinton win Ohio's primary vote?''

See the full results of the Ohio Poll here.

by Frank James

With gas prices reaching a national average of $4-a-gallon over the weekend, the sense of national crisis is surging along with the cost of filling up.

The New York Times focuses attention on those consumers who are akin to canaries in the coal mine, low-income rural residents who must drive long distances to jobs. They are suffering the effects earliest and worst.

Here in the Mississippi Delta, some farm workers are borrowing money from their bosses so they can fill their tanks and get to work. Some are switching jobs for shorter commutes.

People are giving up meat so they can buy fuel. Gasoline theft is rising. And drivers are running out of gas more often, leaving their cars by the side of the road until they can scrape together gas money.

The economic ramifications of the eye-popping gas prices, the result of sky-rocketing oil prices, are fairly self-evident. A weak economy is being further hamstrung by soaring energy costs. Efforts by Congress, the White House and the Federal Reserve Board to stave off recession are no doubt being undermined by the higher prices.

by Mark Silva and updated at 10:15 a.m.

At the gate of the general election campaign of 2008, unemployment is up.

The rate of joblessness made a 10-percent jump in May - rising from 5 percent unemployment to 5.5 percent unemployment. The half-point increase puts unemployment at one full point higher than it was a year ago.

Another 49,000 jobs were lost - raising the number of jobs lost so far in 2008 to 324,000, according to the Bureau of Labor Statistics report this morning.

This should help intensify the debate about the economy - with most Americans voicing discontent about the state of the economy and worry about the direction it is taking - as a five-month campaign for the White House gets underway. Sen. John McCain, the Republican Party's candidate, and Sen. Barack Obama, the Democrats', will be pressed to explain what they have in store for the American worker in 2009.

Here are their responses today:

"Today's jobs report is deeply troubling, Obama said in a statement issued this morning. "Last month, our economy lost 49,000 jobs and the unemployment rate saw the greatest rise in more than twenty years.

"This is a reminder that working families continue to bear the brunt of the failed Bush economic policies that John McCain wants to continue for another four years.... We can't afford John McCain's plan to spend billions of dollars on tax breaks for big corporations and wealthy CEOs, and that's why I'm offering change that will provide working families with a middle-class tax cut, affordable health care and college, and an energy plan that will create up to five million good-paying jobs that can't be outsourced.

"That's the change the American people are looking for, and that's how we'll build an economy of shared prosperity once more,'' Obama said.

McCain, in his statement, said: "Today's news about unemployment is a stark reminder of the economic challenges facing American families. As the worst single monthly increase in the unemployment rate in two decades clearly shows, Americans across this country are hurting, and we must act now to support workers, families and employers alike.

"This means getting our economy back on track by providing immediate tax relief, enacting a HOME plan to help those facing foreclosure, lowering health care costs, investing in innovation, moving toward energy independence and opening foreign markets to our goods. These policies will help small businesses create the jobs that families need today. The American people cannot afford more inaction from Washington.

"The wrong change for our country would be an economic agenda based upon the policies of the past that advocate higher taxes, bigger government, government-run health care and greater isolationism.,'' McCain said. "To help families at this critical time, we cannot afford to go backward as Senator Obama advocates."

There were 8.5 million people counted as unemployed in May, an increase of 861,000.

That is up from 6.9 million unemployed in May of 2007, when the unemployment rate stood at 4.5 percent.

The unemployment rate for black Americans is higher: 9.7 percent, and also rose in May. For Hispanic Americans: 6.9 percent, same as last year. For white workers: 4.9 percent.

Motorists on beltway outside Washington, D.C., May 23, 2008 (Photo by Brendan Smialowski/Getty Images

by Frank James

I've seen the future and it's in Connecticut, at least when it comes to gas prices approaching $5 a gallon.

The family left the DC area and traveled to to the Nutmeg State over the holiday weekend. The higher gas prices certainly appeared to us to have had a depressing effect on traffic on one of the busiest routers along the eastern seaboard, I-95.

During some holiday weekends, because of traffic volume, it's taken us eight hours or more to make the 250 mile or so trip from the DC suburbs to New York City.

But the lighter than normal traffic allowed us to make the journey to and from the metropolitan New York City area in little more than five hours.

That was the upside of raging energy prices; many people apparently decided to stay closer to home for the Memorial Day weekend.

by Frank James

The disagreement between the Bush Administration and congressional Democrats over the Colombia free trade agreement (the administration is for, many Democrats in Congress are against) has reached the he-started-it-first stage.

This morning, Sean Spicer, a White House aide, sent a blast e-mail to congressional staffers on Capitol Hill, pointing their attention to a newspaper insert for children that ran in many newspapers this weekend that explained the importance of the trade agreement "at a children's (sic) level" according to Spicer's e-mail.

Here's Spicer's message:

This past Sunday, in the comics section of papers nationwide (including the Post), was an insert called the Mini Page that explained trade at a children's level.

If you missed it, it is attached in PDF... mini page On page 4 there is an explanation of why the Colombia trade agreement is in the best interest of American workers.

Not to be outdone, this was the response of Joe Shoemaker, press secretary to Sen. Dick Durbin, the Senate's second-in command:

Thank you for your helpful (if somewhat condescending) explanation of trade "at a children's level."

P.S. If you find "I'm Just a Bill" helpful, you may also want to check out "Three Ring Government" which explains the three co-equal branches of the federal government and discusses the concept of separation of powers.

Maybe we can just schedule a fight after school and settle this matter once and for all.

by Jim Tankersley

JUNCTION CITY, Ore. - Hillary Clinton dropped into a half-finished subdivision in this small town two hours south of Portland on Friday. She came to chat on camera with a few locals and to spotlight the housing crisis undercutting America's economy.

The cameras and the locals showed up exactly as planned, unlike the housing crisis, which has spared Oregon the full destruction it has brought to bear on states across the Sun Belt and Midwest in the form of free-falling home values.

While home prices fell by about 20 percent in those regions over the last year, values in the Portland metro area dipped slightly. Only Charlotte fared better among major cities. A builder at the Junction City event told Clinton he knew of no Oregon projects that were halted by market woes, though construction has slowed appreciably statewide.

Economists and real estate experts say Clinton and other politicians focused on housing could learn from Oregon, where they credit land-use restrictions and a late-blooming economy with keeping housing prices afloat. While other cities confront half-built or half-empty housing developments, Portland's longtime fight against sprawl ensured that the supply never got too far ahead of demand.

"Unlike other places where there was a lot of overbuilding during the boom years, what we don't have is this huge overhang of subdivisions," said Gerard Mildner, who directs the Center for Real Estate at Portland State University's School of Urban Studies and Planning.

Read the full report in today's Chicago Tribune.

by Frank James

The big sigh of relief that could be heard emanating from the far end of Constitution Ave. nearest the Potomac River in Washington, D.C. was the sound of Federal Reserve Chairman Ben Bernanke exhaling.

That's because today's consumer price index report for April showed that so-called core inflation, that is, subtracting food and energy costs from the mox, was just .1 percent, which was half the rate of March.

Coming after a series of rate cuts by the central bank meant to revive the flagging economy, the April CPI seemed to be telling Bernanke and the rest of us that those rate decreases haven't begun to fan the fires of inflation, at least not yet.

Of course, in the real world of actual consumers, food and energy costs can't just be ignored. Inflation, including those important consumables, was up .2 percent for April if you count the rising costs of those two categories.