The Washington Postleads with a look at how the job market in the United States appears to be steadily deteriorating as employers rush to cut costs to deal with what many predict will be a long recession. Mass layoffs and new claims for unemployment benefits have been reaching levels not seen since 2001, and there are strong hints that things will get worse as more companies cut jobs and impose hiring freezes. This, in turn, is emerging as a key reason why investors are fearful that a deep recession is almost inevitable. The Wall Street Journal banners these fears, which, once again, decreased the value of stocks and currencies around the world yesterday as the dollar continued to gain ground.
USA Todayanalyzed government data and reveals that the same mistake that likely led to the plane crash in Madrid last summer has been committed by pilots in the United States 55 times since 2000. It is widely believed that the pilots' failure to properly set the wings for takeoff was the reason behind the Spanair crash that killed 154 people. In the United States, a warning system saved the day in most cases, but several times the mistakes were "nearly catastrophic," says USAT. The Los Angeles Timesleads with a new poll that says a majority of California voters oppose a measure to ban marriage for same-sex couples. The New York Timesleads with a comparison of how each of the presidential candidates would use American power abroad if elected. A close look at their proposals often finds contradictions "that do not fit the neat hawk-and-dove images promoted by each campaign." For example, Barack Obama has expressed much more willingness to threaten the use of U.S. ground troops in Pakistan than John McCain. Still, it's important to remember that campaigns "are usually terrible predictors of presidential decision-making."
Many say the overall decline in hiring isn't necessarily due to the credit crunch, but rather as a result of a cautionary approach by executives who don't know how the financial crisis will affect their customers, so they're trying to play it safe. While the official unemployment rate of 6.1 percent is "not astronomical by historical standards," it is accelerating. Slate's Daniel Gross looked at a variety of indicators that suggest "the job situation is worse than it has been at any time since 1994."
Fear is still the name of the game, and it was on full display on Wall Street yesterday as the Dow Jones industrial average plunged 5.7 percent and suffered the seventh-biggest point drop in history. The Dow has dropped 746 points in the past two days, "reversing a burst of optimism early in the week tied to a modest loosening in the credit markets," notes the WSJ. For its part, the broad Standard & Poor's 500-stock index plunged 6.1 percent, "a decline that in any other financial environment would be considered extraordinary," notes the NYT. Indeed, as a measure of how recent turmoil has upped the ante in what is considered big news, the WSJ is alone in devoting a stand-alone front-page story to yesterday's stock-market plunge, though USAT does have an above-the-fold graphic that pretty much says everything you need to know: "Stocks plummet on profit worries."
"The market continues to ignore anything that even looks like good news," a floor trader said. "It's basically 1973 or 1974 all over again." Stocks in emerging markets were particularly hard-hit yesterday and the WSJ points out that they've now "lost more than half their value in dollar terms since they peaked in May." Oil continued plunging yesterday and closed at $66.75, which marks a 54 percent drop since July.
Asian stocks fell today, with South Korea's market plunging more than 7 percent. European stocks were also on a downward trend this morning, but the outlook for U.S. markets doesn't look as grim, largely due to a scoop reported on Page One of the WSJ.
The WSJ gets word that the Bush administration is considering "a roughly $40 billion proposal" to aid homeowners at risk of foreclosure. The chairwoman of the Federal Deposit Insurance Corp., Sheila Bair, is expected to present an idea to lawmakers today that would give banks a financial incentive to make some mortgages more affordable by having the government share in any future losses on the new loans. The Treasury Department is considering this plan but also discussing how to use part of the $700 billion bailout package "to directly buy and renegotiate mortgages."
Treasury officials are also scheduled to brief lawmakers behind closed doors today to discuss a variety of options and "it's not yet clear which will prevail," declares the WSJ. The moves come amid growing pressure to help troubled homeowners, but any plan to directly deal with mortgages is bound to be filled with complications and could be controversial if the government is seen as helping lenders and borrowers who made bad decisions. Early morning wire reports reveal that the number of homeowners who received at least one foreclosure-related notice grew by more than 70 percent in the third quarter of this year compared with the same period in 2007.
The new poll highlighted by the LAT found that 52 percent oppose the measure to ban marriage for same-sex couples while 44 percent are in favor. This is a marked difference from other recent polls that have predicted the measure will pass. Regardless, it's clear that Californians are divided on the issue, and it's difficult to predict how the expected surge of new voters will affect the outcome. The debate over the measure, known as Proposition 8, has turned into an expensive campaign as those who favor the ban have raised $26.7 million, while those opposed have brought in $26.1 million.
The WP fronts news that the Pakistani government is taking a page out of the Iraq conflict and has decided to arm tens of thousands of militias in its western tribal regions to fight against the Taliban. The government will give the militias, called lashkars, Chinese assault rifles and other small arms in what Bush administration officials see as yet another encouraging sign that the Pakistani government is willing to fight more aggressively against extremist groups along the Afghan border. Still, U.S. officials warn that the Pakistani government is still not doing enough to win the hearts and minds of the tribes in the troubled regions. "The secret to success in this kind of operation is tea," one official said.
The NYT fronts, and everyone mentions, the latest kerfuffle from the campaign trail that had to do with the revelation that the Republican National Committee spent around $150,000 on clothing for Sarah Palin and her family since September. Campaign operatives tried to minimize the commotion and said the clothes from such high-end retailers as Neiman Marcus and Saks Fifth Avenue would be donated in November. But even some Republicans spoke up and expressed shock that aides would be so careless as to not think through how this would look to voters living through an economic downturn, particularly when the campaign has worked so hard to portray Palin as a working mom who understands the problems of middle-class Americans. Some think this could go a long way toward destroying Palin's carefully constructed image, much like John Edwards suffered after the whole mini controversy regarding his $400 haircuts.
As much of an easy and fun story as it is to cover, what's $150,000 anyway? Yes, as the LAT points out, it's about 75 times more than what the average American spends on clothing a year. But, it's clearly loose change when you consider how much is being spent on political campaigns this year. USAT fronts a new report that reveals the total cost of campaigns to send newly elected politicians to Washington is on track to reach $5.3 billion. That figure, which includes expenditures by the candidates, parties, and outside groups, would represent a $1 billion increase from 2004. And if that's an eye-popping figure, consider that it's still less than the estimate of how much Americans will spend on Halloween this year, a whopping $6 billion.
Clearly, it's not just about the money, but about what the clothes represent. The WP's resident fashion expert Robin Givhan, who calls the expenditures "some seriously bad judgment," says that the wardrobe choices made for Palin are "evidence of a tin ear for the symbolism of popular culture." People define themselves through their fashion choices, which is why a "smart retailer stands for something," writes Givhan. "And in our culture Neiman Marcus stands for 'elite,' not for 'Everyman.' "