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An eye opening video by our own politicians.  See what is really going on within the Federal Reserve.

Michigan Jobless Rate Leaps to 14.1%

Michigan’s jobless rate hit 14.1 percent in May, a near-26 year high, according to data released today by the Michigan Department of Energy, Labor & Economic Growth .

The U.S. unemployment rate rose by half a percentage point in May, to 9.4 percent.

“Major events continued to unfold in Michigan’s auto industry in May, which had a considerable impact on the state’s unemployment rate,” said Rick Waclawek, director of the state’s Bureau of Labor Market Information and Strategic Initiatives. “Curtailed production negatively influenced suppliers and other related sectors, resulting in further weakening in the labor market.”

It’s the highest monthly rate recorded in the state since July 1983. Since May 2008, unemployment has jumped by 274,000 people, or 67.2 percent. Unemployment nationally rose by a slightly larger 70.0 percent in the same period.

“It’s not good,” said Gov. Jennifer Granholm, at a Lansing press conference Wednesday

Unemployment Rising and Economy Still in Decline

For much of last week, it was possible to think that the economy was looking up. Various indicators, though weak, were not as bad as expected.

On Friday, reality bit back with the news that the unemployment rate spiked in March, to 8.5 percent, a 25-year high. The government’s report also showed that employers had shed 663,000 more jobs in March. Nearly two million jobs have vanished this year — 5.1 million since the recession began in December 2007. The ranks of the unemployed now stand at 13.2 million.

There is no longer any doubt that the current recession will be the longest yet in America since World War II. The previous record-holders — the contractions of the early 1970s and the early 1980s — each lasted for 16 months. As of now, the economy already has been in decline for 16 straight months.

The questions now are how much longer the recession will be and how much worse it will get. Measured by the labor market, the answer to both questions is “a lot.” That is because employers will continue to cut jobs as long as the economy is weakening and will resume hiring only once they are sure a recovery is under way.

In this recession, the traditional paths to recovery are especially blocked. Economic rebounds — especially from steep declines — are generally led by recovery in the housing market. This time, housing is unlikely to provide the spark. By prudent estimates, housing sales and prices will not begin to turn up appreciably until 2010 at the earliest.

People are Leaving Michigan at an Alarming Rate

Joe LaCross drives American cars. Always has. Born and raised in the blue-collar suburbs of Detroit, this son of a welder wouldn’t dream of rolling past his autoworker neighbors in a Toyota. But not long ago the 38-year-old pulled into the driveway of his Sterling Heights home in a vehicle wreaking even more havoc in his home state.

A moving van.

“I grew up here,” said LaCross, as he packed to move to Florida in search of a job. “My family is here. My wife’s family is here. I love everything about Michigan.

“Everything,” he said, picking up a plastic storage tub, “except the economy.”

People are leaving Michigan at a staggering rate. About 109,000 more people left Michigan last year than moved in. It is one of the worst rates in the nation, quadruple the loss of just eight years ago. The state loses a family every 12 minutes, and the families who are leaving — young, well-educated high-income earners — are the people the state desperately needs to rebuild.

“I never thought I’d leave,” said LaCross, looking around his empty Michigan home. “What happens now?”

Why Not Just Let AIG Go Under?

Last week’s outrage over big bonuses paid to executives at AIG has more than a few readers wondering: Why can’t we just let these big companies go out of business?

Roughly half of the $180 billion the government has given AIG has already flowed, indirectly, to the “counterparties” that bought what amounts to financial insurance policies. The list includes big banks, other financial institutions and governments.

The state of California, for example, collected $1 billion it invested in what’s called a Guaranteed Investment Agreement. That’s a kind of interest-bearing savings account where states and cities stash money they’ve raised from a bond offering until they need the money. More than $12 billion in federal bailout funds paid to AIG went to more than 20 states that invested money with the company.

Some $80 billion in AIG bailout money also went straight to banks and investment firms around the world that did business with AIG. It’s possible some of those banks might be able to absorb those losses. But given the current fragile state of the global banking system, it’s entirely possible that AIG’s failure could bring down one or more big banks.

Why not let those banks fail, too? The problem is that the world’s banks are interconnected in a kind of global river of money that we all rely on to keep the economy moving. If too many banks fail, that river starts to dry up. With the economy in a steep decline, we need money flowing through the system faster — not slower.

AIG’s Financial Products division wasn’t regulated. After Congress passed a law in 2000 deregulating the kind of paper bets AIG was making, the company was free to write as much of this “insurance” as it wanted without demonstrating it could cover any and all bets that went bad. By some estimates, the company made about $500 billion in paper bets with little or nothing to back them up.

Taking back bonuses paid to the people who made the mess does little to fix the underlying problem. Some of the members of Congress now expressing the loudest outrage were among those who approved the rules that let AIG get into the casino business in the first place.

Then again, maybe the failure of Congress to act sooner isn’t all that surprising. AIG was one of the biggest contributors to key members of Congress in charge of making the rules. The company, like the rest of the financial services industry, got some of the best laws money can buy.

Bankruptcy and Bad Credit Losing its Shame

Many People are Walking Away From Their Homes

Declaring personal bankruptcy may not carry the same stigma it once did.

As unemployment rates skyrocket and home values plummet, new attitudes toward debt may explain why more people are letting their homes and other assets go rather than working out a debt repayment plan in the nation’s bankruptcy courts.

“It’s not being looked at as a personal failure but a product of the times,” said credit counselor Rachel Hood.

“More people are throwing in the keys and saying, ‘OK, take my house,’ in a way I’ve never seen in the past. No matter how much they fight, at the end of the day, they’re still $50,000 underwater.

In the past, the home was a homeowner’s most important asset, but with tumbling property values, many find themselves owing far more than their home would sell for. For some, it often makes more sense to liquidate and start anew despite the hit on their credit.

Obama Says Present Financial Crisis is Great Opportunity

WASHINGTON (AP) — President Barack Obama on Saturday challenged his country to see its hard times as a chance to “discover great opportunity in the midst of great crisis.”

“That is what we can do and must do today. And I am absolutely confident that is what we will do,” Obama said in his weekly radio and video address, taped a day earlier at the White House.

As the White House takes on so many huge issues at once, Obama is encouraging people to take a longer view, and not get caught up in the fits and starts. The president said in his address that the nation will continue to face difficult days in the months ahead. Still, he ended with hope.

“Yes, this is a moment of challenge for our country,” Obama said. “But we’ve experienced great trials before. And with every test, each generation has found the capacity to not only endure, but to prosper — to discover great opportunity in the midst of great crisis.”