1. Whither the Middle Class? Jared Bernstein Economic Policy Institute jbernstein@epi.org

2. Real Economy It’s official—recession, that is. Consumer: retrenching, big time. Investment: squeezed on credit and profit sides Exports/Imports: Maybe, maybe not… Government: most reliable source of short term growth?

3. Source: Bureau of Labor Statistics, EPI Employment Projections

4. Employment Declines Across Sectors Source: Bureau of Labor Statistics

10. Source: EPI analysis of Census Bureau data

12. Source: EPI Analysis of BLS data and Goldman-Sachs unemployment rate forecasts

13. Real GDP and Unemployment: 2008q1-2009q4 Source: Goldman Sachs Forecasts

14. Source: Mark Zandi, Moody’s economy.com

16. Un-Real Economy Financial Markets: Dow, Nasdaq, S&P 500, Russell 2000…all down about 40% ytd. But: good news…Ted Spread responding (4.6 10/10; 2 11/7)? Housing: some signs bottom in sight, but no signs re uptick…prices still falling…inventory overhang; TARP: Certainly not a confidence builder yet. Fed: pushing on string but not giving up.

17. Pres/VP Elect Fiscal constraints? Deficit could go as high as 6% of GDP, but debt around 40% (avg 46% in 1990s). Must he alter his long-term plans--hth care/energy? There is a time for budget austerity; this ain’t it. Middle-class, poor, labor agenda (EFCA, min wg, UI reform, OSHA, etc…)

18. Their Agenda Morph his recovery package with House D’s (Making Work Pay tax cuts; new jobs tax credit; mortgage relief; small biz, UI) Manage TARP Tax agenda Energy/Health Care Infrastructure (who gets the jobs?) Regulation (Cooper Union speech)