WASHINGTON (Reuters) –
President Barack Obama said on Saturday this week's positive job and economic growth figures proved that his big spending efforts to stimulate the economy were working.
But he cautioned in his weekly radio address to Americans that "we have a long way to go before we return to prosperity" and more job losses were likely in coming days.
Democrats and Republicans agree the economy will be the top issue for the 2010 congressional elections, although the White House has disputed suggestions that they will be a judgment on Obama and his policies.
Voting in next week's Virginia and New Jersey governors' races will render a first judgment on Obama, who was sworn into office just over nine months ago in the midst of the worst recession since World War Two.
The U.S. unemployment rate remains stubbornly high at 9.8 percent, despite a $787 billion economic stimulus that Obama and his fellow Democrats, who control Congress, pushed through in February.
New unemployment numbers due out next Friday are expected to show U.S. employers cut 175,000 jobs in October, according to economists polled by Reuters. The unemployment rate is forecast to rise to 9.9 percent for October.
But new data this week showing the U.S. economy growing in the third quarter for the first time in more than a year, signaling the end of the worst recession in 70 years, was good news for the Obama administration.
"Now, economic growth is no substitute for job growth," Obama stressed in his radio address. "But we will not create the jobs we need unless the economy is growing."
REPUBLICANS QUESTION FIGURES
Obama said steps taken by his administration to jump-start the economy, including the stimulus package of spending and tax cuts, had helped "blunt the worst of this recession."
The White House said on Friday the stimulus had directly saved or created more than 640,000 jobs so far, based on data about who had received loans or grants through the American Recovery and Reinvestment Act.
Obama said overall the stimulus had created or saved more than one million jobs.
"It took years to dig our way into the crisis we've faced. It will take more than a few months to dig our way out," said Obama, who blames Republicans for the economic crisis he inherited.
Republicans, who favor tax cuts, say the stimulus has failed to halt rising joblessness and they also questioned the White House's figures on jobs saved or created.
"It's bewildering to see the same administration that sold its trillion-dollar spending plan this spring as a guarantee against 8 percent unemployment -- today it's nearly 10 percent
-- claiming it created 1 million jobs, especially since it is a sad fact 3 million jobs have been lost since the stimulus was signed into law," Senate Republican leader Mitch McConnell said in a statement.
(Reporting by Ross Colvin, editing by Alan Elsner)
WASHINGTON – As Bernard Madoff sat in jail a few months after pleading guilty to fraud, he sounded faintly boastful.
The only problem with officials at the Securities and Exchange Commission's Washington headquarters, he said, is that he had "too much credibility with them and they dismissed" the idea that he was scheming people out of billions of dollars.
A document released Friday details a prison interview conducted June 17 by the SEC inspector general in which Madoff says he had the impression that "it never entered the SEC's mind that it was a Ponzi scheme."
Madoff seemed convinced SEC staff did not suspect him, despite the agency's numerous probes of his business. He said in the interview that the SEC examiners "never asked" for basic records to corroborate his operations.
The disgraced financier also confided that he didn't bring an attorney with him when he testified in an inquiry by the SEC's enforcement division because he believed he didn't need one — and he was trying to fool the government investigators into thinking he had nothing to hide.
The details emerged in a summary of Inspector General David Kotz's interview with Madoff at the Metropolitan Correctional Center in New York, released along with hundreds of other documents related to Kotz's extensive investigation of the SEC's stunning failure to detect Madoff's fraudulent scheme for 16 years.
Kotz also issued a statement Friday saying his probe found no evidence to support Madoff's claim of having a "close relationship" with SEC Chairman Mary Schapiro, who previously headed the Financial Industry Regulatory Authority, the brokerage industry's self-policing organization. In the interview, Madoff called Schapiro a "dear friend," saying she "probably thinks, I wish I never knew this guy."
Like the SEC, FINRA made periodic exams of Madoff's brokerage operation, which functioned separately from his investment business hidden from regulators' view. An internal review by FINRA found a regulatory breakdown on the part of the organization in the Madoff case.
As the SEC inspectors carried out probe after probe of his business, Madoff said in the interview he was "worried every time" that he'd be caught. "It was a nightmare for me," he said. "I wish they caught me six years ago, eight years ago."
Madoff, 71, a former Nasdaq stock market chairman, pleaded guilty in March to charges that his secretive investment-adviser operation was a multibillion-dollar Ponzi scheme that destroyed thousands of people's life savings and wrecked charities. It was possibly the largest-ever Ponzi: the classic scheme in which investors are paid with other investors' money rather than actual profits on their investment.
He is serving a 150-year sentence in federal prison in North Carolina.
The new details from Kotz's inquiry came the same day as word that Madoff's longtime auditor is expected to plead guilty next week in a cooperation deal. Prosecutors told a federal judge in New York that accountant David Friehling was expected to offer a guilty plea at a conference Tuesday to revised charges that accuse him of securities fraud, investment adviser fraud, making false filings to the SEC, and obstructing or impeding administration of the Internal Revenue laws.
The charges carry a prison term of up to 108 years, though significant cooperation with prosecutors can bring leniency.
In his interview with Kotz, Madoff said the SEC never asked him about his tiny accounting firm. It seemed incongruous that, with more than $65 billion in private investments he claimed he oversaw for thousands of people, Madoff used what seemed to be a small-time auditor with a minuscule office in suburban New City, N.Y. Authorities say that Friehling appeared to have rubber-stamped Madoff's records.
Kotz's report of his investigation, made public in early September, painstakingly detailed how the agency's investigations of Madoff were bungled, with disputes among inspection staffers over the findings, lack of communication among SEC offices in various cities and repeated failures to act on credible complaints from outsiders forming a sea of red flags.
An inspection of Madoff's operation in 2003-04, for example, "was put on the back burner" even though the exam team still had unresolved questions, Kotz found.
Madoff's former finance chief, Frank DiPascali, is cooperating with prosecutors after pleading guilty in August to helping Madoff carry out his fraud. Madoff was asked in the interview whether he was concerned about DiPascali's testimony. His answer: "No, he didn't know anything was wrong, either."
BEIJING/SHANGHAI (Reuters) –
China's exports face a "hard and tortuous" path to recovery as uncertainties dog the global economy's gradual return to health, with this year's trade surplus set to shrink from last year's record, the Commerce Ministry said.
Commerce Minister Chen Deming told a conference on Saturday that China's trade surplus was expected to fall to $180 billion to $190 billion this year from last year's record $295.5 billion.
The surplus was $136.4 billion in the first nine months of the year.
With China's economic recovery relying heavily on government spending to boost domestic demand, imports have seen greater improvement than exports in recent months.
Exports in September were 15.2 percent below their level a year earlier, beating forecasts of a 21 percent fall, although the government expects a double-digit fall for all of 2009.
In a statement released late on Friday on the ministry's website (
"In 2010, the world economy will hopefully see a gradual recovery, and the environment for Chinese trade will gradually improve," it said.
"But as there is not yet sufficient strength in the global economic recovery, many problems and contradictions have yet to be basically resolved. The recovery will be hard and tortuous, and it will be hard to see an obvious recovery in international demand in the short term."
Net exports shaved 3.6 percentage points off headline GDP growth of 8.9 percent in the third quarter as Chinese manufacturers continued to reel from a slump in global trade.
Protectionism in these straightened times was a particular worry, as was increasing competition, the ministry said.
"At present some nations are conducting probes into Chinese goods, which is causing yet further obstruction for a recovery in Chinese exports," it said.
A U.S. trade panel on Friday approved the eighth government investigation this year into charges of unfair Chinese pricing practices in a case in which U.S. companies want a nearly 100 percent duty or more on $382 million of imported steel pipes.
Still, there were signs for optimism, the ministry added.
The government was continuing to provide help to exporters in the form of export tax rebates, and numerous new markets awaited Chinese firms.
"There is a bright future for developing trade with newly emerging markets," it said.
(Reporting by Ben Blanchard in Beijing and Fang Yan in Shanghai; Editing by Nick Macfie)