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article imageGeithner says U.S. employers too cautious to help economy

By Joan Firstenberg     Jul 25, 2010 in Business
Washington - Timothy F. Geithner, U.S. Treasury Secretary made the Sunday TV talk-show circuit today, speaking of jobs, home ownership and tax cuts for the wealthy.
U.S. Treasury Secretary Timothy F. Geithner said American companies who feel scarred by the financial crisis continue to be “very cautious”. Bloomberg News reports that instead of hiring new workers, employers are intent on squeezing more productivity out of the employees they already have.
In an interview broadcast today on NBC's Meet the Press" Geithner said,
"Job growth is not as fast as we need. Employers are still cautious, still very cautious."
He also was reassuring about the economy, saying he doesn't think the U.S. will experience what some call a double-dip recession.
“The most likely thing is you see an economy that gradually strengthens over the next year or two."
In another interview on ABC’s “This Week” program, Geithner said that allowing tax cuts for the wealthiest Americans to lapse at the end of this year would not hurt economic growth.
Just in June, the U.S. economy lost 125,000 jobs while adding only 83,000 private-company positions, which is fewer than was was forecast. While it is true that the unemployment rate fell to 9.5 percent from 9.7 percent, it has rested above 9 percent since May of 2009.
One key company that announced it was reducing jobs in July was New Jersey-based Johnson & Johnson. The company, which manufacturers dozens of over the counter health products is currently under under U.S. congressional investigation for a recall of possibly tainted children’s medicines. It has said publicly that it will be reorganizing its plant where these drugs were made, and in the process have to cut 300 jobs.
On another subject, Geithner said he would like to see the government maintaining a role in the housing finance companies Fannie Mae and Freddie Mac.
“We’re not going to preserve Fannie and Freddie in anything like the current form.” But I think there’s going to be a good case for taking a look at preserving or putting in place a carefully designed guarantee, so again, homeowners have the ability to borrow, to finance a home, even in a very difficult recession. We're going to take a look at the broad set of policies the U.S. government has in place to help encourage home ownership and particularly help low-income Americans get access to affordable housing.”
Fannie and Freddie were pushed to the brink of failure in 2008, spurred on by falling home prices and the easy availability of credit and government policies promoting home ownership.
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