Obama’s Jobs Bill Provides no Relief to the Housing Industry.

President Obama, with much fan fare, has introduced a jobs bill which he asserts will lead to an increase in jobs and a turnaround of the economy. Unfortunately, the largest single segment of the economy which is preventing a recovery is the housing market. There has never been a rapid recovery from a recession that has not been led by the housing market.

The construction industry has been the hardest segment of the economy hit by the recession. Construction, with 7.2 million wage and salary jobs and 1.8 million self-employed and unpaid family workers in 2008, was one of the Nation’s largest industries. These jobs are now down 29 percent from the high point in April 2006. The industry €™s unemployment rate of 20 percent, not seasonally adjusted, was the highest of any industry and more than double the overall rate.

CNN Money reported that “One reason that the U.S. economy still struggles to achieve sustained growth is that Americans are a long way from recovering the trillions of dollars of household wealth lost during the Great Recession.U.S. household wealth fell by about $16.4 trillion of net worth from its peak in spring 2007, about six months before the start of the recession, to when things hit bottom in the first quarter of 2009, according to figures from the Federal Reserve.”

“While a rebound in the stock market, an improved savings rate and consumer steps to reduce debt resulted in net worth gains since 2009, only a little more than half of that lost wealth – $8.7 trillion — is back on household balance sheets. That leaves American household wealth $7.7 trillion less than it was before the recession.

“Much of the lost household wealth came from declines in the value of real estate, which dropped $6 trillion, or nearly 30% of its value, from the end of 2006 to the end of last year. “

Until greater emphasis is placed on helping consumers restructure their mortgages to a lower interest rate, including principal reductions in some cases, the U.S. consumer will simply not be in a position to increase their spending leading to economic growth and an increase in jobs. The government should also consider providing incentives to home buyers , who have been reluctant to pull the trigger on buying a home even with record low interest rates. Existing home sales have a strong stimulus to the economy as home buyers buy furniture, kitchen appliances, and other durable goods. New homes sales also provide thousands of jobs in the construction industy as well.

Most of what is in Obama’s jobs bill is just temporary fixes and will not do much to stimulate job creation. This is especially due to the fact that even though he proposes incentives to hre workers for small businesses, he proposes to pay for this by increasing taxes at the same time on these same small business owners.

Until the Obama administration recognizes the importance of fixing the housing market, the economy will just continue to stagger along.