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At bankers roundtable, Rep. Capito says job creation is 'real issue'

Economist at event at Blue Ridge CTC says true unemployment figure is about 16 percent

August 22, 2012|By MATTHEW UMSTEAD | matthew.umstead@herald-mail.com

MARTINSBURG, W.Va. — Long-term unemployment is “a real problem” facing the U.S. economy, a lead economist with the Federal Reserve Bank of Richmond said Wednesday during a bankers roundtable at Blue Ridge Community and Technical College near Martinsburg.

Robert E. Carpenter said the percentage of Americans who have been unemployed for about six months or more has not moved much since 2010 and comprises a substantial portion of the total unemployment.

Carpenter said the widely reported 8.3 percent unemployment rate released Aug. 3 by the Department of Labor does not include the number of discouraged workers who have quit looking for a job or those who have part-time work but still hope to find a full-time job.

When those groups are added to the calculation, the unemployment rate doubles to about 16 percent, Carpenter said.

If job growth doesn’t speed up, it’s going to be a long time before labor markets recover, said Carpenter, who emphasized his opinions were not that of the Federal Reserve Bank.

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U.S. Rep. Shelley Moore Capito, R-W.Va., who was the guest of honor for the roundtable discussion, said after leaving the meeting that Carpenter’s predictions for the economy were “a little drearier” than what she hoped.

“I think that makes our job in Congress even more important, and we’ve got to get to the real issue, which is creating jobs,” said Capito, who chairs the House Subcommittee on Financial Institutions and Consumer Credit.

Wednesday’s roundtable included a discussion of community banking activities sponsored by the Federal Home Loan Bank Pittsburgh, which works with regional financial institutions on community and economic development issues.

The bank is part of a national network of 12 privately owned wholesale banks created by Congress in 1932 to ensure available funding for mortgages, according to the bank’s website.

Robert Baronner Jr., chief executive officer of Bank of Charles Town (W.Va.), recounted how he secured a $5 million advance from Federal Home Loan Bank after Lehman Brothers “went down the tubes” in September 2008 just in case the Wall Street giant’s bankruptcy would cause people to empty their bank accounts in a “run” on the banks. 

“It was a really scary time,” Baronner said.

Other speakers included Devin McQueery of United Bank, who talked about participation in the Federal Home Loan Bank’s affordable housing program in cooperative efforts with Habitat for Humanity.

McQueery said affordable housing money was used to build six area homes.

Dean Young, chief financial officer for The Bank of Romney (W.Va.), touted the importance of the Federal Home Loan Bank’s community lending program in building Hampshire County’s new judicial center, which was completed in 2008.

Young said the funding was “vital” for the project, which he said cost about $8 million.

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