Washington: Barack Obama lobbied support for his $825 billion stimulus package on Tuesday after Timothy Geithner, his pick to help restore the crumbling US economy, was sworn in as treasury secretary.
As Federal Reserve policymakers were to hold their first meeting of Obama’s presidency in search of new tools to kickstart lending, more big job losses highlighted the global impact of the crisis facing the world’s biggest economy.
Authorities in Asia meanwhile tried to battle the impact of the downturn, with Japan saying it would inject public funds into ailing companies while India’s central bank held leading interest rates at historic low points.
Two giants of the auto industry also took a hit from the economic crisis with Honda rolling back production further in Japan and North America and Audi announcing a temporary stoppage at a plant in Hungary.
Obama, hoping for strong cross-party support for his rescue plan, scheduled talks for Tuesday with congressional Republicans who have said his $800 billion-plus stimulus plan is too expensive and will not work.
Speaking as Geithner’s appointment won Congressional approval, Obama underlined the urgency of the work at hand, noting that 2.5 million jobs were lost last year and seven major corporations had just announced thousands more cuts.
“We cannot lose a day because every day the economic picture is darkening, here and across the globe,” Obama said at the Treasury Department.
“It ill take a secretary of the treasury who understands this challenge and all its complexities to help lead us forward,” added Obama, who is eager to confront the worst US downturn since the Great Depression of the 1930s.
Geithner, a senior Treasury official in the 1990s, brings inside knowledge of how the crisis has unfolded from his most recent job as president of the New York Federal Reserve.
Geithner took the oath amid a slew of grim news on the jobs front from all sides of the globe.
The latest large-scale losses came from Japan where electronics maker NEC Tokin announced it would shed about 9,450 jobs worldwide due to the economic crisis.
Japanese firms have been severely affected by the downturn, which has pushed the world’s second-biggest economy into its first recession for seven years.
The country’s largest brokerage Nomura Holdings reported a $3.8 billion net loss Tuesday for the three months to December.
A survey released Tuesday said 400,000 temporary workers in Japan’s manufacturing sector are expected to lose their jobs by the end of March.
But despite the grim news, Tokyo’s Nikkei stock index soared 4.9% as investors responded positively to reports that the government plans to channel funds worth ¥1.5 trillion ($17 billion) to struggling industries.
Meanwhile in India, Asia’s third-biggest economy, the central bank reduced its growth forecast to seven percent due to the deepening worldwide recession as it held leading interest rates at a historic low of 5.5 percent.
Europe’s number one economy, Germany, is hoping to cushion the impact with a 50-billion-euro (66-billion-dollar) stimulus package which was approved by Chancellor Angela Merkel’s cabinet Tuesday.
An earlier raft of measures worth around 31 billion euros, approved in November, was denounced as insufficient.
The problems were highlightged with an announcement that Audi is to halt car and engine manufacturing in Hungary for a week next month.