Obama's Trickle Down Economics

The Reagan years of "trickle down" economics meant that the rich got richer and the poor poorer. Here's a bit from an op-ed in the NY Times by Paul Krugman that accuses Obama of a new trickle down economics:

If you’re looking for a job right now, your prospects are terrible. There are six times as many Americans seeking work as there are job openings, and the average duration of unemployment — the time the average job-seeker has spent looking for work — is more than six months, the highest level since the 1930s.

You might think, then, that doing something about the employment situation would be a top policy priority. But now that total financial collapse has been averted, all the urgency seems to have vanished from policy discussion, replaced by a strange passivity. There’s a pervasive sense in Washington that nothing more can or should be done, that we should just wait for the economic recovery to trickle down to workers.

This is wrong and unacceptable.

Yes, the recession is probably over in a technical sense, but that doesn’t mean that full employment is just around the corner. Historically, financial crises have typically been followed not just by severe recessions but by anemic recoveries; it’s usually years before unemployment declines to anything like normal levels. And all indications are that the aftermath of the latest financial crisis is following the usual script. The Federal Reserve, for example, expects unemployment, currently 10.2 percent, to stay above 8 percent — a number that would have been considered disastrous not long ago — until sometime in 2012.

And the damage from sustained high unemployment will last much longer. The long-term unemployed can lose their skills, and even when the economy recovers they tend to have difficulty finding a job, because they’re regarded as poor risks by potential employers. Meanwhile, students who graduate into a poor labor market start their careers at a huge disadvantage — and pay a price in lower earnings for their whole working lives. Failure to act on unemployment isn’t just cruel, it’s short-sighted.

The Obama approach won't make the rich richer, but it will increase the social divide since those with jobs will become relatively richer than those without and that gap will grow not decrease. It will take a decade or more for the rift to be bridged, but those who lose ground because of the policy won't regain it. They will simply meld into the background. The new generation will see the rift disappear. But those deeply affected by this economic disaster will carry it with them to the grave.

I am completely disheartened by Obama. He was the hope of "change we can believe in" but ends up being a fairly ordinary politician. Worse, he is passive when he should be active. He has raised hopes and dashed them. At least when George Bush was elected most people knew that they wouldn't get a fair shake from government and all the goodies would go to the rich. With Obama there was a promise of change, but he has delivered almost nothing. Sad.