Monday, August 22, 2011

The View from the Bottom

What fat cats in Washington DC see and what the victims of the Lesser Depression see are two variant realities. Here's a bit from a post by Mark Thoma on his blog Economist's View:
One reason that I don't like the framing of the "are we headed for a second dip" question is that it leads to a sigh of relief when we are told that we might get lucky and merely have an extended period of stagnation instead. It makes it appear that the answer to the "should we do more to help the unemployed" question depends upon whether a double dip is ahead. But an extended period of stagnation or even a slow, slow recovery (which almost seems like a good outcome at this point) are also problematic and cry out for more help for the unemployed. With so many eyes on the double-dip question, and with policy seeming to depend upon the answer, I'm worried we've forgotten how unacceptable alternative but not quite as bad outcomes would be. Unless there is a miracle recovery ahead, and that's pretty unlikely at this point, policymakers need to do what they can to increase the pace of the recovery in any case, not just if there's a double dip. In fact, policymakers should have provided more help already -- at the very least plans should be ready.

The president has promised a job creation program will be unleashed next month, but I'll believe it when I see it and it's hard not to wonder what took them so long. They can't possibly just be figuring out that they need a plan to deal with this, can they? I realize there's a legislative cycle to worry about, that they are waiting until Congress reconvene before moving forward, and it's not like this is an emergency or anything that demands immediate action. After all, the people writing the legislation have jobs, so what's the rush?
The fat cats don't see any need for a rush. They've got their paychecks coming in, they have their health plans, they have job security, they can make their mortgage payments, they can send their kids to college, and they know they have a comfortable retirement waiting for them. So what if there is 9% unemployment and 25 million unemployed, under-employed, or so discouraged they've given up looking.

I've always wondered how a homeless person can look for work, even if the employer had a job, there is no phone number for a call or an address for a letter announcing the job is waiting. Falling out the bottom in the US is so much more cruel than the fat cats can imagine because you live in a land of luxury where $100,000 cars rush past you as you carry your bundle of a "lifetime of possessions" in a bag under your arm or on your back. The rich may worry about getting a reservation in a crowded restaurant, but you have the certainty of not having any meal awaiting you anywhere since you have to scrounge and hope to hit it lucky somewhere.

No wonder Obama isn't in a hurry getting that "jobs plan" ready. It has only been just over 2.5 years since America hit bottom. There is still plenty of time to leisurely mull over the options with your advisors and consider all the political angles. No hurry.

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