Stock market highs --- and high unemployment: the new normal?
by digby
The Washington Post rather blandly reports today that nobody in the government gives a damn about unemployment anymore because the stock market is roaring and the wealthy donor class in both parties is partying like rock stars. No really:
Washington has all but abandoned efforts to help the economy recover faster — and lawmakers don’t seem worried that voters will punish them for it.
There are no serious negotiations underway between the White House and congressional leaders on legislation to spur growth, and no bipartisan “gangs” of senators are huddling to craft a compromise job-creation package.
Yet economic growth remains slow by historical standards, and 11.5 million Americans are still looking for work. More than 4 million people have been unemployed for longer than six months. A Washington Post-ABC News poll found in April that two-thirds of Americans said jobs were difficult to find in their communities.
[...]
“I’m disappointed that there isn’t more of an effort being made” on the economy, said John Engler, the Republican former governor of Michigan who is now president of the Business Roundtable. “I don’t know if people have concluded that there’s been a reset — we’ve accepted these higher levels [of unemployment] and that’s a new normal. I hope not.”
Why? CEOs and stockholders are doing just fine. I'm sure they'll get to job creatin' any day now:
One key Washington constituency is feeling a new normal: stock market highs.
Fifty-two percent of white Americans earning $50,000 a year or more are optimistic about the national economy, a 13-percentage-point increase from December, according to a new Washington Post-ABC News poll. Thanks largely to that shift and to persistent optimism among higher- income nonwhites, economic optimism among all Americans is at its highest level since early 2009.
The change tracks the performance of the Standard & Poor’s 500-stock index, which has risen 20 percent in the past six months. Higher-income Democrats and, perhaps most notably, Republicans are all feeling the effects. Obama’s approval rating for handling the economy among higher-income Republicans and GOP-leaning independents, while dismal, has more than doubled over the past six months.
Well, as long as they're happy. But it does raise the question: with all this confidence, why aren't they creating more jobs?
Oh right. I forgot. They're worried about regulations now. But hey, at least we've made sure that labor costs stay low even as the moneyed elite are cleaning up on their investments. I'm sure they'll get to dismantling all the consumer and safety regulations in due time:
Sen. Amy Klobuchar (D-Minn.), vice chairman of the Congress Joint Economic Committee, said her efforts have moved past a “crisis mentality” and talk of “stimulus” and into measures to boost America’s economic competiveness in the long term, including skills training for workers, infrastructure improvements, export promotion and streamlining some government regulations.
She’s optimistic some of those initiatives could win enough bipartisan support in both the Senate and the House to become law this year. “If it was up to me,” she said, “this is all we’d be doing.”
There ya go.
The tone of this piece is so blase --- simply observing the phenomenon as if it's an act of nature --- that I have to assume this is just Village conventional wisdom. 7+ percent unemployment for years on end is kind of a shame, but there's no need to get all hot and bothered about it. It's just the way it is. The new normal. Is that sustainable?
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