85,000 more jobs shed in December, only 2 1/2 times the number forecast by market “experts”!
It’s difficult to recall in Gorilla’s lifetime when reality and fantasy diverged so much in the US economy and in the perceptions of those charged with doing something about it.
In Realityville, the economy is not adding jobs; it’s not growing more than anemically. Most growth is replacing inventory from short-term, ineffective schemes like cash for clunkers. The real unemployment rate is above 15% (the 10% headline rate doesn’t count those who’ve given up looking for a job). Auto sales are falling again. Home prices are declining. The CRE bubble is bursting. Consumers aren’t spending, they’re saving.
Meanwhile, in Fantasy Land, the Fed is worried about inflation, which doesn’t exist but might if a powerful central bank is mostly obsessed with defending its hawkish reputation. The political class is hopelessly deadlocked, so there’s little chance of the large scale stimulus (on the order of $2 trillion/year for the next 2-3 years) and jobs program the country has needed for over a year but hasn’t gotten. The chattering class is reading the tea leaves about Byron Dorgan, whoever he may be, and regurgitating the “Daddy, save us from terrorists” dirge. Americans on Main Street seem increasingly angry, despairing, and deranged.
Professor Marvel doesn’t have a magical answer to bring these disparate threads into something resembling a grown up approach. President Obama seems more concerned with rearranging the rhetorical deck chairs than proposing anything that just might be controversial.
Gorilla sums it up: “Rosy scenario doesn’t pay the mortgage, doesn’t provide health care, and doesn’t hire. What good is she?”
