The most astonishing and surprising thing I find about Washington DC today is the contrast in mood between DC today and what DC was thinking a generation ago, in 1983, the last time the unemployment rate was kissing 10%. Back then it was a genuine national emergency that unemployment was so high–real policies like massive monetary ease and the eruption of the Reagan deficits were put in place to reduce unemployment quickly, and everybody whose policies wouldn’t have much of an effect on jobs was nevertheless claiming that their projects were the magic unemployment-reducing bullet.
Today…. nobody much in DC seems to care. A decade of widening wealth inequality that has created a chattering class of reporters, pundits, and lobbyists who have no connection with mainstream America?
How many pundits have lost their job since the recession started? Hell, Jim Cramer was the go-to guy for cable news when the market dropped 1,000 points last week.
General Egali Tarian Stuck
Well, this one is easy. When we have more miserable Americans, we need more pundits to tell us how miserable we are. Just your Free Market at work, Governing.
Jude
Just one decade of rising inequality?
It is to laugh.
Try three and a half.
jeffreyw
OT, but Iceland is arresting bankers.
DonBelacquaDelPurgatorio
That’s like having Sarah Palin come in to talk about the efforts to eradicate sleeping sickness by the World Health Organization.
Mike Kay
Not sure what he’s talking about.
We’re currently experiencing massive monetary ease – the fed fund rate is at zero.
We’re currently running high demand-side Keynesian deficits in addition to the largest stimulus package in us history.
tomjones
I’m a fan of Brad DeLong, and I’m no deficit hawk, but given the sovereign debt crises wracking Europe, perhaps we should start thinking about long-term fiscal health.
It does suck tremendously that so many are unemployed, but how can the government create jobs without massive deficit spending? When there have already been rumblings from those damnable ratings agencies about America’s AAA rating possibly being vulnerable?
It won’t help the unemployed if we go the way of Greece.
Poopyman
@jeffreyw:
I wouldn’t call that OT. I’d call that a good idea.
Blue Neponset
I agree with DeLong about the chattering classes not giving a shit about average Americans, but the idea that 1983 and 2010 are extremely similar seems odd.
The Prime Rate in 1983 was 11% today it is 3.25%.
We also just spent a ton of money bailing out Wall Street and stimulating the economy. I don’t remember that happening in 1983.
jeffreyw
@Poopyman:
Yeah, maybe the idea will spread.
Hunter Gathers
@tomjones:
What do we cut?
Defense?
Tea-baggers and Baby Boomers only feel safe when we spend as much money as we can killing Muslim Darkies.
Social Security and Medicare?
Like the Boomers and Baggers will go for that. They earned that money, unlike the dirty mexicans and lazy blacks, buying t-bone steaks and sending all 12 of thier stupid lazy kids to my perfect little angel’s school.
Those are the big 3. You can’t solve the problem without cutting those 3. Which will never happen, because the people making most of the noise about deficits will shit themselves and take to the streets and riot if we touch their Safety and Transfer Payments.
Napoleon
The lack of concern for the unemployed and the working class is one thing that bugs me most about how people in this country think.
Mudge
Everyone should read Ezra Klein’s interview with James Galbraith. The deficit fear is a canard that is easily bought by the average citizen, who equates personal deficit with the deficit of nations (not the same thing). The only way to expand the economy is to spend and get money flowing and create jobs. Only fear mongering Republicans say that we need austerity. We neither need cuts in programs nor tax increases (for other than the wealthy) at the moment. Anyone who says they aren’t a deficit hawk, then argues we need to deal with the deficit, is a deficit hawk.
ISLM
@5 and @6. The “massive monetary ease” is largely just bank reserves parked at the Fed doing very little. Last year, the Fed was the lender of both first and last resort because private banks were doing none of it. The collapse in private sector borrowing has not been made up in public sector borrowing.
We need to start addressing the structural deficits, which Obama is doing. On the revenue side, the Bush tax cuts are expiring. On the cost side, we have begun addressing one of the large drivers: health care. We are starting to wind down the Iraqi Stimulus Act of 2002, which cost us directly $900 billion. Obama and Gates are also laying the foundation to address another major cost driver: the bloated defense budget.
The Moar You Know
@Jude: Exactly. This shit has been going on since I first hit the job market. In terms of buying power, I made the most money I’ve ever made back in 1985. It’s fucking ridiculous what has happened to this country.
The press isn’t to blame for not giving a fuck, though. Their readers and viewers don’t give a fuck either, they’d rather spend their time blaming brown people and queers for the state of their miserable lives than actually addressing the political reality that has made them that way.
Blue Neponset
@Mudge: The reason the deficit scares me is: Republicans will be in charge again before it can be fixed. In 2012 I expect the GOP to win back the House or Senate. We can’t cut taxes to pay for the deficits and the R’s won’t ever raise taxes or cut spending.
I agree we would benefit from another stimulus bill but we are sharing the country with 100,000,000 morans. We can’t ignore that and as a result we have to idiot proof the economy.
david mizner
Nah. Mostly the lack of concern about jobs is due to the lack of concern among the political class. Neither party gives a shit. ’82 was before the DLC-corporate takeover of the Democratic party, and both parties had their eyes on the working class Dems that Reagan had stolen from the Democratic Party. Plus the memory of Ted Kennedy’s primary was still strong.
Different country then (although reporters weren’t actually ordinary folk back then.)
Brandon
@tomjones: This is the kind of stuff that makes me want to scream. What is happening in Europe right now is particular to Europe and the monetary union. It absolutely has no bearing, nor does it bode anything regarding our future. The problems in Greece, Portugal and a lesser extent Spain are because of government debt, but the debt-to-GDP ratios in these countries are many a factor beyond what we are running in the U.S. We are not “spending ourselves into oblivion”, that is just a Republican talking point that seems to have worked very well on you. Furthermore, the problem in Greece is exacerbated by the fact that they cannot devalue their currency because of the EUR. If Greece could devalue, they could reduce the cost of servicing their debt. If you haven’t noticed, when Bush ran up the national debt on worthless spending (worthless because giving tax breaks to rich people has minimal economic benefit – they keep it instead of spending it and of course defense spending has a lower benefit than spending on infrastructure or education), that is exactly what he did with the dollar. Our national debt is an issue, primarily because it was wasted. Is inflation a worry? Of course, but as long as we have a global savings glut it is less of an issue until say China has an economic shock.
Maude
@Napoleon:
The lack of concern for anyone other than oneself is disturbing.
This country has been up ended.
The unindicted criminals who caused this are for the most part trotting around as if nothing happened. And, it didn’t, to them.
The ones who suffer because of their actions are looked down on. Go figure.
adolphus
and
Both are right. And both are why it concerns me that so many of our political/media leaders come from a relatively small number of cities/states/schools/families. (See “Why Her, Why Now Thread) As I said there, I don’t hold it against Kagan personally and don’t think this should stop her nomination. But am I the only one who sees the issues raised in these two threads as part of the same larger trends?
El Cid
This is easy. Last time it was a Republican President, and it was Ronald Reagan, to whom the establishmentarian press paid high fealty, and of course, Ronald Reagan was a living God, and not a Kenyonesian Commonist.
ISLM
BTW, the comments at this site are moderated? By whom or by what?
Nick
@Napoleon:
I spent a good deal of 2006 and almost all of 2009 unemployed. In both those times I had people who call themselves liberal tell me “just go out there and get a job and stop complaining”
Zifnab
@tomjones:
We have been. That’s why the HCR Act was so important. It is meant to reign in the rapidly inflating price of health care. It’s why a Jobs Bill is necessary. It’s why infrastructure spending would do a world of good. And why raising taxes on the upper class can take the tax burden off the lower class, so we can get back to consumerizing again.
Everything Obama has been pushing has been for the long term economic health of the nation. But that means pissing off a lot of short term interests.
Bill Section 147
@Mudge: This points out another in the string of media failures. Or rather the media doing its new job as opposed to the old “information provider” role it used to fill. They throw some expert’s spew at us about deficits without mentioning that the author quoted was fine with the whole concept 8 years ago.
I would like to see one deficit hawk who was flying as hard and as high when GW was the one who wouldn’t cap the well. That person I would at least consider giving a read and some thought.
El Cid
Long term fiscal health would be vastly improved by more people working and more people being paid better, and thus paying taxes.
You don’t only look at the spending side. The other side of fiscal health is the revenue side, and it has largely degraded since the start of this collapse.
Bill Section 147
@Hunter Gathers:
The French Revolutionary in me has an idea.
Cerberus
@jeffreyw:
That is liquid awesome.
@Mudge:
It’s a bunch of greedy-eyed economics majors who think that makes them better than everyone exploiting the fact that most people don’t understand micro versus macro financing and economics.
With most political problems, you can sort of figure them out by relating them to yourself. How would I feel if I needed to carry around a passport and a birth certificate every day on pain of incarceration, etc…
But yeah, most personal responses to debt is to spend less, cut back to only bare necessities, but a country doing that is fucked because during times of economic downturn that causes budget imbalance (because people are out of work) they need desperately to spend to get people back into work and give business to the large number of ancillary jobs that rely on a normally functioning economy.
And it’s shameless to see the MBA types pimping this way of thinking simply so they can justify their side desire to destroy government for their personal enrichment.
Ash Can
@ISLM: If you’re posting for the first time (at least, the first time under the name you’re using for that post), that post automatically goes into moderation to make sure you’re not a robofascistospambot.
Cerberus
@Hunter Gathers:
Well, eventually, defense will need to come down, but cue whining and military-industrial complex.
What we actually need more than cuts is raises. I.e. raising the tax rate, especially on businesses and the rich by a ton. We get the government we pay for and a lot of people are Californicating themselves by demanding they get all the benefits of a functioning society without having to pay for it.
If we cared, the tax rate on the rich would shoot up to 90% for the top marginal rates at the start of every recession and that money would go towards directly funding new work on our broken infrastructure.
I beat we’d see a hell of a lot less “boom-bust cycles” if recessions hurt the rich as much as they do the poor.
The Moar You Know
@ISLM: By an unholy cross between an automated cash register and a psychotic Baptist minister – I refer to the horror that is the WordPress spam filter.
You probably entered the word “soshulist”, but spelled it properly. Doing so will get your comment, one that was no doubt brimming with the wit, wisdom, and erudite observances that most comments on this site have, banished to a netherworld where it will never be seen again, because the proper spelling of the word “soshulist” contains the name of a male erectile enhancement drug.
Also, sometimes WordPress just eats posts for fun.
Will
Why worry?
Our elites got there by their hard work and deserve to prosper (see the thread on Harvard and Yale). The rest of us deserve to die in poverty, because otherwise we’d be leeching money off our superiors.
It’s all working out for the greater good. Our suffering is the necessary fertilizer for the true paradise of the Best and Brightest.
ThatLeftTurnInABQ
The chattering and decision making classes know no fear today (except fear of brown people). They do not walk out their front doors every day after having kissed their family goodbye because they never knew if today was going to be the day that their car would blow up as soon as they turned the key in the ignition, or an IED was waiting for them on their morning commute route into Wall St. or central DC. Contrast this with the late 19th and early 20th cen. when anarchist bombs and red revolution threatened them from below, and after 1918 the reds were also loose abroad.
And this is the main point of the GWOT – to get a security apparatus in place and the ideological foundation for using against our own people, such that the top tier in our country need never fear anything from below, no matter how badly they fuck up. The counter-terrorist national security state and it’s informal apparatus in the news media was created and designed for the express purpose of suppressing domestic dissent, both directly via violence, and more effectively and indirectly through the implied threat of violence. And the people aren’t stupid, contrary to appearances. They know that if you step too far out of line, you’ll be tased, shot, tortured and end up in a black hole someplace beyond the reach of law or humanity.
Welcome to AmerSoc everbody. Buckle your harness down good and tight, and be sure to keep you hands and feet inside the ride at all times. And don’t forget to smile for the cameras.
Poopyman
@The Moar You Know:
Nice! Snarky and yet depressingly accurate. Well done!
ETA: It picks up on any number of spamish words, but “fuck” is not one of them, fortunately.
Mnemosyne
@tomjones:
Sounds like blackmail to me. “You want to put more regulation on us? Fine, we’ll tank your whole fucking country if you do.”
Have I mentioned lately that the hatred I feel for the banksters is weak compared to the hatred I have for the ratings agencies?
Ash Can
I’m not so sure Brad DeLong is on target with his assessment of 1983. I recall the unemployment numbers (of which I was a part; it took me two years to find a permanent job in the early 80s) being nothing more to Reagan and his clusterfuck of an administration than an excuse to dismantle the federal government. And his deficits didn’t result from employment stimulus policies, they resulted from his pigheaded refusal (for a time) to raise taxes and be realistic about his profligate military spending, along with a Democratic legislature’s refusal to allow him to wipe out spending on programs that actually benefited American citizens at large. Reagan either didn’t give a flying fuck about unemployed Americans, or had no idea in hell what to do to help them. Or both.
jron
there are a couple local factors at work in this:
1. you’ve got the DC culture, full of lobbyists, lawyers and other comfortable professions that run in the same circles with most highly-placed ivy-colleged reporters and (especially) editors.
2. you’ve got the DC economy, which is simply not experiencing the same downturn as the rest of the country. Sure, some neighborhoods are, but by press accounts, they don’t exist.
This part of it isn’t new. Remember Kaplan’s offensive “Real America” series several years back? If the Post had any interest in “Real America,” and not “where some of our interns’ grandparents live,” they could have walked down the street to find it. Just as they can walk down the street a ways to find the real effects of the high unemployment rate. But in the fancy DC neighborhoods, unlike in the fancy neighborhoods in the rest of the country, there is no high unemployment rate to worry about.
Poopyman
@Mnemosyne:
What? You can’t hate them both with the heat of a thousand suns? Have I taught you nothing, Grasshopper?
Hawes
I’ve wondered about this. Maybe it’s what Mary Ellen Lease was saying about farmers 125 years ago: We need to raise less corn and more hell.
OTOH, I remember hearing David Kennedy talk about unemployment in the 1930s. It wasn’t only 25% of people out of work, it was close to 25% of households without a wage earner.
Today we have multiple earner households in a way that we didn’t have even 30 years ago.
I’d like to see some economist compare household employment numbers. If you’re a two income household and one of you loses your job, you’ll foreclose on your house, but you can still rent an apartment.
Or, you’re suffering, but you’re not rioting in the streets suffering.
So it goes unnoticed.
MMonides
Um, Brad’s ignoring the fact that it stayed above 7% for 3 years. His argument isn’t based on the actual data, sorry.
jl
Krugman has a graph comparing projected deficits as percent of GDP in the US and Greece.
Are We Greece?
Paul Krugman, NY Times blog
May 12, 2010
http://krugman.blogs.nytimes.com/2010/05/12/are-we-greece
They do not look the same, do they?
You can also look at CDS spreads to gauge risk market perceives in various countries
Why Isn’t Britain In More Trouble?
Paul Krugman, NY Times blog
April 30, 2010
http://krugman.blogs.nytimes.com/2010/04/30/why-isnt-britain-in-more-trouble/
(you can also follow Krugman’s link to Financial Times for more analysis of spreads and source for graph)
They also do not look the same.
Note particularly the different behavior of UK and US spreads at end of data series compared to Euro countries.
The proximate cause of crisis in Greece, Portugal and Spain is inflexibility in the Euro currency union, not debt per se. Greece would have problems with its deficits and debt regardless of Euro, but it is the Euro that has turned the situation into a crisis.
So, deficit hawks here are wrong, at least for UK and US.
MMonides
I mean this is a REALLY weird argument. The Obama Admin has argued that EVERY BILL they support will create jobs. Lilly, Stimulus, HCR, Energy, FinReg… they’ve couched them ALL as jobs bills. What channel is Brad turned to?
sparky
@ThatLeftTurnInABQ: good point. i would also add that there’s no John Altgeld or Henry George today either.
but the remarks about Obama are uh, crap. HCS (health care swindle) is not going to do anything about reining costs in–definitionally, it can’t except on the margins, as the major sources of cost in the US are 100% protected. it is self-deluding silliness to argue that forcing all of the US to provide profits for private insurers is somehow going to lessen costs in a significant fashion.
edit: you could argue that it is a lame effort to expand coverage, but that’s not the same thing as cutting costs.
and let us not forget that mister Obama sought a spending freeze for everything except more guns to blow up brown people.
Martin
@tomjones: Regulation. You want jobs – do what California has done and tell power companies 20% of their electricity generation has to come from renewable sources by 2020. They’ll find a way to do it. Yeah, our electricity rates will go up, but consumers will replace light bulbs and install solar panels and cut consumption (making the 20% by 2020 challenge easier to meet) and also create jobs making and installing solar panels and so on.
Jobs have always come by shoving the nation farther into the future, whether it was industry or government doing the shoving.
Brachiator
This is a very interesting question. With the collapse of the print media industry, quite a number of reporters and all the people who worked to help in the publishing of newspapers and magazines have lost their jobs.
From a recent CNN story:
But pundits are eternal.
TenguPhule
Kill them with fire, it’s the only way to be sure.
ksmiami
eliminate all income and property tax, increase capital gains tax rates and put a large consumption tax on luxury items. That is the way to alter our behaviors and reward people
Corner Stone
@ThatLeftTurnInABQ: I’ve enjoyed your commenting here, such a shame you’ll have to be leaving us shortly.
chopper
@Brandon:
much of the problems in specific european countries (like greece) revolve around the restrictions that come with a common currency. k-thug has argued for a long time that europe wasn’t ‘ripe’ for a union-wide currency, and one reason greece is eating so much shit is that they can’t just up and devalue vs other countries in the EU. this inflexibility is really a problem.
that doesn’t directly effect us, no doubt. problems in europe tho will cause trouble here.
Remember November
We are not Rome, we are Capetian-era France.
Brachiator
@Martin:
What? What?
Recently in Southern California, the Department of Water And Power (DWP) suckered the Los Angeles City Council into approving a permanent rate increase (which was only supposed to be for three months) even though the agency has more than $1 billion in the bank.
In return, LA City Council got to transfer some city jobs to the DWP payroll — at a higher wage and pension cost — and the DWP later transferred $73 million to LA’s general fund.
Neither jobs nor regulation are coming. And solar panels, which should almost be a no-brainer in California, are not a solution for a number of reasons. Home sales are stagnant, and very few new home proposals include solar because they add too much to the home cost and they are extremely aesthetically unpleasing. So while you see some solar paneling for commercial property, it just is not big source of jobs.
On top of all this, most analyses of the California economy suggest that energy proposals will kill far more jobs than they create. Oddly enough, this doesn’t worry the most fanatical energy freaks.
SB Jules
I was around during Reagan’s recession, was unemployed for awhile & I do not remember all this exciting action out of Washington. Total bs from delong, I think.
Brachiator
@ThatLeftTurnInABQ:
What?
Scamp Dog
@ThatLeftTurnInABQ: Actually, that’s what makes Osama bin Ladin a freaking genius. By hitting members of the elite (banksters in NYC, the big shots in the Pentagon and maybe the White House in DC), he made them panic, decide to go to war in Iraq, and sell out our civil liberties.
His idea was to bleed us dry in Afghanistan, like the USSR. We did fairly well there (at first), and might even have captured him and put an end to al Qaeda. But no, we decided we had to go into Iraq to teach everybody in the Middle East a lesson, and sure enough, now we’re bleeding ourselves dry. Oops.
Since a bunch of unemployed Americans don’t have any effect on their lives, we’re on our own.
ThatLeftTurnInABQ
@Brachiator:
I took it to mean that the black helicopters are winging their way to my house as we speak.
Of course wascally wabbits are sometimes a little bit hard to catch…
And just in case our friends at #-#-# agency are listening in and find this conversation to be a matter of concern, umm no I’m not advocating for terrorism or other forms of violence, domestic or otherwise. I don’t think that will solve our problems – in fact I think it would make things much worse, as we already know from recent experience (props to Scamp Dog #53 for connecting the dots). What I am doing is making an argument based on comparative history (especially now vs the Gilded Age) which I hope can be used to influence our current rulers to start listening and paying heed to less destructive ways for getting their attention, and putting things on their agenda which (absent some sort of pressure from below) they would tend to ignore. That is something their historical predecessors have not been inclined to do in the past, but hey there’s always a first time for everything. Surprise me. Please.
Bill Murray
@Poopyman: Most people’s warranties top out at 1500 suns, and this goes down with age. I personally can’t get much over 800 suns as I crest middle age.
Steve R.
@Blue Neponset:
The point is that no one in D.C., and that includes the Democrats and the Administration, appear to be greatly concerned about ongoing high unemployment. High unemployment generally only hurts Presidents’ electoral chances when it hits close to an election and Obama doesn’t have to face the voters for years. Even with the bad economy, many Congressional incumbents feel safe enough. The GOP have nothing to offer people suffering for want of work. In other words, nobody seems to care very much and that indifference goes all the way to the top.
Corner Stone
@Scamp Dog:
In my opinion he wanted panic in the proles and struck at major symbols of power for that reason.
Cheney’s ghastly “1%” morality notwithstanding, I personally do not believe the “elites” were scared or paniced at all. Those with money saw a way to increase their money and those with power saw a way to increase their power.
It was the mendacious ginning up of fear by the elites that has led us to where we are now.
ETA – so yes, OBL got what he wanted – but with a hell of a lot of help.
Corner Stone
@ThatLeftTurnInABQ:
And, Citizen, they will…not…be…laughing
timb
@tomjones: Seriously? you think it would better if we cut those people loose from stimulus and unemployment so bond owners, making oodles of cash, would feel better about their investment, which doesn’t come due for decades and whose economy (China and other Asian countries) is tied to US government spending, US consumer spending, and whose asset value is tied to the amout of US bonds they hold?
Is that really a perspective we should have? You want riots int he streets (like the 30’s)? Then, balance the budget without slashing military spending and you’ll get it a helluva lot sooner.
timb
@Blue Neponset: They’ll go the way of the Whigs by 2016 or radically change their party.
I used to think it would be obviously the latter, but the Republicans are so unserious, so Limbaugh-esque, I think it’s even money
joe from Lowell
I don’t buy this argument. DC isn’t panicked because the economy is improving. There were almost a quarter million jobs created in April alone.
DC was panicking something fierce back in January.
D-Chance.
By 1988, the unemployment rate had dropped to scarcely 5%, with decreased inflation rates (part of Carter’s infamous ‘misery index’) and lower interest rates, as well.
The difference between 2010 and 1983 is that, in 1983, President Reagan and the Dem congress were adults who could grandstand for the cameras, THEN retreat together to the back room and actually get things done. Today’s kids have the grandstanding thing down pat, but little else.