"We do big things," President Obama said during his State of the Union speech in January. And, in fact, we do. Sometimes. Finding and dispatching Osama bin Laden certainly qualifies. "We are once again reminded," the president said, after announcing the terrorist's death, "that America can do whatever we set our mind to."
But if that's true, why are our leaders so accepting of a stagnant economy? If they really focused on the havoc it is wreaking on the lives of tens of millions of Americans, they would, in the memorable words of Richard Clarke, be running around with their hair on fire.
But they're not. Instead, they express concern but resign themselves to the fact that, as White House economic adviser Austan Goolsbee put it in an interview with HuffPost, the economy has "a long way to go." Meanwhile, we're being asked to accept years of underemployment, low growth and draconian cuts to America's social safety nets as the "new normal." Or, as Bill Clinton put it in a different context, the "tyranny of low expectations."
It's a testament to these low expectations of our leaders that we're supposed to take recent economic figures as some kind of good news. In March, the economy added 216,000 jobs and the unemployment rate fell from 8.9 percent to 8.8 percent. Not bad. But not good, either. And if you take a closer look at the numbers, you'll want to keep that celebratory champagne on ice. Because while adding jobs is obviously better than shedding them, even if we continue to add 200,000 jobs a month, it would take until 2019 to achieve the employment level we had when the recession started. "There are still five unemployed workers per job opening," Heidi Shierholz, economist with the Economic Policy Institute, told HuffPost, "far worse than the worst month of the early-2000s recession."
What's more, much of the downturn in the unemployment rate was actually caused by people giving up and leaving the workforce. As the New York Times noted, participation in the workforce fell to 64.2 percent, the lowest mark in 25 years. If you were to factor those who have stopped looking for work into the official unemployment rate, it would be 9.8 percent. If you were to include those working part-time who would rather be working full-time, it would be 15.7 percent. "Being happy with the falling unemployment rate right now," said Wells Fargo's Jeremy Ryan, "would be like being happy that your team won because the other team's bus broke down on the way to the field."
April's numbers were equally disconcerting: even though the economy added 244,000 jobs, the unemployment rate rose from 8.8 percent to 9 percent. Even worse, the unemployment rate for African-Americans jumped to 16.1 percent. And for those over the age of 55, the average length of time spent looking for a job is now over a year.
Add to that an anemic GDP growth rate of 1.8 percent for January through March, down from 3.1 percent for the last quarter of 2010, and the fact that, according to U.S. Census numbers released last week, the percentage of young adults living with their parents has jumped to a staggering 34 percent, largely because of their limited job possibilities.
Then there is the chilling reality that more than 28 percent of U.S. homes were underwater in the first quarter of the year, and foreclosures are expected to rise 20 percent this year. "We get tired of telling such a grim story," Zillow economist Stan Humphries told Bloomberg News, "but unfortunately this is the story that needs to be told."
Told, but apparently not listened to. At least not in Washington.
It's no wonder then that, according to a recent Gallup poll, over half the country currently believes we're in a recession or a depression. Or that a New York Times/CBS poll shows that 80 percent say the economy is in fairly bad or very bad shape.
How are these not hair on fire numbers?
Yet our leaders, who are supposed to be doing big things, seem instead to have made their peace with "the new normal." Take the Fed: it could be doing a lot more to create jobs, but instead it's guarding against the phantom bogeyman of inflation. "Why has Mr. Bernanke decided to accept widespread unemployment for years on end, even though he believes he has the power to reduce it?" asked David Leonhardt. "After all, does the economy feel as if it's on the verge of overheating?" Hardly.
At the New America Foundation's conference about the Federal Reserve, the Peterson Institute's Joe Gagnon said that the Fed's timidity is responsible for the loss of 1 million jobs. "Apparently," writes Mark Thoma, "the millions and millions of people who are unemployed, some of whom won't be reemployed until years from now if we do nothing to help, are supposed to be patient because people with power over policy are worried about inflation and higher interest rates."
Our elected leaders aren't any better -- less focused on the job crisis than on arguing about how to best divvy up harsh cuts to the social safety net and programs that benefit the middle class. Meanwhile, profits for the Fortune 500 jumped by 81 percent in 2010, to $318 billion. Clearly big things aren't out of reach for everybody.
It's not that we can't do something big about the economy -- it's that our leaders choose not to. Or, as Mark Thoma puts it: "We can't help to stimulate job growth if we don't try, and so far we aren't trying anywhere near hard enough."
President Obama himself connected the economy to his can-do speech about Osama. Immediately after declaring that "America can do whatever we set our mind to," he said, "That is the story of our history, whether it's the pursuit of prosperity for our people, or the struggles for equality for all our citizens."
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