Top of the News: It’s a good day for President Obama and the United States, a bad day for “conservatives” who base their platform on Obama’s failure. Unfortunately, the prize will be a ball and chain around the president’s neck unless he addresses the economic concerns of the middle class. In 2012, a David Petraeus or Mitt Romney will ask that Ronald Reagan question, “Are you better off today…?”
In addition to the worst jobs situation since the Great Depression — and the inadequate federal response to it — Obama faces less publicized pocketbook concerns. Alan Blinder, the former Fed vice-chairman, writes that 25 percent of American jobs could be vulnerable to being sent offshore. To Blinder, this calls for modest, but not “radical,” policy changes. He might feel differently if tenured Princeton professor jobs could be done more cheaply in Bangalore.
Yet another stealth problem is income inequality not seen since the eve of the Depression, or even the Gilded Age. The Economist reports that a quarter of the nation’s income is earned by the top 1 percent. This comes atop a raft of studies showing how those who make money through investments outpace those who work for wages.
Income inequality is bad for a host of reasons, including political instability and loss of opportunity. Most especially, it is a sign that the great middle class created in mid-20th Century America is under stress like never before.
And these are two stealth issues. Job losses and insecurity, foreclosures, loss of wealth by average Americans and the closing of family businesses are right out there. Meanwhile, the administration, like its predecessor, seems most concerned with the financial big dogs. Indeed, Treasury Secretary Tim Geithner seems to talk with them like a teenager with a new phone.
The president is having lunches with CEOs, including Amazon’s Jeff Bezos. That will certainly mollify the pitchfork crowd.
Today’s Econ Haiku:
Cure local IPO woes
It will be a trial