Is Joblessness the new Normal?

Why is it that every one in Washington DC is focused on the economic well being of about 2% of U.S. Households?  That’s the number of U.S. households that that were expected by the IRS to make greater than $250k AGI in 2009.  Why aren’t they paying attention to the number of unemployed?

The new jobless figures are out today.  They’re no surprise to  me and a lot of other economists.  However, the worsening job situation keeps going right over the heads of nearly every one on capitol hill. Worse, the only economic policy–that coming from the FED–that shows any recognition of and response to the situation is coming under attack by the right wing and libertarian propaganda machines.  Read this and realize what anemic job growth this country is experiencing.  We are in the Dubya  2 economy.

In a jolting surprise to the economic recovery and market expectations, the United States economy added just 39,000 jobs in November, and the unemployment rate rose to 9.8 percent, according to the Department of Labor.

November’s number was nowhere near enough to help the large ranks of the unemployed, and was far below analysts’ consensus forecast of close to 150,000 jobs and an unchanged jobless rate of 9.6 percent. More than 15 million people remain out of work, and 6.3 million of them have been unemployed for six months or longer.

The monthly snapshot of the job market could lend more support to the suggestion by the Federal Reserve chairman, Ben S. Bernanke, that the government continue to stimulate the economy, as well as the Obama administration’s call for an extension of unemployment benefits. The apparent loss of hiring momentum may also fuel the debate over whether the government should take aggressive steps to reduce the deficit in the near term or wait until the economy returns to better health.

There’s a good article up by Catherine Rampell–also from the NYT–on the face and features of long term unemployment.  That would be those folks that are labeled by the likes of Ralph Reed as unwilling to find jobs and happy living off of $200 to $300 a week.  The article is called: ‘The New Poor: Unemployed, and Likely to Stay that Way’.  These are the people whose lives hang like political pinatas from the ceiling of the Senate chamber.  How long will they suffer from Republican Fairy Tales and the unwillingness of Democrats to stay up for what is right?

This country has some of the highest levels of long-term unemployment — out of work longer than six months — it has ever recorded. Meanwhile, job growth has been, and looks to remain, disappointingly slow, indicating that those out of work for a while are likely to remain so for the foreseeable future. Even if the government report on Friday shows the expected improvement in hiring by business, it will not be enough to make a real dent in those totals.

So the legions of long-term unemployed will probably be idle for significantly longer than their counterparts in past recessions, reducing their chances of eventually finding a job even when the economy becomes more robust.

Steven Benen from the Washington Monthly sums up the likely political response vs. the necessary one.

If our political system were sane, awful news like this would be a much-needed wake-up call that would spur policymakers to action. There would be an immediate drive on the part of Congress and the White House to do far more to stimulate the economy, inject more capital into the system, and invest in job-creation measures immediately.

Instead, Americans just elected a new House majority that is prepared to do the exact opposite — taking money out of the economy, scrapping economic stimulus, and ignoring all job-creation measures. Voters were angry about the economy last month, and in a tragic irony, elected people intent on making the economy worse.

The majority in this country has elected people ‘intent on making the economy worse’ and a president who is likely to enable them.  Read this headline at WAPO: ‘Obama, GOP in quiet talks to extend tax cuts’. Extending tax cuts to the richest people in this country is an unfunded mandate of  $700 billion a year.  This a priority when the same party is whining about the deficit?  It is clear that most of Washington is only concerned about the deficit when it doesn’t impact their constituencies and the poor, middle class, and unemployed seem to be the constituency of no one.We only deliver frantic votes that are ignored and misinterpreted.

The White House and congressional Republicans have begun working behind the scenes toward a broad deal that would prevent taxes from going up for virtually every U.S. family and authorize billions of dollars in fresh spending to bolster the economy.

Negotiations have accelerated in recent days as Congress has confronted deadlines for extending a series of tax cuts that expire at the end of the month, renewing emergency jobless benefits and keeping the government funded into next year.

The talks mark the dawn of a new era on Capitol Hill, with resurgent Republicans holding far more leverage and commanding a more prominent role in crafting legislation. The private discussions, which parallel a more public set of talks, have left many Democrats grousing that President Obama is being too quick to accommodate his adversaries, who are still a month away from taking control of the House and expanding their presence in the Senate.

These “grousing” Democrats are the same ones that blew a huge majority and mandate on passing Dole/Romney Care instead of taking care of the economy right from the beginning.  They were also the crowd that passed stimulus spending that was inadequate and loaded with pork pies meant to stimulate a few at the expense of the many.

So, now folks like Senator Harkin find their Democratic Voice?  When they face the steam roller straight on?  This dandy quote is from HuffPo.

Sen. Frank Lautenberg (D-N.J.), for one, slyly acknowledged that he’d get himself in trouble if he answered whether or not he was happy with the administration’s engagement.

“You want me to be the [troublemaker]?… I’m too junior around here to do that,” said the 86-year-old, five-term senator.

Sen. Tom Harkin (D-Iowa) did a little less dancing. “I just think, if [Obama] caves on this, then I think that he’s gonna have a lot of swimming upstream [to do],” said the Iowa Democrat, a unabashed progressive who has been less reticent than most in criticizing the White House. “He campaigned on [allowing the rates for the rich to expire], was very strong on that, and sometimes there are things that are just worth fighting for.”

And if he decided to compromise away from that, a reporter asked the senator.

“He would then just be hoping and praying that Sarah Palin gets the nomination,” Harkin replied, insinuating that there would be few other Republicans that Obama could assuredly beat in 2012.

Oh, great!  We’re facing down a 10% unemployment rate with historic long term unemployment and all they can think about is the 2012 elections?  We are so f’d.