In Does Washington care about unemployment? economist Brad DeLong asks the question,
In 1983, Ronald Reagan’s Washington regarded high unemployment as a national emergency. Today, with unemployment kissing 10 percent, Barack Obama’s Washington scarcely seems perturbed. Why?
In 1983, when unemployment hit 10..5%, Washington was in a panic and it was considered a “genuine national emergency.” Unemployment is just about as high today. But, DeLong points out, “Yet, unlike 1983, there is no sense of urgency in Washington. … Instead, deliberations within the Federal Open Market Committee appear preoccupied with how best to apply the brakes.”
He says that DC insiders he knows tell him to calm down, that things are getting better. He thinks the problem is something else.
But whenever I wander the halls of Washington these days, I can’t help but think that something else is going on—that a deep and wide gulf has grown between the economic hardships of Americans and the seeming incomprehension, or indifference, of courtiers in the imperial city.
Have decades of widening wealth inequality created a chattering class of reporters, pundits and lobbyists who’ve lost their connection to mainstream America? Has the collapse of the union movement removed not only labor’s political muscle but its beating heart from the consciousness of the powerful? Has this recession, which has reduced hiring more than it has increased layoffs, left the kind of people who converse with the powerful in Washington secure in their jobs and thus communicating calm while the unemployed are engulfed in panic? Are we passively watching an unrepresented underclass of the long-term unemployed created before our eyes?
The price of Treasury bonds is up, which means demand is high — and that investors are not-at-all worried about our deficit. But DC is focused on reducing the deficit. This reflects more concern for the interests of the wealthy of Wall Street than of the working people on Main Street. This division is similar to the division between those who wanted more money circulating in the 1890, and were calling for us to move from a gold standard to a bimetal gold/silver standard so there could be more money circulating.
If they dare to come out in the open field and defend the gold standard as a good thing, we shall fight them to the uttermost, having behind us the producing masses of the nation and the world. Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold.
How about a cross of stock certificates instead?