Economists have been warning that we might face another bubble – possibly in commercial real estate or commodities. The fear is, like the dot-com bubble or the housing bubble, this one might blow up in our faces. But the biggest economic bubble is already here.
It’s the one surrounding Washington.
That bubble is huge, stretching from one end of the Washington Beltway to the other. Inside is one of the most consistent economic bubbles in history – the bubble of ignorance.
Washington is a city of know-it-alls. It holds policy experts for every topic from near-Eastern trade to potty parity. People in the city know everything – everything, that is, except what it’s like not to hold a job. Although increasingly, voters have decided it’s about time some of them learn. Sen. Arlen Specter joins other incumbents who have fallen victim to a throw-the-bums-out election mentality. (Specter is, of course, one of the bums.)
Unemployment is all-too common in the rest of the nation where joblessness is a whisker away from 10 percent and much higher if you count workers who have given up looking. Among areas with more than 1 million residents, the D.C.-metro area ranks third best in unemployment at 6.7 percent. National unemployment is nearly 50 percent higher.
Elsewhere, our friends and family members are hurting from an extended downturn that shows no significant sign of easing. Sure, the media might want us to think so, that “prosperity is just around the corner,” as Herbert Hoover once said. CNBC host Maria Bartiromo recently credited some home construction gains to “signs of an improving economy.” NBC’s Savannah Guthrie raved about how “manufacturing had its best job growth in a decade.”
They sound like they are taking their cues from the White House. President Obama has been singing the praises of the economic rebound in recent weeks. When the nation added 290,000 jobs in the beginning of May, Obama touted the improvement and added, “we’ve got a ways to go.”
He’s got a sure spot on “Saturday Night Live” with that kind of material. A ways to go? Columbus had a ways to go from Spain to the New World. The United States needs several million new jobs to get down to where unemployment was at the end of the Bush administration. Sure job growth is better than losses, but at least 100,000 of those jobs were needed just to break even with population growth. And another 66,000 were temporary Census jobs.
That doesn’t leave much room for jobs people need to pay their bills and feed their families.
Washington politicians know little about that because this is a company town and the company is Uncle Sam. It doesn’t matter if you are a politician, a pundit, a media type or a government drone, your livelihood relies on the government. You live or work within the bubble.
In good times, the federal government taxes and grows. In bad times, it does so even more. We’ve seen 100 percent growth in government in 10 years. That spans two recessions, including the worst one since the Great Depression. It’s not always sunny in Philadelphia, but it sure is in D.C.
Outside of our nation’s capital, things are tough in ways the media aren’t describing.
A recent trip to High Point, NC, the “Furniture Capital of the World,” showed the nation’s capital is doing a lot better during the downturn than the furniture capital. Walk down Main Street and empty buildings and closed stores abound. A handy map lists dozens of local eateries, but many are shuttered.
The local Economic Development Corp. called its 2008 annual report: “HIGH POINT: Extraordinary Success in Extraordinary Times.” By 2009, the annual report title included a line about “Tackling Challenges.” That’s marketing language for job losses. Two-thirds of High Point’s top 20 employers in 2008 had job losses by 2009.
Ordinary Americans are left to cope while the media and Obama talk about the turnaround we’d all like to see. But talking doesn’t make it so. Talk is unfortunately what the White House is good at. Since May 1, the White House Web site has included 109 postings on the economy and another 91 on jobs. Can you imagine how many there would be if they had genuine good news?
But they don’t. And it doesn’t matter how many trips the president makes to Elkhart, Ind., Buffalo or High Point to “feel their pain.” The truth is, he doesn’t. He makes six figures and has an army, literally, at his command. The same goes for Congress. Congressmen might worry briefly about unemployment, but they land at lobbying firms or in some other high-paying position. That’s life in the bubble.
But to the other 300 million Americans, life outside the bubble is a scary place to be.