Higher jobless rates could be new normalAll of those lost jobs in construction and the auto industry are gone forever, and nothing is popping up to replace them. The problem is exacerbated by the fact that, even before the recession, “many jobs had vanished or been shipped overseas amid a general decline of U.S. manufacturing.”
WASHINGTON – Even with an economic revival, many U.S. jobs lost during the recession may be gone forever and a weak employment market could linger for years.
That could add up to a “new normal” of higher joblessness and lower standards of living for many Americans, some economists are suggesting.
Now we’re all caught in a vicious cycle where joblessness leads to decreased spending, which leads to more lay-offs and even fewer jobs, which leads to further decreases in spending, and so on. All the economists quoted in the article agree that we’re hopelessly trapped in the suck and there’s no visible way out.
So now is the time for that legendary American ingenuity to kick-in, right? Now is the time to invest in new industries and new technologies, to invent new models of economic development, or even launch another New Deal, right?
Wrong. We must think outside the box. In this case, that means getting your minds right and adapting to high unemployment as a permanent feature of American life, you dumb schmucks. It’s the new normal.
“This Great Recession is an inflection point for the economy in many respects. I think the unemployment rate will be permanently higher, or at least higher for the foreseeable future,” said Mark Zandi, chief economist and co-founder of Moody’s Economy.com.
“The collective psyche has changed as a result of what we’ve been through. And we’re going to be different as a result,” said Zandi, who formerly advised Sen. John McCain, R-Ariz., and now is consulted by Democrats in the administration and in Congress.
It’s comforting to know that one of McCain’s former advisers is “now being consulted by Democrats in the administration” and by members of Congress. It’s also nice to know that this self-appointed interpreter of our “collective psyche” is probably counseling them to accept chronic unemployment as the new normal.
I don’t think this guy represents the pinnacle of economic reasoning, but there he is, pitching his two cents to the White House. And I’ve no doubt that the White House, in the interests of achieving that holiest of states — bi-partisan consensus — is taking his advice into consideration.
I wonder if this is also part of the new normal:
At rescued banks, perks keep rolling
NEW YORK -- Even as the nation’s biggest financial firms were struggling and the federal government was spending hundreds of billions of dollars to save many of them, the companies as a group were boosting the perks and benefits they pay their chief executives.
The firms, accounting for more $350 billion in federal bailout funds, increased these perks and benefits 4 percent on average last year, according to an analysis of corporate disclosures filed in recent months.
Some chief executives, such as Kenneth D. Lewis of Bank of America and Jeffrey M. Peek of CIT Group, the major small-business lender now on the brink of bankruptcy, each received about $100,000 more than a year earlier for personal use of corporate jets. Others saw an increase in the value of chauffeured services, parking or personal security.
Ralph W. Babb Jr., chief executive of Dallas-based lender Comerica, was compensated for a new country club membership, with an initiation fee and dues of more than $200,000. GMAC Financial Services chief executive Alvaro de Molina benefited from a $2.5 million payment from his company to help cover his personal tax bill.
I think I see the outlines of the new normal coming into focus, like the shape of a monster rising from a swamp. We accept the current level of 9.8% unemployment (a low estimate) as the baseline rate. We could even compromise and go a little higher, say, 12% maybe? Hell, if reality TV, wall-to-wall sports coverage and chemical food additives have done their job properly, we might even let it climb as high as fifteen percent before the great beast of the people finally lifts up its snout, smells something rotten and starts to get fidgety. Then we squeeze those remaining proles still lucky enough to have jobs in order to keep banks afloat and subsidize their CEO’s country club dues.
Sounds like a healthy economic model to me, except I’d hesitate to call it new. It sounds a lot like the oldest normal in history: a rich, tiny oligarchy living atop masses and masses of hopeless, poor dregs. All we need now is a new religion to cement the structure in place and keep it secure for the next two-thousand years.
Don’t worry. You’ll get used to life in the new normal. Cramped living conditions will bring your family closer together. As for a lack of work, look at the bright side: Monday mornings won’t suck so bad now. And you won’t miss your pride or dignity after they’re gone any more than you miss your baby teeth. Besides, Americans have always been known for their can-do spirit. We put a man on the moon. We defeated fascism and invented plastic. Surely we can condition ourselves to permanent unemployment and poverty? Just think of it as an adventure, like camping out.
Long live the New Normal!