This One is Too Hot, Too Cold, Just Wrong!

The New York Times, here via the International Herald Tribune, declares that we have achieved a remarkable anti-Goldilocks economy. Housing has cooled, manufacturing is too cold, inflation is too high, and Fannie Mae (of all places) is forcasting a 35% chance of recession.

Hold that thought.

Poverty might not be a new thing in New Orleans, where poor residents are having to fight for a simple roof-over-head, but now the suburban poor outnumber the urban poor. And more’s the pity, because the “good jobs” are all out in the suburbs now, and services designed to help the poor are all in town. As if that isn’t bad enough, in some states health insurance costs went up 89.2% in the last 6 years compared to a full-time pay increase of only 11%. And remember, this is in a state where the minimum wage goes up every year.

No wonder Joe and Jane Average think the economy sucks: their house value isn’t going up the way it used to, their health care expenses are going up, their wages aren’t going up nearly as fast as their expenses, gas is back up now that the elections are over, and there are a lot more people living in quiet poverty in their neighborhood than they imagined.

As if that isn’t enough, the local school has their hand out again, because that’s the only way to pay for field trips and orchestra programs and library books. I consider this an unfair burden upon parents, who are already expected to help with homework and school projects and transportation and volunteer work. It is even an unfair burden on teachers and administrators, who have to manage these fundraisers and account for the money at the end instead of actually teaching kids. I furthermore think this sort of thing widens the gap between “wealthy” schools and “poor” schools; parents in the wealthy neighborhood can afford to donate hundreds of thousands of dollars in aggregate but parents in the poor neighborhood cannot.

Nevertheless, having said all this about how bad the economy is when seen from the bottom, smart guys like Jim Cramer think it’s looking great from the top. Mr. Cramer predicts a 17% rise in the Dow, based on price targets of each of the 30 Dow Components. That’s a lot lower than GDP and higher than inflation. It’s higher than both combined. Higher than the two multiplied. By the way, that Bloomberg link points out “Even as the U.S. economy added 132,000 workers in November, more than economists had forecast, wages increased by only 0.2 percent. The average weekly paycheck of $574.27 last month was a modest gain from $573.25 in October.” First, it still takes 150,000-200,000 new jobs a month to absorb new entries to the workforce (stuff that in your “but we need undocumented workers” and smoke it) and second, I don’t know how people can support a family on $574.27 a week.

Sooner or later, Anti-Goldilocks needs to expect the Bears to come home.

In closing: How to hold corporations accountable; Best Wishes to Mr. Barrowman and Mr. Gill; homemade peppermint patties; and Child’s Play.