Watching the Cheerleading Nitwits Bubble Channel, it's easy to lose sight of the real world. As the stock market skyrockets and experts uniformly declare the recession over, you'd think happy days were here again. But they're not.
I went to a get-together this weekend of old college friends. They were:
- A couple of ZITKs (zero incomes, two kids). He was recently laid off from Intuit and sounded grim about employment prospects.
- A couple of university professors with good jobs in a horrible hick town in the middle of nowhere. They'd love to get out, but report that there are essentially no universities hiring anywhere in the country.
- An office supplies salesman whose sales are down 50% with no sign of green shoots.
- A teacher whose income was cut slightly by a union negotiation to cut a day from the school year.
- A school administrator who received a "pink slip" layoff notice that was later retracted, but has already been warned about a new round of cuts for the next school year.
- A recent rental property investor who's found the rental market tougher than he expected. He's still optimistic about his prospects as Bernanke's money-printing spree will eventually cause inflation that will increase the nominal value of his property while devaluing the debt used to finance it.
Yes, GDP will likely flatten out and probably tick up this year. But what growth we get comes from the government running deficits at a shocking 13% of GDP. Unemployment is going to be ugly for a long time to come. It's quite likely that inflation will take off long before employment does, giving us a trip back to 70's-style stagflation.
But at least we can all feel better that Obama, Geithner, and Bernanke are spending, borrowing, and printing to inflate Wall Street profits, and Goldman Sachs executives' multi-million-dollar bonuses will eventually be spent somewhere and trickle down to the common folk somehow. I'm sure your kids won't mind picking up the tab.