One thing that the top 1% say, of any measure, is that those people in the Occupy Wall Street protests should probably be spending their time in better ways. In the NYT article, Anthony Bonomo, in that top 1%, says, “If those people could camp out in that park all day, why aren’t they out looking for a job?” It’s a common refrain, and not just from the top of the heap. Many people have said that who are nowhere near that 1%, who look upon the protests as the self-indulgence of a spoiled minority who are too lazy or too entitled to actually work.

Why don’t those damn hippies get a job? Well, the vast majority of them have a job, actually. But what about those slackers who don’t? This picture is all you need to know to reply to that:

There are currently four unemployed persons for every job opening. It is numerically impossible for every unemployed person to get a job. “Get A Job, Hippie!” may have made sense in 2000 when there was a bit over one unemployed person per job opening; today it is little more than a cruel insult. And this only counts the unemployed, not the underemployed or people who have dropped out of the workforce entirely. I’m sure if you counted the people who are part-time and looking for full-time work, or the people who have just plain given up, the numbers would be even worse.

It’s intellectually lazy to dismiss protesters as lazy no-goodniks who just need to take a shower, put on a suit, and start being productive members of society. The top 1% of income earners may work hard, and they may feel that they are being unfairly targeted in today’s economic climate. But the unemployed are even more unfairly targeted, and unlike the top 1%, they don’t have the income to help make them feel better.

• Current Mood: Pain
• Currently Reading: "Requiem For A Dream", Hubert Selby Jr.

Of course, although you always want to end up in the good/good box, not everything is going to be that easy. A lot of times things are going to be both good and bad. I’d say, for example, that raising the federal gas tax is good policy (more money for road maintenance, better for the environment, less use of foreign oil) but bad politics (taxes!). The Cash for Clunkers and home buyers credit programs were bad policy (merely shifting existing demand instead of creating new demand, at a significant monetary cost) but good politics (free money!). It’s the give and take of policymaking.

What is pretty clear, however, is that you should never knowingly put yourself in that bad/bad box. And that is what the Obama administration has found itself doing lately. The deficit deal was bad policy (putting a drag on growth) and bad politics (record low approval ratings). It’s unforced errors like these that are putting his re-election chances in doubt. At the same time, the administration is fighting against good/good actions, such as going after fraud on Wall Street. Putting away criminals who helped create the household debt crisis would not only be good policy, as it would deter people from making the same mistakes in the future, but it’s also good politics: people usually like seeing criminals get frog-marched into jail. Stopping bad banks from illegally foreclosing on people would also be one of those good things. But so far, Obama is content to nibble around the edges.

I’m not entirely sure why. Yes, Obama doesn’t quite have the innate political instincts and skill that Bill Clinton has, but then again, this is a no-brainer. Obama may be relying on Wall Street to fund his re-election, but money in his campaign coffers isn’t going to buy a good economy.

• Current Mood: Geographic
• Currently Listening To: "Money", Pink Floyd

I’m no great prognosticator, but I am educated enough to know when we are, in fact, shooting ourselves in the feet. Government layoffs continue to be a drag on the economy, as it turns out that government employees also live in houses and drive cars and eat food and engage in consumer spending. Every sane economist argued that austerity would only make things worse, and yet it takes a year to admit that maybe austerity was “addressing the wrong problem“. In much the same way as, say, a haircut does not address the problem of cancer, I suppose. When it comes to jobs, Josh Marshall has it right when he says it’s a case of “most of the economics profession, the bond market and the ‘liberals’ on one side and Republicans and beltway columnists on the other.” Even reliably liberal Nicholas Kristof is admitting that all this focusing on deficit-cutting really isn’t what 95% of America wants to focus on, proving that this isn’t as much an issue of ideology as much of an issue of the pundits versus people with blood still flowing in their brains. Personally, I feel that I have a new-found understanding for the tragedy of Cassandra; others seem to as well.

Of course, Democrats have much to blame, starting with Obama, who can give a mighty fine speech on ideas, but has all but given up on policies. Republicans have completely owned the debate by talking about “kitchen table economics” and “budgeting like a family”, as shallow and shortsighted as the resulting economic policies may be. It’s time for Obama to shift that debate towards more kitchen table economics, such as how nobody buys a house or a college education in cash and it’s great to take out loans to better yourself, especially when that money is free. So why not better ourselves as a country with some infrastructure spending? You know, put people back to work, clean up our sewer systems, fix those broken roads and bridges.

I’m not so pessimistic as to believe that we won’t get out of this funk and start acting like rational people again, but I have moved right up to that line in the past few months. The world is in too precarious a position with Europe acting similarly idiotic and China wobbling for the U.S. to be able to mess around much longer. I fear that we may end up in a position that could paraphrase Tacitus: instead of making a desert and calling it peace, we could eliminate our economy and call it prosperity.

• Current Mood: Holiday
• Currently Listening To: "Golden Years", David Bowie
• Currently Reading: "Fooled by Randomness", Nassim Taleb

I don’t see how we are going to get out of this slump anytime soon, so we may as well shoot for the moon. Why not a goal to make the country carbon-neutral by 2050? Sure, it would be a monumental undertaking, with no guarantee of success. But it would put us on the forefront of technology that is going to happen sooner or later, and what we are doing at present clearly isn’t working. Is there anybody who can provide the leadership to arouse the public support for a project like this comparable to the Apollo Program? Our country’s future may depend on it.

• Current Mood: Morning
• Currently Listening To: "The Man Who Sold The World", Nirvana
• Just Watched: Casino

In Greece, which is also in full meltdown mode, the sanest, most humane outcome for the Greek people would be a default on Greek bonds. Painful in the short term, but better overall in the long term. Instead, we get round after round of austerity that is supposed to improve the economy, but instead is leading to a potential death spiral. The latest idea is selling off state assets, which I guess makes sense in a perverse way: if your house is on fire and you manage to sell off the bedroom and kitchen, you can say that you now have fewer things on fire, and so you’re improving!

In both instances, the rational choices were not taken, both for ideological reasons and because it meant that the banksters would have to lose some money (the fact that at least in the U.S. there were no strong voices actively pushing for things like cramdown was also a huge problem). What’s good for the people in general isn’t what’s important; what’s important is what is best for those who already have most of the money.

As for the current deal-making on the federal deficit, the easy thing to do would be to let the Bush tax cuts expire (and winding down the wars in Afghanistan and Iraq won’t hurt either). Thus, we will end up doing anything but that. It’s only reasonable!

• Current Mood: Full
• Currently Listening To: "Life In A Glasshouse", Radiohead

Households are too far in debt. The tech bubble made people feel rich so they went into debt, and then when that burst, the housing market made people feel rich so they went into more debt, until that burst. Now how can they feel rich?

People are already saving more and cutting back on debt. This is wonderful. Unfortunately, this is the exact opposite of what a recovery needs. We can either have a robust recovery, or we can fix our balance sheets so we are not in hock (and by "we", I mean all of you, since I have no debt at all. Laudable, yes, but again not the way to fuel a recovery).

This does not mean that government stimulus is a bad idea. If nothing else, labor is cheaper right now so it’s a great time to do big infrastructure projects. In addition, since this measure is relative to GDP, increasing GDP increases the denominator and makes the ratio go down. But make no mistake, things will be bad until household debt plummets. If we don’t want a repeat of this, people need to find a way to keep debt low.

Currently, the United States gets the lion’s share of world resources. People can (and do) debate the morality of this setup, but whether or not you regard this as fair, it’s how things are. But only for the time being. There are two billion people living in the rapidly growing countries of India and China. Rapid economic growth means a rapid increase in the size of the middle class, and hence the desire for all of the trappings that it affords. We may have a good deal of the world’s iPhones, computers, cars, flat-screen TVs, and other consumer items, but there are hundreds of millions of other people who want their share.

This economic boom has a dark side: scarcity. While Peak Oil has been the main scarcity that people worry about in recent years, it is by no means the only one. There are projected shortages in many resources, everything from rare earth metals to the lithium that powers all of those cell phones. For many metals, the situation is far more dire than that of oil, but it has so far been under the radar.

It doesn’t take a lot of imagination to see where this is going: a burgeoning middle class, finally able to afford many of the items we in the U.S. take for granted, can’t get them due to running out of these resources. The fight for these resources like rare earths could drive geopolitics in the same way that oil has shaped the Middle East, and possibly with the same disastrous results.

The green economy can help turn this around. By reducing waste and increasing efficiencies, we are able to better stretch out these limited resources. Recyling and zero-waste become not some pointless effort to reducing the heating of our planet, but methods by which to ensure that scarcities do not become so acute that they lead to conflict.

Many times throughout history humans have hunted to extinction, always thinking there will be “plenty more” until they are gone. Now it is not animals, but neodymium and gallium that are dwindling. While it is possible to find other food sources, short of mining asteroids the only neodymium we have is what is on the planet. The green economy can help us figure out the best ways to most efficiently use these resources before it is too late.

• Current Mood: Worn out