Saturday, October 07, 2006
ECONOMY LARGER, JOBLESSNESS LOW, BUT CONSIDER THE INEQUALITY
Remember the good old days of just six years ago? The Chicago Tribune’s William Neikirk does:
It was Jan. 14, 2000, the start of another year, another century and another millennium. The economy was roaring along. The jobless rate was a low 4 percent. The “new economy” of young entrepreneurs energized markets with new tech companies that didn’t turn a profit. Nobody seemed to care, and excesses piled on top of excesses.
And then the bubble burst ...
Now, six years later, the Dow finally has surpassed its old closing high of 11,722.98, ending Tuesday at 11,727.34, thanks to an amazingly resilient economy driven by higher productivity and profits, lower tax rates and, crucially in recent weeks and days, a sharp decline from record oil prices. The Dow also set an intraday high of 11,754.55.
In current dollars, the economy is more than a third larger than six years ago, with gross domestic product, or annual output of goods and services, exceeding $13 trillion. Joblessness still is low at 4.7 percent.
Brace yourself for Neikirk’s devastating “but”:
But much has changed about the U.S. economy since the boom and the subsequent bust. Inequality within American society has grown. The budget deficit is looming as a major problem as the Baby Boomers begin to retire. Health-care costs have skyrocketed. The savings rate is negative as people go deeper in debt or use home equity loans to pay for purchases. Energy costs have surged until recent weeks.
And a Republican has been in office since 2001, which tends to have a curious magnifying effect on any news that may be spun as bad.