Hardball | March 05, 2013
>>> now, president obama and the economy. "the washington post 's" ezra klein is an msnbc policy analyst and ben white is politico's chief economic correspondent. gentlemen, while an imperfect measure of the overall u.s. economy , the dow jones is still what many americans look to in order to measure the health of the stock market , and today it reached a new high adding roughly 126 points in trading. it means that since 2009 , the low points of the recession, the dow has more than doubled which has surprised many market watchers. ezra , good news for all or just good news for some?
>> well, look, it's good news that the dow is coming back. i want to throw some cold water , i want to be a bit of an unfortunate buzz kill. the dow jones is a little weird in that it doesn't adjust for inflation which is how we would always do a calculation like this. if you adjust for calculation which you need to do to see the real value the dow is at a lower point than it was in '09 and in 2000 . so this is not great. so there's not quite the huge disparity between the actual economy and the dow that would be implied by the dow hitting a new high. it's lower than it was in 2000 and the actual economy, the labor market is 7.9% unemployment. so it has been a better time to be in the stock market than to say be unemployed, but it is not -- we are not on such a rip roaring good stock market run here that we should see the kind of gulf that i think is being implied in some of the commentary here.
>> ben , i'm sure at the white house they're elated over the market, but by the same token doesn't it undercutle arguments politically speaking that have been made by sequester. wall street big harumph to the reaction about the sequester.
>> they are happy about a stock price that is running but you're right. in terms of their arguments for the sequester and the impact they said it would have on the economy, it would have on people's lives, a dow at record highs is not very good for that intellectual argument. it doesn't feel to people like the sequester is really hitting very hard if the dow and other stocks are rocketing to new highs. ezra is absolutely right. we shouldn't be putting on our dow 36,000 hats anytime soon. we're not at inflation adjusted level of where we were in 2000 . remember, this is partly the result of $3 trillion in stimulus from the federal reserve pumped into the economy, into money markets which tends to drive people into stocks. it takes them out of loss risky assets. every time the feds do this we have a rocketing market.
>> it's been a jobless recovery thus far. where are the jobs is still the refrain that one could ask. capitalism is working for the corporations represented on the dow jones industrial average .
>> i think that's right. look, again, i don't want to go so far as to say jobless because we have created a couple million in the last couple years and unemployment has fallen from around 10% to around a little under 8%. but your broad point is right. we have not had a quick recovery and we've not had a sufficiently broadly shared recovery. the number i find striking here is there was new data that came out of berkeley the other -- couple weeks ago that the top 1% has enjoyed 121% of the income gains of the recovery. so you might wonder how can they get more than 100% of the gains? and the answer is that the bottom 99% has lost some income share during the recovery. so we're seeing three problems. one is slow growth . the other is growth that when we get it is not broadly shared and is not translating as quickly into job gains as we would like to see. there is a somewhat broken transmission mechanism in the economy and to the point about the stock market , while i don't think the dow as ben said we should be putting on our party hats, it's a case of corporate profits have been at near record highs and that's happening at the same time we're not seeing real job growth . there is a significant and sharp break between corporations and the people who are running the corporations and the average worker and that's worrying.
>> ezra , thank you for your time. ben , we appreciate you being here as well.
>>> coming up, it sure looks like jeb bush is thinking about running for president in 2016 and that could mean a clash of the titans . another bush versus clinton election. this is "hardball," the place for politics. 's impressive? a