Words and numbers

Wall Street is irrationally optimistic, almost all the time. The only time it is otherwise is when it panics. I suppose optimism is required in a business where continuous growth of assets and earnings is required for the large majority to earn a living (and I'm told that majority truly despises the few who make a living by selling short). Clearly, someone of my melancholic disposition would not be a good fit at all.

The official unemployment figure dipped from 5.1% to 5.0% and Wall Street is ecstatic. Nobody seems to care that the "drop" in unemployment seems to have been caused by employers reducing the number of their full-time workers and hiring more part-timers, and that the percentage of those working part-time who want full-time jobs is higher than it's been since the Nixon Administration. Add those unhappy part-timers to the regular unemployed and the "discouraged" workers, who would work if they could find jobs but no longer are actively looking, and the real unemployment rate is about 12%.

Wall Street also was thrilled to learn that production continued to grow in April, albeit by a tiny fraction of a percent. Nobody seemed to find anything amiss when growing inventories of unsold products also were reported. Clearly, producers are reluctant to lay off their skilled, trained workers -- even as their sales drop. That's why employment figures lag behind the rest of the economy. When the workers finally are laid off, they'll stay laid off until the unsold products eventually are sold.

Don't even get me started on inflation. Whoever decided not to count food and energy when measuring inflation -- supposedly because their prices are "too volatile" -- couldn't have done it for any reason other than to cook the books. Count food and energy into current inflation figures, and inflation is more like 11%.

12% unemployment plus 11% inflation equals stagflation, the way I see it. It's too late to worry about it's arrival, because it's already here.

In the meanwhile, the presidential candidates are debating a two-month suspension of the gasoline tax. Great. The only really effective way to bring down gasoline and food prices is to restore the value of the dollar, and that won't happen while we're borrowing ourselves into a deeper and deeper hole.

For most Americans, economic growth stopped paying off when the current Administration came to power -- and anyway, growth isn't real unless it's paid for. Just ask the people whose homes are being foreclosed, who can 't continue in college for want of affordable loans, and who are paying big chunks of their monthly incomes in credit card interest and fees.

Growth has had its chance but, both fiscally and environmentally, Americans can't afford much more right now. Instead of growing more wealth for the few, it's time to start redistributing that wealth among the many. If poor and middle-class people get a chance to start spending some of the wealth the rich have locked up in speculative "investments" -- like commodities futures -- inflation will come down, employment will go up, and America will get back on track.

Wall Street might have to panic a bit in the process, but whatever happens, those eternal optimists eventually will see the silver lining.