Superbubble?

While the cigar smoke is still in the air, another idle observation. I haven’t seen this one anywhere else. It is that, quite possibly, the Consumption Culture on which our economy appears so much to hang may itself be a bubble. Call it a superbubble. In the 2008-2009 period we lost 8.7 million jobs. In 2010-2011 we have thus far recovered 1.8 million, leaving a deficit of 6.9 million. We haven’t needed those jobs. Maybe that means that we—don’t. It might mean that our economy needs fewer jobs if demand (which is consumption) shrinks. What if we’ve been living inside a vast and artificially hyped bubble of consumption? It’s a bubble if we don’t need it but still buy it. What if the mortgage crisis woke people up and the bubble isn’t there any more? That would still leave not only those 6.9 million still unemployed but also deprive new entrants to the labor force employment that they seek. Social stability demands appropriate levels of employment. If private demand isn’t there any more—because the consumption bubble has been punctured—we need public demand. And we need it precisely at a time when the political mood is to disassemble the public sector. I’d better stub out that cigar.