Key Thing Is Comfort The Comfortable

God help us, there’s a chance the unemployment rate will ultimately fall below 5 percent.

Can you imagine worse news? The abject fear that this has engendered was captured in the lead story in The Washington Post on Wednesday. You could almost hear the knees of financial analysts knocking as you read that the Federal Reserve will probably have to raise interest rates again next month if this rampaging monster of an economy doesn’t hurry up and slow down.

The Post story said: “The surge in growth, which began late last year and surprised both Fed officials and private forecasters by continuing undiminished into this year, is strong enough that it could soon drive the nation’s jobless rate below 5 percent for the first time in nearly a quarter century, the analysts warned.”

This news comes as a warning. It’s as if the nation were faced with the threat of a cure for cancer. Be on the alert: Prosperity for the jobless is just around the corner. We have no choice but to confront it, turn it around and chase it out of the neighborhood altogether. In short, we have to get the unemployment rate up.

Inflation is the bogeyman. No one has seen it in several years, but the mere thought that at any moment it might spring back to life - the financial markets’ very own Freddy Krueger - is enough to keep the well-heeled on constant edge.

“Not only do we have to stop inflation when it happens, but the Greenspan position is that we have to anticipate it and stop it before it starts,” said Robert Borosage, co-director of the Campaign for America’s Future, a progressive advocacy group.

Whatever motives are driving Alan Greenspan, the chairman of the Federal Reserve Board, the result is a brutal Catch-22 for the nation’s working classes. The route to a brighter future for most men and women - raises for those already working, and increased employment opportunities for those who want to work - is economic growth. There is a consensus on the left and the right that growth is the answer to the persistent and potentially dangerous problem of economic inequality. The top 20 percent of Americans get nearly half of all the income. Fifty percent of American families have less than a thousand dollars in financial assets.

For a majority of Americans to do better, an expanding economy is essential. And yet, whenever there is evidence of anything beyond an anemic rate of growth, the policy is to step in and ruthlessly head it off. The effect is to slam the workplace door on millions of men and women in the bottom half, and especially the bottom fifth of the socioeconomic scale.

For those who think the so-called experts are doing anything other than flailing about in a theoretical thicket, consider their track record. These nattering nabobs of Nairu (the acronym for the nonaccelerating inflation rate of unemployment) have for the longest time been trying to pinpoint the lowest level of unemployment the economy can sustain without triggering an acceleration of inflation. In other words, without raising Freddy from the dead.

For a while it was thought that the official unemployment rate had to remain above 6 percent to keep inflation still. But the jobless rate came down, broke the 6 percent barrier and nothing happened. The theory had to be adjusted. Perhaps 5.8 percent was the magic figure. Wrong. Unemployment fell through that barrier without a peep from inflation. Well, maybe 5.5, or 5.3, or 5.2.

There is still no evidence of accelerating inflation. But there is plenty of evidence that an awful lot of people are in need of jobs and can’t get them. The Roosevelt Hotel placed ads in local newspapers last month seeking applicants for 700 positions. More than 4,000 men and women showed up. The line of eager and hopeful applicants stretched for many blocks.

And already there is evidence that the working poor are being forced into a cruel head-to-head competition with welfare recipients for precious low-wage jobs. Eventually, more than four million welfare recipients will be sent into the job market.

The policy makers are masters of obscurity on the crucial issue of employment. For those at the bottom who are desperate for work, an honest look at current economic policies is a glimpse into the abyss.