Unemployment vs. the Stock Market -- A Tale of Two Americas

As we begin a new year there's a stark reality in our country. Right now, whether we like it or not, there are currently two Americas: let us call them "Unemployment America" and "Stock Market America" -- two different ways of looking at the same country. One America wakes up to jobless rates and says "too high." The other America looks to the stock market daily, if not hourly, for its take on economic reality. Sometimes the two Americas vote in tandem. But, right now, the stock market is bumping 12,000, while unemployment is just under 9.5 percent. Under President Obama, the two Americas seem to be going their separate ways.

In the 2008 elections, Unemployment America was uncertain, while Stock Market America unequivocally voted for Barack Obama. It has not always been this way. This gap has not always been there. During the Reagan Years, Stock Market America and Unemployment America voted the same way. Ronald Reagan understood that we were all in this together.

When Reagan was inaugurated as our country's 40th president in January 1981, the Dow Jones Industrial Average stood at 950. By August 12, 1982, the stock market had fallen to 776 and then the market -- and the economy -- began to recover. On Election Day 1982 the DJIA was above 1,000. Two years later, on Election Day 1984, the Dow hit 1,244. 

Work in America aka "jobs" made a similar recovery. Unemployment fell from a peak of 10.8 percent to 7.4 percent on Election Day 1984. The jobs market caught up with the stock market. It was morning in America because the recovery was shared by both Americas. Unemployment America and Stock Market America were each happy. Reagan won re-election in a 49 state landslide.

Which brings us to Obama, who is no Reagan. Obama appears to view Unemployment America in the same detached way that a scientist looks at a Petri dish -- an experiment that you do not want to touch. Obama doled out billions to Wall Street, but somehow forgot to bailout Main Street. Obama tapped former Harvard President Larry Summers to be his chief economic adviser, but never has seemed to find the time to listen to the average American. For Obama, talking to a professor is like breathing air. Having a beer with a policeman -- that is a media event.

A lot has changed since the Reagan Years. The White House now solely defines prosperity by how Stock Market America is doing.

Since Obama has taken office, the stock market has risen from under 7,950 to almost 12,000, a jump of over 50 percent. It is already morning in Stock Market America. Once again, the evening bar car on the Metro North commuter train between Grand Central Terminal in Manhattan and Greenwich, Connecticut is the place to be -- if you can afford it.

In Unemployment America, it is a different story. When Obama was sworn in in January 2009, unemployment was at 7.8 percent. Two years and a $1.5 trillion deficit later, joblessness is stuck at 9.4 percent. Unemployment America did not want mandatory health insurance. It wanted work. The president said that he knew better.

The competing stories told by the stock market ticker and the unemployment numbers will shape the outcome of the 2012 election. If, on November 6, 2012, the divide between Stock Market America and Unemployment America remains as sharp as it is today, Election Night 2012 will be one to remember. And not in a good way.

Lloyd Green was an appointee in the Department of Justice during President George H.W.Bush's administration. He was one of the "excellent nerds" of the 1988 Bush Campaign's Research Department.

Lloyd Green was staff secretary to the George H.W. Bush campaign’s Middle East Policy Group in 1988 and served in the Department of Justice between 1990 and 1992.