New hiring in January was a disappointment; not enough to pull mortgage rates down from 5.75 percent, but enough to buy another month of Fed patience.

Today’s report was, if anything, more disappointing than the news of a net gain of 125,000 jobs, barely half the hopeful forecasts. The key number: wages in January grew by only .1 percent.

The economy is moving forward at a 4 percent annual clip, layoffs are down (though may be stabilizing near 350,000 each week), and people are getting hired, but in low-wage jobs. Huge gains in productivity are at the expense of labor, not yet to its benefit. The longer this pattern persists, the more sensible it is to accept it as a normal aspect of a changed economy. A cheap Fed, a half-trillion dollars in deficit spending, and we have the Slimfast economy, not a sustainable diet.

Most in-the-trenches financial people (traders especially) hold all politicians in contempt, and see little cause-and-effect between election outcomes and real-world events on their screens. Econo-politico performers like Kudlow would have you believe that every wobble and burp in the stock market is the result of political machinations. Good entertainment, silly market economics.

Most presidents are the prisoners or beneficiaries of economic forces beyond their control. Bill Clinton, the Great Budget Balancer, gets credit for spending limits, but his budget balance and fleeting surplus were the result of a tax revenue windfall that evaporated when the stock bubble blew.

It is now all but certain that on the first Tuesday of November we will choose between Herman Munster and All Hat No Cattle.

Does the winner matter to the markets? The lucky man will get the title and the booby prize, a financial situation without American parallel. (There have been similar situations elsewhere and elsewhen, but you don’t want to know about them.)

Everybody knows that the Federal deficit is out of control again. Out of control like a mallard on pond ice: the newest “budget” reveals a $140-billion spending under-estimate in a Medicare bill not six months old. Everybody knows that Congress has abandoned Clinton-era spending controls. Everybody knows that we don’t know how to pay for the commitment to an immense increase in future benefit spending.

Not everybody knows that this “budget” does not include expenses for military operations in Afghanistan and Iraq beyond this year. The Deputy Minister for Missing Cattle: “We left that out because we don’t know how long we will have troops there.”

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