0 government money. >> understood. ezra, why aren't those companies doing well on wall street hiring more folks? >> we talked about this sometimes. it's almost an issue of patriotism. to them it's a cost benefit analysis. they don't see they will get a profit back because they don't see enough profitable opportunities. this is something that i think we actually should worry about. you are seeing -- while i don't think the dow's numbers are a great example of it, we are seeing it detaching the corporations and the very wealthy from sort of the average working american. in the last couple of years, the top 1% has gotten 121% of the income gains. the reason they can get that is the bottom 99% lost a bit of money. meanwhile, as ben mentioned, profits are up. they're near record levels as a percentage of gdp. in a bad economy for workers, you are seeing a good economy for people at the top. and that distance between how they can be doing and both what they need in terms of labor and also how much their profits are shareholder, that should worry us. >> and ben, there are ripple effects from this. folks who have 401(k)s but of course if you're unemployed, you don't have a 401(k). >> it's not broadly shared. and part of the reason that corporate profits are as high as they are is the companies don't see the need to increase wages at all. because there is so much slack in the labor market because people are unemployed and don't have the skills to take on these jobs. so companies can squeeze more productivity out of their existing workforce. and as they hire people as they're reluctant to do, when they do hire them, they don't feel the next far high wage. that's what's driving profits. >> despite your buzz kill, you have written about making an argument that there are good things going on. you can point to some indicators that suggest that a recovery is underway. unfortunately, household income is not on that list. it still lags far behind where it needs to be. >> yeah. look, there are a lot of things that are happening in the american economy. i would call them longer term. they're positive right now. health care costs have been very, very low. they're beyond what the recession can explain. obviously china's not doing that badly. europe is getting back on its feet. we are seeing some good movement in the housing market. and if the housing market does recover in a big way, that makes all this federal reserve policy suddenly activate to begin driving a real recovery. the absence of housing as a driver. the big thing standing in front of it is still congress, still washington. one place i'll disagree with ben, it's true for the moment we're not seeing massive lines in the street for the sequester or worries in the market. it is still likely goldman sachs will knock about a half point off gdp growth this year. that could be enough to put us in a recession. if we could get washington out of the way if it would stop pushing policy in a weak economy, we could have a much quicker economy than we're having now. >> on the issue of income and recovery despairty. "the new york times" illustrated the story about the city of detroit. the paper noted around the country as businesses have recovered, the public sector has in many cases struggled and shrunk. detroit may be the example of a dual fate. public and private diverging at times it has been awkward even tense as investors contemplated opening coffee bean roasters, urban gardening suppliers and fish farms. and even a dearth of toilet paper. that's that whole wage and income disparity that gets brought to the forefront. >> when you have the federal government cutting back on aid to the states, money sent to places like michigan and detroit. you're going to have the public sector doing worse than the private sector 37 but we have some austerity at the federal level. we've got money coming out of localities, layoffs and localities that makes economic growth harder. that's why most would say they don't want this sequester right now. talk to us about long-term entitlement reform. but this will hit areas like detroit. you'll see the disparity of how corporations are doing and how municipalities are doing. >> what's the indicator you would look to? tell me when this quantitative value has changed, that's when we'll know we're ahead of the curve. >> i think just to continue to look at housing prices. in terms of what's really going to drive a broader recovery. you're getting people feel wealthier, they'll spend more. it drives fed policies more effective if people can actually get these mortgages at low rates, see prices going up. people more willing to sell the houses they have. i think that's the critical piece of this economic recovery. it started a little bit but from a low base. >> ezra what do you most want to see turn that you'll feel we're ahead of the curve? >> unemployment. i know it sounds trite to say it at this point and i agree with ben in terms of housing being a leading indicator. but i will feel better about the economy when we are back down to 6.5% unemployment. that's when you'll see other positive cycles in the economy where corporations start bidding up wages. unemployment is the core still of a lot of major problems. >> to what extent are their psychological factors that are out there that are holding us back. people that could impact change but people looking at washington saying if they can't get their act together, there's no way i'm hiring or expanding? >> it is very difficult to find evidence that that kind of policy is what's holding us back. it can't be helping. in a broader way, the feeling that the economy is not quite recovering, that puts a bad thought on. people would say why should i hire when washington gets us into a problem with the sequester. >> thank you very much. coming up, it sure looks like jeb bush is thinking of running for president in 2016. that could mean a clash of the titans. another bush versus clinton election. this is "hardball," the place for politics. hey! did you know that honey nut cheerios has oats that can help lower cholesterol? and it tastes good? sure does! ♪ wow. 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