Building a Bridge to the 19th Century

[midwayer]

A timely economic / political article that discusses separation of wealth , inflation vs deflation in our most recent political climate:


With the U.S. economy expanding and the labor market improving, it isn't clear how well the Democrats' message of a divided America will resonate with voters this fall. But many economists believe the economic recovery has indeed taken two tracks...

Upper-income families, who pay the most in taxes and reaped the largest gains from the tax cuts President Bush championed, drove a surge of consumer spending a year ago that helped to rev up the recovery. Wealthier households also have been big beneficiaries of the stronger stock market, higher corporate profits, bigger dividend payments and the boom in housing.

Lower and middle-income households have benefited from some of these trends, but not nearly as much. For them paychecks and day-to-day living expenses have a much bigger effect. Many have been squeezed, with wages under pressure and with gasoline and food prices higher. The resulting two-tier recovery is showing up in vivid detail in the way Americans are spending their money.

http://billmon.org/archives/001604.html

[Strawman]

1. Great article

I think Billmon gets it entirely right, and I think voters are justifiably skeptical that anyone can do all that much to make the economy better for them by raising their wages or generating new good paying jobs.

This passage is excellent:

"Even if he wins, I doubt Kerry will be so fortunate. The New Deal, unlike the old one, can't be recreated - not without a crisis, the kind that would do more harm than good. But managing the restored Old Deal may not be possible with the policy tools at hand. And building a newer deal, one that reconciles the benefits of globalization with the social problems it creates, doesn't seem to be on Kerry's agenda, or anybody else's.

"Maybe it's just a bridge too far."

That's the unvarnished truth. Not much good for the campaign trail, where being "optimistic" is a greater virtue than being honest.

[cprise]

2. Oh well, time to move