Tech Ticker's Aaron Task and Henry Blodget interviewed investment consultant Gary Shilling yesterday. Shilling's thesis will not strike readers of DOTE as controversial: the rich are doing just fine—thank you very much!—but the rest of us poor schmucks have been left holding the bag.
Henry points out America's enormous wealth & income inequality, which is (at least) as bad as it was in the late 1920s before the stock market crash and the Great Depression. He then asks Shilling how does this get resolved? In other words, how do we acheive a more equitable distribution of the income which would make America's once great Middle Class viable again. Shilling can't foresee any socioeconomic shift which might bring that about.
This blog is not called Decline of The Empire for nothing. When I explained why American has two economies in The "Economy" — America's Great Lie, I was describing a permanent condition. It's not as if we've had a "recovery" in which wealthy investors in the markets thrive while everyone else languishes. It's not as if we're waiting for the "recovery" to catch up to the rest of us. That's just some trickle-down economics nonsense. In short, that story is propaganda.
Two tiers are built right into the socioeconomic structure of this society. Look at the graph below. What do you see? Do you see
- a slow, painful economic recovery?
Or do you see
- a new socioeconomic reality?
Chart from Mike Shedlock, who says "according to the BLS, non-farm employment is lower than it was 11 years ago!" That big bump up in employment during the aughts was almost entirely due to the Housing Bubble.
The people running this country want you to believe Story #1—the slow, painful recovery will eventually lead to prosperity for all. In fact, it's likely you want to believe this story. But that's utter nonsense—you should know better at this point. America has a large and growing underclass, and if you're not in the top decile (10%) of wage earners, you're in it. Even if you're actually working full-time, it's still a struggle to keep your head above water. This is a permanent feature of the American landscape.
Don't wait for things to improve, or improve much. As I said, this is as good as it gets. If this society creates more lousy part-time service jobs and the unemployment rate goes down, has anything really changed? Bear this in mind every time somebody tells you unemployment claims went down in the previous week.
Here's the Tech Ticker video.
I didn't watch the video, but population has increased a lot since the start of the bubble, and it seems it took the bubble to keep the percentage of eligible worker participation (as well as unemployment rate) at acceptable levels. The real issue now is the <50% level of full-time employment in the total working age demographic, which you've noted here in the past.
As Howard Beale said in your du jour video yesterday, "First you've got to get mad!"
Posted by: Bill | 03/24/2011 at 07:33 PM