A Tale of Two Economies
Back in April I speculated that the economy might be turning around. When I wrote I was thinking in terms of the traditional metric, GDP, and so far as that goes it's starting to look as though I might have been right. But a smarter way to think about it would be in terms of two economies. One where there's more productivity, more profits, and the rich and the very rich get richer and start to spend money again. The other with everybody else, who aren't doing so good. See Simon Johnson's recent blog post for a very sensible take on this from an establishment economist who manages quite often to understand the news.
Another way of looking at our situation would be that the government is reinflating the bubble. In the bigger picture it's impossible to sustain a recovery without middle class and working class jobs. Can't be done. So I worry that if we're stuck limping along until the next crash — however it arrives — we may well find that it wipes out much of the remaining wealth beneath the top tiers. Arguably, just as it is intended to do. If, btw, you haven't seen the paper yet, you should really take a look at Emmanuel Saez's "Striking It Richer" (.pdf), which puts our income misdistribution in stark perspective.
And if you haven't seen the movie My Man Godfrey
Posted by George Kenney on August 22, 2009 11:33 AM 
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