The recovery is real. It's strong. It's widespread. It's historic.
What, you haven't noticed?
The multinational-corporate and financial sectors are experiencing a comeback of gosh-wow proportions. Corporate profits captured nearly 90 percent of the growth in real national
income since growth returned in June 2009, an unprecedented share and nearly twice as dominant as the recovery 20 years ago.
The financial rebound has very little to do with the American worker, or the American consumer. Companies with strong overseas presences can siphon demand off frothy foreign economies, an excited commodities market, a new global middle class, and an elite swath of mega-rich consumers and investors who recovered their net wealth faster than families stuck in exurban homes in Phoenix. From the IMF's new survey of the economy:
Meanwhile your average domestic worker isn't quite enjoying the same rebound, says the IMF, which finds
"the current recovery has been held back by significant adverse feedback loops between housing, consumption, and employment." Weak housing hurts net worth, low net worth discourages spending, low spending holds down inflation and wages, and you're left with a lingering economic drought.
I'd like to think I'm above making a big sweeping political point here about class warfare and corporate interests ripping off the country, but ... I'm not above a small sweeping political point. When you look at these charts and contemplate the need for deficit reduction, the first question you'd want to answer is: Where should we schedule cuts? Should we concentrate them exclusively among government employees and middle class families who depend on government services, or should we also begin deficit reduction by finding reasonable ways to ask the richest Americans to pay more? The Washington mantra that tax hikes kill jobs, and spending cuts get government "off our back" are not 100% wrong, because taxes can discourage work and much government spending is wasteful. But it's sad that the debt deal in Washington will almost certainly entrench the two-speed recovery by ensuring that winning in the American economy means never having to pay more.