I
wish someone would re-examine some of conventional wisdom about the economy in
light of seemingly contradictory facts.
While the economy is improving statistically, people, we are told, don't feel
that things have gotten better.
We
are told that median income has been flat or falling. Therefore the
middle class has not benefited from the recovery, and that's why Obama hasn't
gotten credit for the robust improvements during his tenure.
I
don't buy it. The latest University of Michigan survey of consumer confidence
shows consumer confidence to be exceptionally strong, highest in seven years..
I
think the problem arises from the media and politicians, from both parties,
focusing on the median income and income inequality too much, and not focusing
on the how much the economy has improved.
The
fact that the Dow is up 10,000 points since Obama took office ( remember 65% of
American are in the market); unemployment is down from over 10% to under 6%;
over five million new jobs have been created; GDP growth has been solid (
especially from a global perspective) and housing is recovering--- ought
to count for something! And don't forget inflation has been pretty tame.
As
I have written several times before, the problem is not between the 1% and the
99%, but rather between the "haves" and the" have nots".
That's a real problem as well, but it's a different one, and explains why the
economy is growing and things are improving, while the median income has not
grown.
As
I've also written , while it's true that the middle class is shrinking, it's
shrinking in two directions. Almost half of those who have left
the middle class have gone up ; while the other half have gone down. If many go
up and an equal number go down, the median stays the same. This would
mean that there are more people with more income who are doing spending
and growing the economy, even though others have less.
The
1% couldn't have done all that purchasing all by themselves. But an
increasing group of "haves' could. Note also that consumer debt has
continued to go down, so more debt doesn't explain the increase in spending.
Think
about it. Who's buying all those cars ( especially GMs and Fords).
Who's going to all those malls and restaurants. The 1% don't shop at Wall Mart,
or even Macy's, or eat at Applebee's or Chipolte. The growing class of
"haves" do and they are not borrowing to do so. Who's going to all
those sporting events? The 1% are in the skyboxes!
My
guess is the growing group of "haves" are reluctant to tell people
they are doing well , so they have joined the chorus that things are better
only for the rich.
Why
am I so hung up on this? It's makes a big difference in the attitudes of people
in this country, and politically it's killing the Democrats.
Of
course the Democrats are partly to blame themselves because they keep on
refusing to acknowledge that the economy is better. They'd rather focus on the
negative aspects of the recovery, to their detriment. Perhaps it's because they are often
just so anti-business that they rarely like to concede improvements have
occurred, unless the government did it.
I
get where the GOP is coming from ( they want to win), but not the
Democrats.
Let's
just recognize that many people are much better off today, not just the 1%, and
work to improve things for those who have fallen behind .
Remember Democrats
"don't let the perfect be the enemy of the good".
Eric
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