When a country has a population in excess of 300 million people, there will obviously be varying levels of prosperity and poverty. But what was reported today is further reinforcement of the ever-increasing gap between the haves and have-nots.
First, mainstream America simply doesn’t feel the economy is rebounding. They see a lack of job security, illustrated by the lowest labor force participation rate, at just 63%, in over twenty-five years. Those employed see stagnant wages. They see health insurance in a state of flux, not knowing if it’s for the better of for the worse. Those unemployed and uninsured see a new bill they’re going to have to pay. For those barely above the poverty line, they fear defunding of food stamps. The best news for mainstream America, and therefore all of the country, are for those that are homeowners. Houses with increasing equity set off a virtuous cycle of confidence, mobility and wealth to spend, which further fuels the economy. But this lone strength isn’t enough to remove the deeply-rooted fear in many that the economy simply isn’t any good.
But it’s a completely different story for the haves, which I’ll describe as millionaires. And in this day and age of low inflation, a million is still a million, unless you’re a banker. This group own their own homes, if not other properties as well. They likely have excellent, non-threatened health insurance. They also have the cash to invest in the stock market. In this scenario their net worth has skyrocketed since the financial meltdown. What’s not to like?