There Really Are Two Americas, And Only One of Them Has Achieved Escape Velocity
by Tom Keene, Bloomberg “John Kerry and I believe that we shouldn’t have two different economies in America: one for people who are set for life, they know their kids and their grand-kids are going to be just fine; and then one for most Americans, people who live paycheck to paycheck…” That was of course John Edwards speaking to the Democratic National Convention, July 28, 2004. Just to get your attention, median inflation-adjusted household income is down 5.3% in the past 8 years. One America has enjoyed migrating from $54,674 to $51,939. A simple “Two Americas” income analysis is brutal and increasingly brutal: College, $45,400; High School, $25,900. Emmanuel Saez, of Berkeley, suggests that in four years 2009 to 2012, across 39 states, the “top 1%” captured 95% of Total Income Growth. (Whatever that is. I presume it includes investment capital-gains taken. The “top 1%” never takes a capital-loss.) The chart signals the value of education as the collegiate crew has returned to near the cyclical pre-crisis flow. The work-at-18 team has not. Here is a killer update on our young employed. The Economic Policy Institute writes squirm-worthy economics for those older, educated and richer. This was a great jobs report. Even with that, we received mixed messages including one Bill Gross defending the caution of Christine Lagarde. Part of that deserved caution is about how one America has reached escape velocity and another is stuck on the ground. Madame Lagarde has asked Chair Yellen to keep the punch bowl filled to the brim. Countless disagree with the IMF when looking at a nice part of the nation. Maybe, Lagarde and Gross are looking at a less nice all-in America, a Union first described by John Edwards.