The wageless recovery

[eridani]

http://www.readersupportednews.org/opinion2/279-82/5754-the-wageless-recovery

Much of Wall Street thinks inflation is now the biggest threat to the US economy. As has been the case in the past, the Street is dead wrong. The biggest threat is falling into another recession.

The most significant economic news from the first quarter of 2011 is the decline in real wages. That's unusual in a recovery, to say the least. But it's easily explained this time around. In order to keep the jobs they have, millions of Americans are accepting shrinking paychecks. If they've been fired, the only way they can land a new job is to accept even smaller ones.

The wage squeeze is putting most households in a double bind. Before the recession, they'd been able to pay the bills because they had two paychecks. Now, they're likely to have one-and-a half, or just one, and it's shrinking.

Add to this the continuing decline in the value of the biggest asset most people own - their homes - and what do you get? Consumers who won't and can't buy enough to keep the economy going. That spells recession.

Why doesn't Wall Street get it? For one thing, because lenders always worry more about inflation than borrowers - and, in general, the wealthier members of a society tend to lend their money to people who are poorer than they are.

[fasttense]

1. Yeah, we bailed out the banksters and let their victims suck it up.

It's a tickle down recovery of criminals that hasn't, and never will, trickle down on the rest of us.

[kentuck]

2. There is no threat of inflation from the working people of this country...

Because they have no money to inflate the economy. Naturally, the people with all the money worry about inflation.

[hobbit709]

3. That sums it up in a nutshell.

[midnight]

4. In order for capitalism to work people need capital...

Max Keiser says it better than this, but essential this is what he said a few weeks back in one of his interviews... He goes onto say people need bigger salaries and not smaller ones...