The Real Economy vs. The Wall Street Economy:
Almost five years after the near-total collapse of the global economy, the stock market has once again reached new highs. The rich are, without a doubt, getting richer. So have we actually recovered from the Great Recession? No, not at all.
A new quarterly report from UCLA economists finds the current recovery is proceeding at a much slower pace than earlier recoveries. So things are improving from the absolute bottom, yes, but it's hardly reason for celebration. "It's not a recovery," writes economist Edward Leamer. "It's not even normal growth. It's bad."
Some things, of course, have recovered just fine: stock prices, the earning power of the very rich, the hubris of Wall Street. Heck, investment banks are even back to selling the same type of synthetic CDOs that precipitated the last financial crisis. For the rich, and for those whose wealth flows from Wall Street one way or another, times are good.
Other things have not recovered. The unemployment rate, which was well under 5% in late 2007, now sits stubbornly at 7.5%. Average home prices are still about a quarter less than their (inflated) pre-recession high. The income of most people has not recovered. Since only half of Americans own any stocks at all, soaring stock prices are of little benefit to the general public unless companies are creating jobs, rather than sitting on tons of cash.