PROSPERITY FOR THE FEW
Why a booming economy feels flat

From the Christian Science Monitor courtesy of AlterNet:

Despite continued strong economic growth, this expansion is clouded with enough complications and uncertainties that, for many, it doesn't feel like good times.

The reason? A boom in corporate profits has not yet created a job market that makes workers feel secure, economists say. Hiring hasn't skyrocketed. Worse, wages are stagnant. This paycheck squeeze may prove more worrisome than soaring oil prices and concerns over a housing bubble. Some experts worry that wage stagnation may prove more permanent this time, because of an increasingly global market for labor.

And

Second, wage growth has been lackluster, despite strong gains in worker productivity.

Normally, as employees are able to produce more in each hour of work, the result is greater cash flow that can be divvied up between workers and owners or investors. In the long run, rising productivity means rising wages and living standards.

But in the short run, "most of the gains in the economy have gone into profits rather than wages," says Mr. Behravesh.

Click here for the rest.

This is bad news for most Americans, but it's good news for most business owners. Why? Stagnant wages mean lower operating costs, which is good for the bottom line, and that's the reason this news is so disturbing. Generally, as the article observes, a higher gross domestic product, that is, more economic activity, translates into higher wages as businesses expand, competing with other businesses to attract more employees, in order to take advantage of good economic times. That's been true enough throughout the 20th century. However, business would greatly prefer to have the best of both worlds, a better economy without having to pay higher wages: it now appears that they've found their holy grail. The weakness of labor as a political force combined with heavy "outsourcing" of both white and blue collar jobs to third world countries has created a situation where business can have its cake and eat it, too. Consequently, the economy has recovered, but only if you're already wealthy. If you're not with the "in crowd," you're still pretty nervous.

The long and short of this is that the conventional wisdom that a rising tide raises all the boats is no longer operative, and it may very well be structural, that is, permanent. Business wants this situation because it's good for business, and has been working diligently for decades to create it. Now that they've got it, they're not likely to give it up easily; with most of Congress in their pockets, it's even less likely. Unfortunately, while good for American business, it's obviously not good for most American citizens, and stands to get worse. As I've said before, what's good for Wall Street is not good for Main Street. The sooner that idea makes it into mainstream discourse, the better.

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$