Haiku Politics

The headline from a University of Michigan press release reads, "Consumer confidence stabilizes as gap widens between income groups".

Now here is the juicy bit from this article:

"Higher prices have driven a wedge between upper and lower income households that now extends well beyond their personal financial situation," according to Richard Curtin, the Director of the University of Michigan'’s Survey of Consumers. Comparing households in the lower one-third of the income distribution with those in the top third, the difference in the overall measure of consumer sentiment was larger than any time since the early 1980's. "Households in the bottom third of the income distribution held significantly more negative views about their own financial prospects as well as a more negative outlook for employment and economic growth," Curtin explained.

The gap between income groups is quite different than anything observed in the prior half century. In the past, the gap grew in size immediately following a recession, as upper income households were quicker to recognize and benefit from an improving economy. "The current situation is exactly the opposite as the gap is now due to lower income households voicing much less favorable economic expectations when the economy is closer to the expansion'’s peak," Curtin noted.

Thus we have yet another example of how our so-called "booming economy" is booming considerably more for some people than for others. The trend in modern American capitalism is for the rich to grow richer, and the poor to get poorer. Rising tides aren't lifting all boats; they are only lifting the luxury yachts, while the beaten up canoes are slowly filling with water and starting to sink. But you knew that, didn't you?

Posted by The Haikuist on Sunday, July 30, 2006 at 10:58 PM | Permalink