Search This Blog

Friday, April 27

Which One's Yours?

As the Dow Jones Industrial Average sets new records every day, economic growth slows to its lowest rate in years, the dollar drops against other currencies, and the housing market is in a serious slump. Seems a bit of a disconnect unless you see it as two different economies.

My sense is if you make a half a million a year or more, you're feeling pretty good about how things are going. You're benefitting from higher worker productivity and lower costs for the companies you hold stock in, and your portfolio's soaring. So you're able to shop at Neiman-Marcus and Tiffany's. We depend on you to keep those consumer spending numbers high. You haven't noticed that eggs are more precious than hens teeth, and that onions now top a dollar a pound. You don't lay awake at night wondering how you're going to afford to send your kids to college. Even if Junior is a delinquent and flunking out of his third private high school, you know you'll find a college somewhere that'll take him, because you can afford the full load of tuition and room and board.

On the other hand, the rest of you aren't so happy. You're the worker being squeezed to support that growth in corporate productivity, so you're being worked harder and longer for the same pay (if you're lucky). And, what with groceries and gas going through the roof, and the value of your house declining, you're probably losing ground in your long term financial planning. You've been priced out of the market of sending your kids to a private college unless you hand over the keys to your house and the account number of your 401(k). So you stay on top of your kids to make sure they can compete academically and get admitted to a good public university. You shop at Marshalls or TJ Maxx, and yes, those hackers have your credit card number. Let's not even talk about how much you're spending on health care. We used to call you middle class.

Which represents your economy and why?

No comments: