The real problem with the American economy and the reason it's heading nowhere is that the rich are getting richer and ordinary people are getting screwed.
A fascinating report from the Center for Labor Market Studies at Northeastern University in Boston reveals that the so-called economic recovery in the United States has been skewed in favor of corporate profits and against increased wages for workers. In other words, companies are making enormous profits, their share prices are going through the roof making executives on options very rich but ordinary people get nothing.
The study reveals that between the second quarter of 2009 and the fourth quarter of 2010, corporate profits went up $464 billion but wages only rose $7 billion or by 0.1%. Indeed, corporate profits accounted for 88% of US national income, the highest proportion out of any of the recoveries over the last three decades.
And that is why the US economy is totally screwed. Wealth has increasingly concentrated to the upper class at the expense of the middle class. But it's always been the middle class that drives the national economy. If that group is damaged, there is no recovery. That's why the US is heading downhill.
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