There's the Wall Street Economy, run by people who still make huge amounts of money skimming the take in the deregulated casino they've built at the core of our economic system. (Wall Street, where the average salary is $392,000, is hiring!) Then there's the Jobs Economy, where the rest of us live, where state and local governments are still laying off teachers and closing fire stations.
Welcome to the Recovery, says Timothy F. Geithner, Secretary of the Treasury. The recession is over because his economy -- the Wall Street Economy -- is doing fine, because "financial engineers" are still building ever faster and more convoluted ways to hide the smoke inside their "financial instruments" and rationalize their huge bonuses. (Paul Volcker vs. "financial innovation.")
What about the Jobs Economy? "The point is that a large part of Congress — large enough to block any action on jobs — cares a lot about taxes on the richest 1 percent of the population, but very little about the plight of Americans who can’t find work." - Defining Prosperity Down, by Paul Krugman.
Krugman is worried that people like Geithner have accehttp://www.youtube.com/watch?v=5uBmCW9lZ_0pted high unemployment as "structural," as a fact that can't be changed. And from what Geithner and others are saying, Krugman's fears are justified.
The illustration above is my take* on how income distribution has changed in favor of the filthy rich, aided by the GOP and its accomplices.
On top is the Ideal distribution, with wealth spread across the middle class, and relative few poor and rich.
Then in the middle, the middle-class was gouged out by Open Pit Mining, as manufacturing and capital went global while labor stayed local, and Reagan and the GOP convinced everyone that deregulation and lower taxes for rich people would cause their wealth to overflow and "trickle down" on the rest of us. (Wealthy Reduce Buying in a Blow to the Recovery.)
Of course trickle-down does not lift all boats; it makes people already too rich richer and drowns everyone else, so we've wound up with the world at the bottom of the illustration, where -- thanks to technology that connects the islands, and helps outsource any work not nailed to the ground -- First-World Islands for the rich stick up out of a sea of increasing misery for the multitudes.
* Graph is built to get the point across, not on actual data, though I'm sure plenty of poor people have been kicked off islands, and a few million middle-class mortgages are "under water."
