Is a split America the result of the Great Recession? Robert Reich thinks so, and has been arguing this for a while. Income divergence has been growing, but the 2008 crash cracked it wide open.
This week’s unemployment data, which sounds good (rate down from 9.6% to 9%), is actually just further confirmation of this schism, for Reich. Like so:
We have two economies. The first is in recovery. The second remains in a continuous depression.
The first is a professional, college-educated, high-wage economy centered in New York and Washington, that’s living well off of global corporate profits. Corporations continue to make money by selling abroad from their foreign operations while cutting costs (especially labor) here at home. Wall Street is making money by taking the Fed’s free money and speculating with it. The richest 10 percent of Americans, holding 90 percent of all financial assets, are riding the wave. And their upscale spending has given high-end retailers and producers a bounce.
The second is most of the rest of America, and it’s still struggling with a mountain of debt, declining home prices, and job losses. In coming months most Americans will also be contending with sharply rising prices of food and fuel.
Is this true? If so, does the current American political party structure map onto this divide usefully?