The Car and The Television against the Wave and the Wire. | TPMCafe: "This 'boom that feels like a bust' effect is what is driving unhappiness. Both from the people who didn't support it, and from the people who did, thinking they would do very well in a low tax, high deficit spending environment.
"The reality of an overheated economy, however, is that all of the increased demand is soaked up by higher prices and profits from lower production. Labor gets most of its benefits at the end of the economic cycle. However, with a huge fraction of the increased GDP going to profits, they are farther behind, and have had real wages drop, farther into this economic cycle than in any since the Second World War.
"While it is possible that the current expansion could run for a while longer, it is very unlikely that 90% of Americans will catch up to where they would have been had this cycle been handled differently. Macroëconomically - in terms of aggregate demand and aggregate supply, the economy is chugging along. . . . Given current trade flows, the US should have seen aggregate deflation. The difference between deflation and the inflation we have seen has come out of wages, including wages deferred until retirement.
"The American people have, repeatedly, voted for this. To change direction means not merely shuffling the party balance, but the balance of ideas that dominate American life. We are the future that the past sent the bill to. It is only now becoming clear that there is no future to foward it to."