Greenspan On Board With “Two Economies”
I’ve been saying for about a year now that the recovery in this country is not a full, robust recovery (if a recovery at all). The economy has basically been split into two economies: 1) the Wall St. and big corporation economy and 2) main street, small business, real economy. The former economy is thriving with cheap money and government stimuli while the latter economy continues to die.
In a recent speech, Greenspan is calilng the U.S. recovery unbalanced. According to the article:
Former Federal Reserve Chairman Alan Greenspan said on Tuesday the U.S. economic recovery was “extremely unbalanced,” driven largely by high-income people benefiting from recovering financial markets and large corporations.
This trend will continue. The only way the trend breaks in my opinion is if the beneficiaries of the current policies somehow take a hit from a withdrawel of stimulus and/or an increase in debt losses. Or, other words, until there is another leg down in the broad economy. The alternative would be if the struggling real economy rebounded to catch up to the large business / Wall St. firms. I don’t see that happening.