We are in the last throes of the Reagan era and the end result is an 80/20 economy where 20% of the country have so much money they can carry the entire economy on the backs and the numbers still look healthy. 20% is still 68 million people – a population the size of France. That is plenty of wealth to invest, make deals, build data centers, buy automobiles, and keep the economy moving.
How is the other 80% doing?
* Enjoying 7 year car loans at 11% interest
* Subprime auto delinquencies are rising
* Inflation continues to rise
* Food insecurity is rising
* Housing remains unaffordable
* Foreclosures are rising
* Homelessness continues to rise
* Somewhere between 30-50% are living paycheck to paycheck (depending on the source)
* Thrift stores have exploded in popularity the last ten years
* Folks are using “buy now pay later” on groceries and fast food
* Credit card delinquencies are rising
* Risky mortgage products are rising in popularity again
To make things worse, corporate America has realized that they don’t really even need that 80% to remain profitable. So they are increasingly marketing to that 20%. Being a sports fan now requires three different streaming services. A trip to Disney is almost impossible for a working class family and if they do go their experience is FAR less enjoyable than the catered experience of a wealthy family. Concerts, retail, dining, transportation – all catering to the wealthy while the other 80% are priced out of more and more things that used to be the ‘privilege’ of working hard in America.
FuguSandwich on
The phrase “K-shaped” has gotten so overused as to have become meaningless. It’s no longer about certain industries (or geographic regions or demographics) doing well and others doing poorly. What these articles are really getting at, but don’t come out and say explicitly, is that if most of your income and wealth come from the stock market and or real estate then you probably have a positive outlook but if it comes from employment (including high income professional work) or running an actual small business then not so much. And obviously that can all change in an instant – a stock market crash would quickly cause the top part of the K to break off and suddenly everyone would have a negative outlook.
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We are in the last throes of the Reagan era and the end result is an 80/20 economy where 20% of the country have so much money they can carry the entire economy on the backs and the numbers still look healthy. 20% is still 68 million people – a population the size of France. That is plenty of wealth to invest, make deals, build data centers, buy automobiles, and keep the economy moving.
How is the other 80% doing?
* Enjoying 7 year car loans at 11% interest
* Subprime auto delinquencies are rising
* Inflation continues to rise
* Food insecurity is rising
* Housing remains unaffordable
* Foreclosures are rising
* Homelessness continues to rise
* Somewhere between 30-50% are living paycheck to paycheck (depending on the source)
* Thrift stores have exploded in popularity the last ten years
* Folks are using “buy now pay later” on groceries and fast food
* Credit card delinquencies are rising
* Risky mortgage products are rising in popularity again
To make things worse, corporate America has realized that they don’t really even need that 80% to remain profitable. So they are increasingly marketing to that 20%. Being a sports fan now requires three different streaming services. A trip to Disney is almost impossible for a working class family and if they do go their experience is FAR less enjoyable than the catered experience of a wealthy family. Concerts, retail, dining, transportation – all catering to the wealthy while the other 80% are priced out of more and more things that used to be the ‘privilege’ of working hard in America.
The phrase “K-shaped” has gotten so overused as to have become meaningless. It’s no longer about certain industries (or geographic regions or demographics) doing well and others doing poorly. What these articles are really getting at, but don’t come out and say explicitly, is that if most of your income and wealth come from the stock market and or real estate then you probably have a positive outlook but if it comes from employment (including high income professional work) or running an actual small business then not so much. And obviously that can all change in an instant – a stock market crash would quickly cause the top part of the K to break off and suddenly everyone would have a negative outlook.