Its not possible to have a strong economy without strong wage growth, and the median wage is still going nowhere. So dont be fooled by all the year-end upbeat business news. Yes, retail sales rose 2.3 percent this holiday season compared to .7 percent last year -- but that was mainly because of deep discounts at retailers offering up to 75 percent off. And what about the so-called Santa Claus rally that keeps driving the stock market to new highs? Thats not due to rising profits; its mainly because of record stock buy-backs. Corporations have been using whatever cash they have (and can borrow) to buy up their own shares, thereby pushing up the prices of their remaining shares -- and, not incidentally, guaranteeing corporate and Wall Street executives big year-end bonuses. But without real wage growth, its all built on quicksand.
Posted on: Fri, 27 Dec 2013 16:04:31 +0000
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