Monday, November 20, 2006

Here's a Bubble That We Could All Use

Wages. Finally. Although I wouldn't yet call it a wage bubble, they're finally catching up with inflation. They're gaining, after five years of molasses moves. (See Christian Science Monitor article.)

[Thanks to for the photo.]

As usual, the little guy is the last one to get on the bandwagon of inflating numbers. Assets have swooned upward; corporate profits have climaxed; credit has exploded. Isn't it only fair that the guy at the bottom of the totem pole get a few crumbs.

wages since 1997
[Thanks to the Labor Dept - Clabaugh for the graph.]


Blogger Idaho_Spud said...

Nope. The Fed takes away the punchbowl at this point - just as they did in 2000, when little guys were starting to feel good about things.

In reality it was when the last Greater Fools entered the fray with their money that the Ponzi house of cards was allowed to collapse.

This time the $ vacuum cleaner isn't dotcoms, it's hedge funds, investment banks, and housing. The greater fools this time around are flippers and subprime borrowers.

6:46 AM  
Blogger Katy said...

Right; in fact they started taking it away on June 30, 2004. As usual, the effect is lagged, especially because they moved with such "measure" (pun intended.) The vacuum cleaner will arrive. Meantime let's enjoy our meager crumbs as long as they last, at least another month or two -- and when I say "enjoy" I mean "save," because we may need 'em soon enough.

9:56 AM  

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