There seems to be an unlimited supply of methods in which the rich in America keep getting richer and the average Joe picks up the tab. (Think about the $16 trillion secret bailout of Wall Street by the Federal Reserve from 2007 to 2010 for the quintessential example.)
Yesterday, Fortune Magazine ran this sobering headline: ‘The Wealth Gap in the U. S. Is Worse Than In Russia or Iran.’ The article quotes Richard Florida, author of The New Urban Crisis, as follows:
‘Inequality in New York City is like Swaziland. Miami’s is like Zimbabwe. Los Angeles is equivalent to Sri Lanka. I actually look at the difference between the 95th percentile of income earners in big cities and the lower 20%. In the New York metro area, the 95th percentile makes $282,000 and the 20th percentile makes $23,000. These gaps between the rich and the poor in income and wealth are vast across the country and even worse in our cities.’
Against that backdrop comes news from FactSet last Friday that with 57 percent of the companies in the Standard and Poor’s 500 Index reporting actual earnings results for the second quarter of 2017, ‘ten sectors are reporting year-over-year earnings growth, led by the Energy, Information Technology, and Financials sectors.’ FactSet adds this: ‘The only sector reporting a year-over-year decline in earnings is the Consumer Discretionary sector.’ That would be the sector in which the average Joe lives.
This post was published at Wall Street On Parade By Pam Martens and Russ Marte.