Saturday, October 17, 2009

Cognitive dissonance, Wall Street Style

OK, we're at 10,000. Good. Those of us still in equities are richer (again) than we were six months ago. Good. If we feel richer, maybe we'll start spending again. Good. Corporate profits are up, as massive cost cuts drop to the bottom line. Good. Good. All good. Right?

Trying to get a job? Or running a clothing store on Columbus Avenue or on the Rue du Temple? Not so good. Thinking about a shopping spree? No way. Starting a business and looking for a loan? Good luck. Publishing a magazine? Fuhgeddaboutit.

I'm in a 'I don't get it' frame of mind. Are the markets performing as they usually do---as leading indicators of a recovery that is just over the horizon? Or are we simply living in a bifurcated society, in which Wall Street and Main Street operate by different rules, expectations, and realities. This cannot be, can it? Aren't we all privy to the same basic economic data?

The good times are rolling again on Wall Street. Timing and circumstance are working in their favor. The distractions of the health care debate and so forth have changed the subject, and the prospects for real reform are fading fast. I think we can have our cake and eat it, too, but it's not sustainable with such glaring inequalities between the average/above average households whose spending fuels the economy and those at the top making a boatload on a wing and a prayer.

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