The fault in our starry-eyed 'recovery': 2014 looks like we're going bust again

http://www.theguardian.com/commentisfree/2014/jun/06/recovery-2014-economy-wall-street-washington-hype

***SNIP

What’s different this time is that the misery is starting to spread higher up.

The paradox of the “recovery” for the past five years has been that consumers suffered while corporations and Wall Street raked in profits unseen in their history. At the end of 2013, corporate profits hit an all-time high of $1.9tn. Those profits were largely achieved not by growing, but by cutting - cutting jobs, investment in research, and new projects. Banks benefitted, too, with their profits of the six largest US banks reaching $76bn last year - not so far from the record of $82bn in 2006. That was also based on cutting - mainly, on cutting out consumers from mortgages and other lending.

The corporate balloon is popping: trade deficits jumped to a two-year high, and once-bulletproof companies and banks are suffering as corporate profit margins fell 14% in the first three months of the year – at the expense of American workers, of course, with Goldman Sachs dispassionately declaring that “wage growth has shown little evidence of a pick-up”.

The negative economic data recently has been waved off by any number of economists, who dismissed the GDP drop into negative territory, for instance, as an anomaly. It’s the same way many economists have waved off America’s persistent unemployment crisis. The promise was that the economy was storing up all its energy, that consumers were temporarily holding back until they would be released - by weather, by credit, by sheer impulse - to go on economy-boosting spending sprees throughout the country.

For anyone paying attention, hearing these chipper decisions to ignore the data was like falling through the looking glass.