It’s a K-shaped krisis … · Rebel Economist (Free)

It’s a K-shaped krisis …

Or rather it is according to Robert Reich, in his latest Post at

https://robertreich.substack.com/p/an-open-letter-to-scott-bessent

He presents much the same data-driven story about the US economy as Steve recently has done.

For example -

“According to Moody’s Analytics, the richest 10% of American earners — composed of households making about $250,000 a year or more — are driving a record 49.7% of total U.S. consumer spending, significantly boosting the economy through the wealth effect of higher stock and home prices. They own over 90% of the value of all shares of stock, so big gains in the stock market have encouraged them to splurge on everything from vacations to designer handbags. “The finances of the well-to-do have never been better, their spending never stronger and the economy never more dependent on that group,” says Mark Zandi, who oversaw the analysis, based on data from the Federal Reserve. Zandi says the K-shaped economy remains ‘firmly intact’.”.

Reich concludes by hinting at a two-tier economy.

The lower arm is driven by subsistence and the upper arm is driven by luxury.

All growth comes from the upper arm.

“Meanwhile, inflation and credit pressures continue to land especially hard on lower-income Americans. In that sense, the K-shaped economy is not just a feature of recent cycles. It’s become the defining characteristic of how today’s economy absorbs shocks and generates growth.”

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It’s a K-shaped krisis …