So why do Americans feel like we are still in a recession when the data shows that the economy has been growing over the past year? The New York Times’ Catherine Rampell addressed that based on some insights from Alan Greenspan, former chairman of the Federal Reserve.
Greenspan has observed a “two-speed” economy where the wealthy have been increasing their consumption and large corporations, including banks, have been seeing improvements in revenues. Small business owner and most labor have been seeing the opposite.
What the article fails to discuss is that the main difference between the two speeds is possession of income generating assets. Wealthy individuals with a lower propensity to spend combined with income generating assets will fare better than those of us who go by pay check to paycheck. We have no significant private safety net.
Combine our lack of income generating assets with increases in per capita productivity thus the disincentive for businesses to add more labor, and you get an increased feeling that this economy is working against you rather than for you.