The Two Economies

The Rich Have Recovered—the Country Hasn’t

In early January, walking in midtown Manhattan on a bitter-cold morning, I saw a crowd of people standing on the sidewalk about four abreast, in a line that stretched almost around the block—I guessed two thousand people, maybe more. They seemed to be all ages, from teens to oldsters, and all backgrounds, white, black, Hispanic, Pacific Rim, South Asian. I asked a man in the line what it was for. He said, “A hotel is hiring.” Ah.

The next Sunday, the New York Times Real Estate section had a glossy summer-rental insert. One ad was for a rental on Long Island Sound—great house, lovely pool, beachfront, dock—only $175,000 for the month of August.

So those are two faces of what many economists are now calling a “recovery.” The mood on Wall Street, indeed, is practically giddy. Markets are up and corporate profits are soaring. The old bonuses are back, expense stubs at top hotels and restaurants are levitating, and thousand-dollar-a-bottle wines flowed freely at the year-end parties.

Things are much less bright in the rest of the country. Hiring is still in the doldrums. The official unemployment rate has gone down a tad, but that’s mostly because large numbers of people are dropping out of the work force. The steep free-fall in housing prices has stopped, but the market has yet to bottom out. Consumers increased spending over Christmas, but it came out of their savings.


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About the Author

Charles R. Morris, a Commonweal columnist, is the author of The Two Trillion Dollar Meltdown (Public Affairs), among other books, and is a fellow at the Century Foundation.