America’s Great Middle-Class Boom Has Begun

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America’s Great Middle-Class Boom Has Begun

If you’re a typical Trends subscriber, you’ve spent most of your career in the top 1% of America’s earners and if you’re over 50, you’re probably in the top 1% of America’s wealth holders as well.  That means you’ve “done quite well during the Transition-Phase of the Fifth Techno-Economic Revolution: bouncing back from both the Dot-Com Crash and the Great Recession.  In fact, if you simply kept your money in an S&P 500 index fund for the past 20 years you’ve gained 231%.  And in that same period, your nominal annual income likely more than doubled.

However, after inflation, the median wage-earner was worse off in 2016 than in 2000, based on the CPI.  And renters in high tax states, like California and New York, have frequently found themselves unable to “make ends meet.”  That’s what Trends has referred to as “the two-tiered” economy, with those in the upper two quintiles “doing fine” and those in the bottom three quintiles “struggling.”

As Professor Carlota Perez forecast two decades ago, the tumultuous “transition phase” of the Digital Techno-Economic Revolution is now being supplanted by a new Golden Age.  This new era is driven by the deployment of productivity-enhancing digital technology, favorable demography, and economic institutions transformed for the realities of the Digital Paradigm. 

As of late 2019, the American economy has moved beyond the Transition Phase; “the new Golden Age economy” is rising rapidly in the United States, and it’s reshaping the rest of the global economy.  The question is whether this Golden Age is benefiting the bottom three quintiles of Americans or just the wealthy and highly educated.

If you ask presidential candidates like Elizabeth Warren, Kamala Harris, Bernie Sanders, and Joe Biden, hardly any of the benefits of the accelerating economy are going to the middle class and poor.  In fact, Sanders likes to say, this "economy is great for billionaires, not for working people.”  Meanwhile, House Speaker Nancy Pelosi grouses that under the current agenda, "the rich get richer, and everyone else is stuck paying the bill."

As you probably know that’s been the standard liberal argument since the election of 2016, as they’ve struggled to explain how a president who they said would “create a second Great Depression” has created boom times with stock market records, as well as the lowest inflation and lowest unemployment in half a century...

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