Two sets of charts tell the story.
The problem is that when workers are pressed to the wall on pay they lose the ability to consume without taking on debt. And at some point the debt leverage mechanism for consumption breaks down.
Perhaps the problem is related to the one Wall Street is now confronting. How do you continue on in business after having impoverished, alienated, or driven away most of your clientele in the heat of a short term greed enabled by a corrupted political and regulatory system?
Those who were around in the late 1970's will recall the absolute disrepute in which equities were held by the public after the grinding bear market of 1973-74. Pit traders spent the better part of the day practicing their origami skills, for lack of serious 'outside participation.' Skinning each other when you have run out of greater fools is truly a zero sum game.
Weather report: Cloudy, with a chance of whirlwinds.
Fat profits, slim wages: the fruits of monetary bubbles and trickle down economics.
Charts courtesy of ContraryInvestor.
