The Wall Street Rally That Wasn’t » Counterpunch: Tells the Facts, Names the Names
"Ask yourself this: How can corporate profits grow, when wages are stagnant? They can’t, not for long at least, because–while production costs may go down–workers no longer have the wherewithal to buy the widgets that business produces. So, sales drop and earnings plunge. (And when earnings stumble, stocks should fall.) This problem can be temporarily patched-over by extending hundreds of thousands of dollars of credit to anyone who can sign his name on a mortgage application, but as we now know, that just paves the way to a world of pain. The only real fix is income growth, wages that keep pace with production. Unfortunately, we’re moving in the opposite direction as Charles Biderman points out in this post at TrimTabs:"
