Economists Turn to Magic 8-Ball for Cause of Malaise (Boston.com)
It seems economists in the United States may be consulting their own ???Magic 8-Ball??? to figure out why the American economy isn???t stronger. You may remember the Magic 8-Ball from your childhood, featuring an oversized billiard ball with a window in it. That window contained a die with incredibly vague answers to potential questions: ???Chances are good??? is an example of one answer. Well, when economists were asked the question of why the U.S. economy isn???t doing any better, their 8-Ball told them: ???blame the U.S. income gap.??? Sure, stocks are still chugging along, but economists claim that to the rich go the market spoils, leaving middle-class America — and low-income America — grasping at straws. Because these affluent homes spend a lower percentage of their funds than low-income and middle-class people, the American economy isn???t benefiting as much as it should. A possible solution is to ???spend more??? money. But the situation leaves investors unsure how to read these economic tea leaves and partly explains the market???s recent retreat.