Economists Turn to Magic 8-Ball for Cause of Malaise (Boston.com)
It seems economists in the United States may be consulting their own â??Magic 8-Ballâ? to figure out why the American economy isnâ??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: â??Chances are goodâ? is an example of one answer. Well, when economists were asked the question of why the U.S. economy isnâ??t doing any better, their 8-Ball told them: â??blame the U.S. income gap.â? 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 isnâ??t benefiting as much as it should. A possible solution is to â??spend moreâ? money. But the situation leaves investors unsure how to read these economic tea leaves and partly explains the marketâ??s recent retreat.