Two Americas, Two Recoveries

They say that genius is the ability to hold two opposed ideas in
mind at the same time; but sometimes I'm not sure if the Wall Street Journal is genius or just schizophrenic. An article in today's edition (subscription) basically lays out, in detail, talking points for John Edwards' "Two Americas" speech, especially in how it relates to the current so-called recovery.

A few examples:

Joshua Berry and Ricky Williams, both Houstonians, have seen two very different economic recoveries.

Mr. Berry, an entrepreneur, has profited handsomely from the stock market, in the real-estate boom and by selling a business. Mr. Williams, an airline baggage handler, has been waiting since 2001 for a pay raise.

[snip]

Hotel revenue was up 11% in the first five months of 2004 at luxury and upscale chains, but up just 3% at economy chains, according to Smith Travel Research, a market-research firm. At the five-star Broadmoor Hotel in Colorado Springs, Colo., $600-a-night lakeside suites are sold out every day through mid-October.

At high-end Bulgari stores, meanwhile, consumers are gobbling up $5,000 Astrale gold and diamond "cocktail" rings made for the right hand, a spokeswoman says. The Italian company's U.S. revenue was up 22% in the first quarter. Neiman Marcus Group Inc., flourishing on sales of pricey items like $500 Manolo Blahnik shoes, had a 13.5% year-over-year sales rise at stores open at least a year.

By contrast, such "same store" sales at Wal-Mart Stores Inc., retailer for the masses, were up just 2.2% in June. Wal-Mart believes higher gasoline costs are pinching its customers. At Payless ShoeSource Inc., which sells items like $10.99 pumps, June same-store sales were 1% below a year earlier.

A similar pattern shows up in cars. Luxury brands like BMW, Cadillac and Lexus saw double-digit U.S. sales increases in June from a year earlier. Sales of lower-tier brands such as Dodge, Pontiac and Mercury either declined or grew in the low single digits.

The rich get richer and the middle class and poor are running just as fast as they can to stay in the same place. Most everyone who reads my blog will recognize something of their own lives in this account; I don't think there are too many millionaires that read The Fulcrum (although if there are would you forward a couple hundred grand to me? Thanks.).

The Journal, most notably on its staunchly pro-Republican, pro-Bush Editorial Pages, continues to tout the recovery, to promote the Bush tax cuts and the push to make them permanent. The reporters out on the street, who can see what's really happening in America are telling a different story.