The "K-Shaped Economy"

[Mac1958]

Look up "K-shaped economy". That's what they're calling this. It means that there are big winners and big losers in this economy.

The stock market? The Dow30, the S&P500, and the NASDAQ are all weighted indexes, meaning that the biggest companies have an outsized influence on the performance. Right now, with the massive AI buildout (you can look that up, too), both the markets and the economy are being driven by that spending and earning. Not by consumers like you and me.

So while the big tech companies like NVDA, TSLA, MSFT, META, Amazon, Google, PLTR, ORCL, AMD and AAPL are all absolutely swimming in cash and paying each other to build out AI, the rest of the economy is floundering. This is evidenced by the flat or falling performances of sectors like Financials (XLF), Health Care (XLV), Energy (XLE), Utilities (XLU), Industrials (XLI), Consumer Discretionary (XLY), Consumer Staples (XLP).

Please note: I just provided specifics. You can look all of that up.

For regular Americans, this is just bad. The tariffs have hit in the form of jobs, as companies have decided to lay off and stop hiring in response to their increased cost of doing business. That's the quickest and easiest strategy for them. The dominoes are now falling.

What does the future look like? No one knows, and if they tell you they do, they are delusional, full of shit and/or lying. And things could start turning around tomorrow. But right now, today, at this moment, this is bad and getting worse.

 

[Muhammed]

Look up "K-shaped economy". That's what they're calling this. It means that there are big winners and big losers in this economy.

Yep. That's a K economy, brought to you by Bidenflation, which pummeled the hell out of the middle class.

The Democratic party of slavery's COVID ultra-authoritarianism put many small mom and pop businesses under for good. Biden flooded the country with hordes of third world shitholers to slice the Achille's heel of the American labor market.

That's in the how-to guide for creating a K-economy.

 

[JoeB131]

Why do you think this is a bad thing, Vichy Mac? YOu usually cheer when the Wall Street Parasites **** the rest of us.

 

[leftwinger]

Utah is a foreign land. The Real USA is much different. CHEESE boys don't have a handle on what goes on in America. This ain't SLC where everyone goes home at 5PM like stepford people. Good night John....

 

[sparky]

this fits here>>>



~S~

 

[Mac1958]

The K-shaped economy has come for your wages, as lower-income Americans sees their gains plummet to the weakest rate in a decade

The winners right now are the wealthy and the AI buildout companies. That's it.

 

[Woodznutz]

this fits here>>>



~S~

He's conflating wealth and money. Money builds wealth and is itself wealth. A more revealing chart would be the distribution of money. The amount of money that he says the richest people possess doesn't exist. What money has bought and built is what exists. There isn't enough money in the world to buy the "wealth" that is in the world.

 

[sparky]

He's conflating wealth and money. Money builds wealth and is itself wealth. A more revealing chart would be the distribution of money. The amount of money that he says the richest people possess doesn't exist. What money has bought and built is what exists. There isn't enough money in the world to buy the "wealth" that is in the world.

fair enough Woodz......i could post all manner of goofy charts but.......the general jist would be more of America (land, business, material things) are owned by the top 1% and less for the rest of the 99% ......what would really be enlightening is a timeline for such a shift



~S~

 

[Woodznutz]

fair enough Woodz......i could post all manner of goofy charts but.......the general jist would be more of America (land, business, material things) are owned by the top 1% and less for the rest of the 99% ......what would really be enlightening is a timeline for such a shift



~S~

Graphs and charts are snapshots in time and can change and be changed by consumers. People want to 'keep up with the Jones', not realizing that the Jones are deeply in debt. Madison Avenue preys on this attitude. What most don't realize is that if the economy crashes it will affect the rich as well. Note who was jumping out of tall building when the stock market crashed in 1929.

 

[Mac1958]

Our economic numbers are being held afloat by the AI buildout, and markets are getting nervous that a drop in tech will be a real problem. The AI buildout alone is responsible for 1.1% of our overall GDP growth:

AI spending is boosting the economy, but many businesses are in survival mode

From the piece: Pappas’ story and many like it are being masked in the macro data by the power of AI. In the first half of the year, AI-related capital expenditures contributed to 1.1% of GDP growth, according to a September report from JPMorgan Chase. That spending outpaced the U.S. consumer “as an engine of expansion,” the report said.

A K-Shaped economy is great for the big guys, but not for the rest of the country. I wish more people understood this.

 

[SweetSue92]

this fits here>>>



~S~

This took my breath away....really. I gasped. I knew this but wow

 

[sparky]

A K-Shaped economy is great for the big guys, but not for the rest of the country. I wish more people understood this.

This took my breath away....really. I gasped. I knew this but wow

So would a "K" shaped economy , which is basically the gap betwixt the haves and the have nots be a failure of capitalism?

~S~

 

[gipper]

this fits here>>>



~S~

Americans don’t know how to fight back because they have been conditioned to worship the rich. They’re taught to look up to the greedy CEO who is hoarding all the wealth. It’s why Americans blame everything else for their problems except the capitalist system that’s causing them.

 

[Mac1958]

Capitalism is the greatest engine of growth, opportunity and prosperity the world has ever seen.

Unfortunately it has been badly misapplied by people who are lost in an ignorant laissez faire ideology.

 

[SweetSue92]

So would a "K" shaped economy , which is basically the gap betwixt the haves and the have nots be a failure of capitalism?

~S~

I would say Crony Capitalism is more at fault

 

[Woodznutz]

So would a "K" shaped economy , which is basically the gap betwixt the haves and the have nots be a failure of capitalism?

~S~

Actually, demonstrates the success of capitalism, for those at the top of the K. The problem with the metaphor is that it presents a "choke point" in the middle of the K which suggests that the lower half cannot access the upper half, which of course is false as many in the top were once in the bottom.

 

[sparky]

Unfortunately it has been badly misapplied by people who are lost in an ignorant laissez faire ideology.

There are many here that opine Capitalism as originally intended no longer exists Mac

Actually, demonstrates the success of capitalism, for those at the top of the K.

Only if one subscribes to dog eat dog capitalism Woodz

I'd like to think everyone has a shot at the brass ring.....

Not just those who grease Congress to be their mouthpieces, buy elections for their own gains, or are collusive in foreign policies to fill their coffers

~S~

 

[Woodznutz]

I'd like to think everyone has a shot at the brass ring.....

Most just want an 8 to 5 job with weekends off.

 

[Darkwind]

Politicians such as Robert Reich portray wages as a magical lever, suggesting we can raise or lower them at our discretion. In reality, wages serve as signals within our economy, reflecting market forces rather than whimsical adjustment. Supply, demand, required skills, productivity, and competition drive wages upward or downward. When the labor market floods with candidates willing to work for less, wages decline. Conversely, when employers compete for a limited pool of workers, wages increase. These changes follow economic principles, not moral judgments.

What truly renders wages insufficient is the government’s role in escalating the cost of living for Americans.

Consider housing: policies restricting zoning, imposing lengthy permit processes, enforcing height limits, and entangling development in red tape drastically limit new construction. These interventions artificially suppress housing supply, fueling soaring rents by distorting the natural forces of supply and demand.

Examine energy costs: elected officials shut down pipelines, curtail drilling opportunities, and indulge in regulatory excess. These decisions drive up the price of energy, which in turn raises the cost of goods across the economy.

Review taxation: government deducts a significant share from every paycheck before reaching workers. Federal, state, payroll, Social Security, Medicare, property taxes (embedded in rent), sales taxes, gas taxes, and utility fees each contribute to the shrinking value of earned wages. Yet, politicians direct blame toward employers instead of confronting their own fiscal policies.

Observe inflation: businesses do not print trillions of dollars; government and the Federal Reserve do, injecting money that undermines the purchasing power of wages more than any action taken by private industry.

One essential fact remains absent from Reich’s analysis: nearly 75 percent of American businesses employ fewer than ten people. This reality belies the simplistic narrative of “Rich versus Poor,” revealing instead that both workers and small employers struggle under the weight of onerous government policies. Increasing taxes and expanding regulations have only amplified the nation’s economic challenges.

Small business owners fight to survive under the very conditions those policies created, alongside ordinary Americans burdened by high costs.

Government created the exorbitant cost of living. Government inflated prices. Government drove up rents, energy prices, and taxes. Yet those advocating socialist solutions blame wages, ignoring the crisis affecting employers and employees alike.

Wages do not cause today’s economic hardships. Harmful government policy does.

 

[leftwinger]

Nary a peep from Cheese about Deep State sucking up 20% of GDP and spending wasting 28% of GDP. They produce little of value on about 14% of GDP. Tackle the biggest problems first.

There's your top of the K MAC&CHEESE.