’s most recent survey on savings reports that only 41% of Americans had enough savings to cover a $500 unplanned expense. Which means 59% didn’t. Before you jump off a cliff, this doesn’t mean they can’t pay their bills—many have access to credit in one form or another. And, it doesn’t necessarily mean these people are poor—but they are spending more than they make and are struggling to maintain their lifestyle.

The issue here is not wealth inequality. There always has been and will be “inequality”. The fact that some people are wealthier than most people is not relevant. If the top 1% are living fabulously well that doesn’t mean they are doing so at the cost of the rest of us. It means they are better at creating wealth and jobs than the rest of us. This is about how bad economic policies are hurting Main Street.

The real issue is, are the rest of us better off? That depends on how the economy is doing.

Who is doing well? If you are well educated, white or Asian, married, and live in large cities or on the coast, you will earn more and be wealthier. At least that’s what the data tells us. If you have a college degree (32% of Americans), you will make 80% more than high school grads. Your poverty rate will be only 4.5% versus 14.3% for high school grads and 27.5% of those who have no high school diploma.

Before we get to those struggling to pay bills, here are some positives: the unemployment rate is low (4.3%), household net worth is at an all-time high, home values have surged, the stock market is stratospheric, there are more college graduates than ever, the homicide rate is the lowest in 50 years, our air is getting cleaner, the rich are getting richer, but so are all other income levels—the middle-class is getting smaller only because they have moved up to the next income level. I could go on here, but you get the idea: the big picture is that we’ve never lived in better times.

But there are growing, troubling economic and social trends:

  • Only 62.8% of those of working age are employed, down from the peak of 67.2% in 1997.
  • For white men, the largest worker cohort, the major cause of unemployment is illness or disability.
  • Worker productivity is declining. This is a function of capital investment. In other words, the more businesses invest in machinery, the more each worker can produce. Capital investment has slowed.
  • Labor mobility is declining—fewer workers are willing to move to where the jobs are. Economist Tyler Cowan refers to them as the “complacent class”, people who are not driven to change their lives.
  • Our public schools are failing our children. High school graduates do not have the skills needed in the workplace. The College Board (which administers the SAT exams) reported that the latest reading comprehension scores were the worst since 1972 (per Bloomberg) and math scores were the lowest since 1999. ACT reported similar findings. Need I point out that these kids are our best and brightest.
  • Obesity rates, related directly to negative health outcomes, have soared. According to recent studies from the National Institute on Health, 69% of Americans are overweight or obese, which means only 31% have normal body mass indices (BMI). 36% are obese and 6% are extremely obese. 17% of children are obese.
  • Workers laid off during recessions generally never get back to pre-recession wage levels. Data varies, but about 75% have lower wages (15% to 20% less) even after 10 to 20 years. There is also a psychological toll among these workers.

As you can see, much of this distress revolves around the economy. In a robust, growing economy there are more employment opportunities and rising real wages and output. Yes, businesses close and jobs are lost because of competition, technology, and foreign trade, but in a dynamic economy new jobs and opportunities are constantly being created.

This is what is missing today. We seem to be stuck in a low growth environment. From 1950 to 1973 real GDP grew at a healthy 2.5% per year. From 2008 to 2016 it has grown only 1.3% per year. This is the slowest recovery of the past 11 recessions despite massive monetary and fiscal stimulation. One must ask why this is so after the greatest economic experts have been put in charge of national economic policy.

The reason companies see fewer opportunities for growth in America is because of the Fed’s monetary policies that cause boom and bust business cycles. By bailing out the last recession with a flood of cheap money and credit, artificially low interest rates, and bailouts of essentially failed banks and businesses, they create the seeds for the next ruinous boom/bust cycle. This breeds caution among businesses who are reluctant to invest because they now understand that the next bust may be just around the corner.

Add to that a raft of new complex regulations on financial markets and businesses aimed to make politicians look like they have accomplished something in time for the next election. What they actually have done is create barriers and uncertainty for businesses who wish to invest and expand; the numbers bear out this reluctance.

If you are on Wall Street things look pretty good. But it is the back alleys of Main Street that have borne the brunt of bad economic policies. If you are in your early 40s you have gone through two major recessions which must have impacted your view of the world as you realize yours may be the generation that will not do as well as your parents’ generation.

What economist Cowan calls the “complacent class” is to me the “dispirited class” who rise and fall and fall again on these waves of fake prosperity.

There are many issues involved here, but the first thing we must do is question the economic policies that have gotten us here or we will continue to sink. There are answers but conventional economics doesn’t have them. Our leaders’ unwillingness to change reveals their lack of compassion for the dispirited class they helped create.