Mirroring the fact that the recovery is not creating enough jobs for new graduates and wage gains for older middle class Americans, the housing market is not seeing really broad based gains.
According to the widely watched Case-Shiller Index, home prices are still 20 percent off their 2006 peak, and it may be the end of the decade before that lost growth is regained.
Those downward pressures on prices are replicated across the economy. For example, many manufacturers, restaurants and other service businesses can’t raise prices much.
The only industries where prices and salaries are rising strongly seem to be those with generous government subsidies and government sanctioned monopoly power—for example, health care, higher education, cable TV, and Wall Street banking.
The economy is not likely going to tank, but economic growth is not likely to match the president’s optimistic aspirations until policies are embraced other than compulsory health insurance, ever larger education loans, higher taxes, indulging politically-connected monopolists, and excessive government regulation.
Peter Morici is an economist and professor at the Smith School of Business, University of Maryland School, and a widely published columnist. He tweets @pmorici1