The big disconnect: What can be done about the Main Street, Wall Street divergence?

In 2010, the smartest minds out there are going to need to come up with something that will bridge the big gap between Wall Street and Main Street.

In 2010, the smartest minds out there are going to need to come up with something that will bridge the big gap between Wall Street and Main Street, according to data from TrimTabs Investment Research.

Indeed, TrimTabs is reporting that the take-home pay of all taxpayers in 2009 fell $800 billion, or 12 percent, to $5.8 trillion. The value of all U.S. stocks rose $3.5 trillion, or 27 percent, to $16 trillion.

TrimTabs note that the policy response to the economic meltdown has been to print money. That money had to go somewhere and it went to the market.

The larger issue here is whether the Feds are relying on flawed data. Are we flooding the liquidity pump when we need to pull back? TrimTabs argument is that the Feds are relying on data from the Bureau of Economic analysis, which doesn't use tax data. According to the BEA, 2009 personal income only fell 1 percent.

Add it up and we have Main Street-Wall Street, data and policy disconnects. And while we're at it we might as well toss in the laws of unintended consequences because you know that's around the corner as fixes are crafted.

This post was originally published on Smartplanet.com

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