Wall Street Journal: Why Americans are so unhappy with this economic recovery.

This makes perfect sense.  Excerpts here and full link following:

"...Mr. Bernanke was attempting to promote what economists call "wealth effects," or an increase in spending that accompanies an increase in perceived wealth. Watching their assets rise in value, the argument goes, Americans will consume and invest more.

At least until the recent market correction, this part of Mr. Bernanke's strategy seemed to be going well. If you owned stocks, you had reason to feel better about the economy and your own financial circumstances.

The problem is that monetary policy is not a laser-guided missile...

One result has been a sharp increase in food and energy prices that took gasoline up to $4 a gallon. These have produced what economists call "income effects," or a change in consumption resulting from a change in real income. People who pay $4 for gasoline, or $30 more for groceries, have less money to spend on other goods. They also tend to feel poorer, which can influence their overall confidence in the economy.

One big difference is who feels these effects. The wealth effects have helped everyone but especially the affluent. The income effects have been felt most acutely by the poor and middle classes for whom food and energy are a much higher proportion of income.

QE2 and near-zero interest rates have been a boon for bankers and hedge funds. They haven't been so great for suburban families who commute to work and haul their kids to football and music practice. The monetary policy so favored by liberal economists and the White House has actively favored the wealthy over the middle class.

Could these income effects have also hurt economic growth by offsetting the wealth effects that Mr. Bernanke likes to take credit for?

...The larger economic lesson here concerns the sources of long-term growth and the limits of monetary policy. Easy money can help in a crisis, and it can raise asset prices for a while. But it cannot create a durable recovery, and to the extent it leads to bubbles and higher prices it undermines future growth and erodes middle-class incomes.

The real wellsprings of prosperity are private investment and innovation, which Washington has done so much to retard with regulation, the political allocation of capital, and promises of higher taxes. Reversing those policies would unleash a genuine wealth effect."

-----------------------

Full Link: http://online.wsj.com/article/SB10001424052702303339904576403971545248668.html?mod=WSJ_Opinion_LEADTop