On The Market This Small Group is Driving the Entire Economy (and They’re About to Stop)
Sep 30, 2025
Jay Scott, an economist and market analyst, dives into the shifting landscape of the economy. He explains how post-2008 changes and massive debt are reshaping macroeconomic trends. Is a recession looming? Jay suggests the top 20% of earners drive the economy and could trigger downturns with slowing activity. He also discusses the potential for AI to deflate wages, impacting housing prices. Investors get a tailored risk-off playbook focused on conservative underwriting and the resilience of single-family home prices.
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Post-2008 Structural Shift
- Since 2008 policy changes and massive debt issuance have fundamentally altered how the economy reacts compared with historical precedent.
- Lower long-term rates and unprecedented money printing make future behavior less predictable than standard historical cycles.
Economy Driven By Top Earners
- The current economy is bifurcated: the top 20% drive consumption and asset gains while the bottom 80% struggle with stagnant real wages.
- A slowdown among high earners would disproportionately slow the whole economy because they currently carry most discretionary spending.
Refinancing Wave Threatens Jobs
- Many business loans issued at very low COVID-era rates are now maturing and must be refinanced at much higher costs.
- Higher refinance costs squeeze profits and can force layoffs, making jobs the likely recession catalyst.
