John Ransom

It’s been a truism for as long as I’ve been alive that Washington, DC is out of touch with the lives of the rest of us who don’t live in New York or Los Angeles.

Unfortunately, it’s never been as more true either.

And it has had great consequences for the rest of the country.

When you spend more than half of your private sector output on government, then unfortunately, as the government goes, so goes the rest of the country.

The government believes that the policy of taking income from you to give to the government is addition by subtraction.

I say it’s the cutting edge of the disconnect between the “us” that just wants to live our lives and the “them” who uses our lives as punctuation in their fictionalized tome that can generically be called My Struggle Against Lies, Stupidity and Cowardice.

You see, there is a Great Disconnect in this country.

There’s a disconnect between earnings and GDP, the stock market and wages, housing and homeownership, doctors and patients, blacks and whites, students and parents, men and women, common sense and ideology.

And yes, some of that tension has always existed, but this is the first time in my lifetime that the government has set about deliberately to exacerbate those tensions.

Generally governments try to do things to make life more orderly, not, you know, the obverse.

As Wall Street reported record earnings in January-- again—the stock market recorded it’s worst monthly performance since August.

Expect the disconnect to continue.

Since the official numbers for GDP have indicated an economy performing better than it has in recent memory, the market has reversed course and moved down, as seen in the three month chart below.

^SPX Chart

^SPX data by YCharts

Financing is still hard to come by for Main Street, and in another case of disconnection, financial services companies lead the S&P 500 in earnings growth.

“Total earnings for the Finance sector are expected to be up +25.3%,” Zacks analyst, Sheraz Mian writes. “Excluding Finance, total earnings growth for the S&P 500 drops to +6.4%.”

This goes along with the strange, disconnected numbers we are seeing in the job market.

John Ransom

John Ransom is the Finance Editor for Townhall Finance, host of Ransom Notes Radio and you can catch more of the best money advice and monetary commentary by him daily 10am PT, 1pm ET at or on Comcast Cable