"Economy goes forward, but leaves many behind," says USA Today.

But it is a staged economy, not the real thing. The leading actors - Bernanke, Greenspan, et al. - are supported by a cast of thousands, including clowns, freaks, and financial jugglers. Almost all the lines are either fraudulent or facetious. "No child left behind!" "A glut of savings!" "Inflation is no problem." But who gets the jokes? Instead, most of the rubes in the audience sit on the edge of their seats, convinced that they are watching a heroic epic rather than a low farce.

The trouble is that the spectators are beginning to squirm in their seats. Real wages went down in 2004 by 2.3%. Estimates have them going down this year, too.

On stage, the comedians tell us that there is no inflation worth mentioning. But the crowd is not so sure. They've noticed that the things they must buy are getting more expensive. Gasoline is $2 a gallon. Health care is at least 10% higher than a year ago. And where in the nation can you buy a house for less than twice what you paid five years ago?

Many of the theatregoers have noticed something else, too: good jobs are hard to find. G.M. is cutting 30,000 employees. Delphi is knocking 24,000 off the payroll. Ford is laying off workers, too - 3,000 of them.

On stage, we're told not to worry about it. "America's dynamic economy is the greatest job creation machine ever built," says one actor, impersonating an economist.

But if so many new jobs were being created, why are people earning less money?

Globalization is a great thing; we do not doubt it. But its virtue is a curse to most of America's lumpen working stiffs. Here in London, we see how quickly labor rates adjust to opportunity. After weeks of neglect, our little maisonette needed a cleaning. So, we called Estella, recently of Columbia, now of Brixton. In Paris, the housekeeping is done by people from the East - from Poland or Bulgaria, working in a gray area of pan-European labor regulation. As near as we can tell, here in London, the floors are swept by a vast underground of men and women from Latin America, who are paid in cash, no questions asked.

This past Saturday, Estella labored for all of five hours and demanded 45 pounds in payment - about $85. Having come from Latin America recently, this seemed provocatively expensive; it was as much as she might earn in an entire week in her home country. But in London, we have yet to encounter a price for anything that seemed reasonable. A pity we couldn't outsource the cleaning work.

As time and technology advance, however, the world is discovering more and more things that can be outsourced. Automobile manufacturing, for example...and call centers...and legal work (a friend is opening an office in Bangalore to do American legal firms' back-office work)...and many, many other things that used to be done in America.

As more and more of this work finds lower-cost labor to its liking, what does that leave at home? We can clean each other's houses! Or, we can sell each other things that are made in China!

Emblematic of the shift of the American economy from production to consumption is the ascension of Wal-Mart to the throne of national commerce. Wal-Mart now wears the crown that used to top G.M.'s head. Wal-Mart also now notices what Henry Ford noticed nearly a century ago: the more money you pay your workers, the more they can buy from you. Ford hiked wages in his factories to the un-heard level of $5 a day. Now, Wal-Mart supports an increase in the minimum wage to well over $5 an hour. The increase would cost the company millions, but it would also force its competitors to pay more, too. The move would put more money in low-wage worker's pockets (which they could empty, no doubt, at Wal-Mart).

But there is a big difference between raising wages in industry, and raising them in retail; there's an even bigger difference between willingly increasing your own costs, and forcing everyone to do so (through minimum wage laws). It is the difference between creating wealth, and using it up. It is the difference between an economy on the way up, and one trying to dig in its heels on the way down. It is the difference between an honest man on a factory floor, and a windy mountebank on a gilded stage.

Bill Bonner is the President of Agora Publishing.  For more on Bill Bonner, visit The Daily Reckoning.