Understanding the Domestic “Shadow Economy”

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Is the US Economy Strong OR Not?

By Dr. David Edward Marcinko MBA


Dr David E Marcinko MBARecently, new highs for the DJIA and some better than expected jobs numbers pointed an outward sign of the US  economy’s continued — though sluggish — recovery from the Great Recession.

Workers in the Shadows

But, there may be another explanation for why consumers keep spending more despite higher payroll taxes and more pain at the gas pump.

Edgar Feige PhD Speaks

That reason is a thriving shadow economy, estimated to have reached as much as $2 trillion last year, according to a study (.pdf file) co-written by Edgar Feige, an economist at the University of Wisconsin-Madison.


A shadow economy is one where workers turn to employment that pays under-the-table. While that sometimes includes illegal activity, such as drug dealing, much of the shadow economy today appears to be in areas like service work such as babysitting; medicine, eye, foot and dental care; and working construction jobs for cash.



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And so, are new medical practice business models like retainer and concierge medicine, direct/private pay, or cash care more or less prone to participation in the underground healthcare economy?

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Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com


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2 Responses

  1. A Basic Economics Video

    Recently, I came across this excellent video by Ray Dalio of Bridgewater Associates. For those of you who don’t know, Ray Dalio runs one of the largest Hedge Funds in the world with $122 billion AUM. He breaks down the economy into three parts:

    • Short Term Debt Cycle
    • Long Term Debt Cycle
    • Productivity Growth

    Ray makes an astute observation that credit is actually more important to the economy than money and proceeds to explains it all in this easy to follow 30 minute video.

    Now, don’t expect stock tips, investing ideas or the usual diatribe. This is pure education for all ME-P readers and subscribers.

    Dr. David Edward Marcinko MBA



    Holiday shortened weeks are usually kind to investors and last week did not disappoint. If history is any guide, the bulls are likely to remain in control next week too.

    During the last five trading sessions of December and the first two of January, the Dow has gained an average of 1.7 per cent, according to the Stock Trader’s Almanac (the data go back to 1896).

    The Round-Up:

    • DJIA: 18,053, up 1.4% on week, up 8.9% YTD (best 5 days since 2011)
    • S&P 500: 2088, up 0.9% on week, up 15.1% YTD (52nd record high of the year)
    • NASDAQ: 4806, up 0.9% on week, up 14.1% YTD
    • Russell 2000: 1215, up 1.5% on week, up 4.4% YTD
    • 10-Year Treasury yield: 2.25% (from 2.18% a week ago)
    • February Crude Oil: $54.73, down 4.2% on week
    • February Gold: $1,195.30, down 0.04% on week
    • AAA Nat’l average price for gallon of regular Gas: $2.31 (from $3.28 a year ago).



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