by Ambrose Evans-Pritchard

LONDON, England - January 9, 2011 - The U.S. is drifting from a financial crisis to a deeper and more insidious social crisis. Self-congratulation by U.S. authorities that they have this time avoided a repeat of the 1930s is premature.

There is a telling detail in U.S. retail chain store data for December. Stephen Lewis from Monument Securities points out that luxury outlets saw an 8.1% rise from a year ago, but discount stores catering to America’s poorer half rose just 1.2%.

Tiffany’s, Nordstrom, and Saks Fifth Avenue are booming. Sales of Cadillac cars have jumped 35%, while Porsche’s U.S. sales are up 29%.

Cartier and Louis Vuitton have helped boost the luxury goods stock index by almost 50% since October. Yet Best Buy, Target, and Walmart have languished.

Such is the blighted fruit of Federal Reserve policy. The Fed no longer even denies that the purpose of its latest blast of bond purchases, or QE2, is to drive up Wall Street, perhaps because it has so signally failed to achieve its other purpose of driving down borrowing costs.

Yet surely Ben Bernanke’s “trickle down” strategy risks corroding America’s ethic of solidarity long before it does much to help America’s poor.

The retail data can be quirky but it fits in with everything else we know. The numbers of people on food stamps have reached 43.2 million, an all time-high of 14% of the population. Recipients receive debit cards - not stamps - currently worth about $140 a month under (illegitimate) President Obama’s stimulus package.

The U.S. Conference of Mayors said visits to soup kitchens are up 24% this year. There are 643,000 people needing shelter each night.

Jobs data released on Friday were again shocking. The only reason that headline unemployment fell to 9.4% was that so many people dropped out of the system altogether.

The actual number of jobs contracted by 260,000 to 153,690,000. The “labor participation rate” for working age men over 20 dropped to 73.6%, the lowest since the data series began in 1948. My guess is that this figure exceeds the average for the Great Depression (minus the cruelest year of 1932).

“Corporate America is in a V-shaped recovery,” said Robert Reich, a former labor secretary. “That’s great news for investors whose savings are mainly in stocks and bonds, and for executives and Wall Street traders. But most American workers are trapped in an L-shaped recovery.”