One of the big problems in the U.S. economy right now is that big corporations are generating record profits not by growing revenues but by cutting costs.

"Costs," as everyone who works for a big corporation knows, are a synonym for employees, employee wages, employee perks, capital investment, and research and development.

As a result, we have reached a point where corporate profit margins are at all-time highs and corporate wages are at all-time lows as a percent of the economy. (See charts here.)

That's not sustainable, says economist Gary Shilling of A. Gary Shilling & Co.

The employees whose collective wages are stagnant or dropping account for most of the spending that drives the economy. So if employees aren't getting paid well, and corporations aren't spending, the economy can't grow quickly.

Shilling observes that, from a philosophical perspective, what is happening is that "capital" (the owners of corporations) are dominating "labor" (the rank and file employees who make and

Stocks are starting the week near all-time highs despite an earnings season that has been filled with revenue misses.

“The reality is that investors are only enamored with what the Fed and other central banks are doing. They’re shoveling money out the door,” says Gary Shilling, president of A. Shilling & Co., an economic consulting firm. Investors, in turn, have adopted a “don’t fight the Fed," attitude Shilling tells The Daily Ticker.

What that approach is missing, says Shilling, is an understanding of what the economies in the U.S. and overseas are doing, which isn’t much.

The U.S economy grew at a 2.5% in the first quarter-- well below expectations of 3.2% growth though much better than the 0.4% reported for the fourth quarter. “Europe is in recession, Japan is barely growing and China is slowing,” says Shilling.

Related: Long-Term Bear Sees One Economic Bright Spot: Jobs

This gap—what Shilling calls the “great disconnect”--between a strong stock market and a weak global economy