"The real economy" requires motivation, energy, and work. It needs people to do things of their own volition, more or less, with the hope that they will receive something that is more significant to them than is the work, time, energy, and thought that they put in.
In order for this to happen, CONDITIONS need to be conducive, and it needs to be done by the private sector. Government cannot, by itself, constitute a real economy, because there is a disconnect between the work done, and the benefit received--that is, the benefit received is coerced from others, rather than resulting from a free exchange. When this is the case, it is increasingly the case IMO that the middle part, being perceived as an unnecessary and very inconvenient impediment to realizing the benefit, is either minimized or eliminated totally. This is when taxpayers pay a lot, and receive either very little, or nothing, for their money. On any such scale there will be a point at which, under rational analysis, a project would not be worthwhile because it costs more than it is worth. Of course on public projects such rational analysis is never undertaken, and if it is undertaken by third parties, it is immediately marginalized and the issue obfuscated using the considerable resources at the disposal of the public authorities and their lock-step media.
Thus what needs to happen to impel "the real economy" is first and foremost that conditions favoring private economic activity need to be cultivated by the government, and then to make it more efficient, government activity needs to be minimized. In practice, the two amount to almost the same thing: either decrease regulation, or change regulation to make it more rational and more efficient, or do a mix of both, where appropriate.
The exact opposite has taken place. Regulation, in all sectors that I can think of, has gone through the roof. Taxes and fees continue to rise. Not only that, but government is undertaking increasingly controlling roles in so-called "infrastructure spending", which is also a negative thing. EVERYTHING that results from human endeavor is economic infrastructure, including that new paint job you put on your private house, or your car, or the pair of shoes that you are wearing. Try to work without a pair of shoes--unless you're a lifeguard, it's not going to happen. It is infrastructure, it permits you to engage in economic activity, which contributes to the public good. So-called "public infrastructure" is just a way of slicing the baloney to permit governments, rather than private entities and consortiums, to control inter-jurisdictional projects. The term has no intrinsic meaning, and is an economically inefficient power grab.
Yes I know there is a school of thought that says that during a recession especially, public spending on infrastructure is what brings the economy back, or keeps it afloat. Hogwash. There is no rational proof, ever, that such projects are worth what they cost, or even that they are the most efficient use of the resources consumed.
Because "the real economy" is the result of what people do, the unemployment number is often seen as significant. Without considering such things as labor-force participation, tax burden, productivity, and costs, it is a meaningless measure, which is why we look at productivity, PPI, etc.
Bottom line for me is that I don't see positive economic conditions, and I haven't for a while, in the USA. Capital is mobile, and move it will. I also don't see a positive economic story told by any intelligent synthesis of the indicators. All that is left, therefore, is asset prices--and when that's the case, you are either in the game, or you're out, which is why the majority of whatever benefit remains is distributed unequally (which disparity of distribution is, to me, a prime indicator of the lack of underlying "real economic" activity).
And asset prices bring me back, finally, to my earlier questions to Igy and others: at what level, P/E or otherwise, will the DJIA/SP500 be "fairly" valued (yes I know that is a loaded actuarial term), or at least sufficiently attractively valued that it would cause you guys to buy long in any significant measure?