Government

Why don’t Obama, Old Bernie and Hillary talk about this?

Fed Poised to Mark the End of an Era

AfĀ­ter-tax inĀ­comes adjusted for inĀ­flaĀ­tion have exĀ­panded at a 1.8% anĀ­nual rate in this exĀ­panĀ­sion, slower than the averĀ­age rate of 3.3% durĀ­ing the preĀ­viĀ­ous three. Had income grown at the hisĀ­torĀ­ical rates, AmerĀ­iĀ­cans would have had $1.2 trillion more at their disĀ­posal.

ā€œThe econĀ­omy didnā€™t do great,ā€ said Michael Bordo , an ecoĀ­nomic hisĀ­torian at RutĀ­gers UniĀ­verĀ­sity in New JerĀ­sey. ā€œWe had a slow reĀ­covĀ­ery.ā€ Source WSJ 12-16-15

The economy didn’t do greatā€¼ļø Bazingaā€¼ļøā€¼ļøā€¼ļø

And why didn’t the economy do great? Ā Is it because Bernie’s billionaires did much better? Noā€¼ļø Is it because the system is rigged? Noā€¼ļø

It is because there was limited focus on growing the economy, because economic uncertainty was not clarified, because more and more regulatory burden has been placed on companies of all sizes, because ideology trumped innovation, because we fail to recognize the structural changes to work in a global environment. Yesā€¼ļøā€¼ļø This isn’t 1934 and policies based on that era won’t work.

The federal reserve has stimulated to no end and weĀ had this that was supposed to jump-start things.

Circa 2010

Circa 2010

 

And then there is the long-term reality:

 

BeĀ­neath the dry statistics of the latĀ­est reĀ­port from the BuĀ­reau of LaĀ­bor StaĀ­tistics, we can see that fuĀ­ture emergĀ­ing. Over the next decade, the serĀ­vice secĀ­tor will proĀ­vide 95% of all the new jobs. ManĀ­uĀ­facĀ­turĀ­ing, which shed more than two milĀ­lion jobs beĀ­tween 2004 and 2014, will shrink by an adĀ­diĀ­tional 800,000, to only 7% of the workĀ­force. Of the 15 ocĀ­cuĀ­paĀ­tions with the most proĀ­jected job growth, only four ask for a bachĀ­eĀ­lorā€™s deĀ­gree; eight reĀ­quire no forĀ­mal edĀ­uĀ­caĀ­tion creĀ­denĀ­tials; nine ofĀ­fer meĀ­dian anĀ­nual wages unĀ­der $30,000.

Few AmerĀ­iĀ­cans know these staĀ­tistics, but most of them are livĀ­ing the reĀ­alĀ­ity they repĀ­resent. Since the beĀ­ginĀ­ning of the 21st cenĀ­tury, the econĀ­omy has ceased to work for houseĀ­holds at and beĀ­low the midĀ­dle. A reĀ­cent reĀ­port from the Pew Research CenĀ­ter finds that the meĀ­dian income for midĀ­dle-inĀ­come houseĀ­holds is about where it was in 1997. For lower-inĀ­come households, meĀ­dian inĀ­come stands where it did in 1996. Source: The Bleak Reality Driving Trumpā€™s Rise
WSJ 12-16-15.

If you disagree, please explain why this recovery was so bad compared with the previous recession periods Ā What’s different?

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4 replies »

  1. We are in recovery. Yes, by historical standards, a weak one. Some areas of the country are doing well. I now live in the Seattle area, where construction cranes can be seen sprouting across the landscape. My hometown area of Buffalo, N.Y. is merely surviving.

    The facts presented about the current and future general economic outlook are grim, at least as they compared to the economy that existed during most of my lifetime. (I’m 68.) It used to be said that a rising economic tide lifted all boats. We are now in a period where there are three tides: one for the highly intelligent-highly educated, one for the middle, and one for the bottom third. The highlies will be doing great. The middles will muddle. The bottoms will be bouncing down an incline.

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    • Actually, the problem is economic growth which has not been a main focus for years. If we can boost growth, everything from salaries to the Social Security trust will benefit and even the SS COLA may get a boost. Instead we have seen a growth in SNAP, SS disability, general welfare and a decrease in employment participation all of which compound the growth problem.

      In addition, every means tested program, including Obamacare, provides a disincentive for people to earn more. As far as the rich go, their growth has come most from a rising stock market especially given most CEO pay is equity pay at risk. Such a rise is also good for those with pensions, 401k and IRAs.

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