As Eric Sprott points out in his latest letter, "if one looks past headline figures, things are not really getting better. As shown in Figure 1, real disposable income per capita in the U.S. has increased only modestly since the Great Recession. However, all of this increase is due to Government Transfers, not from an improvement in the real economy. If we exclude those transfers from the numbers, disposable income per capita is actually lower than it was at the end of 2005 and has been painfully flat since 2011. Also, those numbers assume that the headline Consumer Price Index (CPI) accurately represents people’s purchasing power."
Presenting our chart of the day: disposable income with and without government transfers.
And it is not just disposable income: as Sprott explains, "the U.S. economy has been on life support, graciously provided by Central Planners. However hard they try, they will soon realize that no amount of money printing can cleanse the rot of the U.S. economy." (read more)
22 comments:
Cheery morning reading, this.
If the media parrot the White House headline, won't that make our economy better? Just by saying it?
I don't know.
The U.S. economy is amazingly resilient.
I remember well how determined President Carter was for all of us to live in good Christian poverty and surrender.
Turned out not to be in the cards.
American optimism is not easily defeated. Expect a sharp turn in a different direction.
Government waste and fascist laws like the ACA are dragging it down.
This is not exactly news. Real incomes for most people have barely moved since Reagan.
The financial industry in particular has taken most of the increases in GDP and sequestered those gains for a very small slice of America.
What is remarkable is that the Republicans thought it was a good idea to nominate one of the more egregious culprits of this social robbery to be president.
What is remarkable is that the Republicans thought it was a good idea to nominate one of the more egregious culprits of this social robbery to be president.
Remarkably, Democrats also thought it was a good idea.
The "social robbery" thing was entirely bipartisan.
Shouting Thomas said...
The "social robbery" thing was entirely bipartisan.
Don't disagree with this, but shoving it everyone's face was a curiously disconnected decision.
Given that this President has bragged of his record on the economy, ARM, and that the worst of the social robbery has happened during his term with his approval, I don't think you Dems are any better than the Reps on this. In many ways you're worse, as you say one thing and then turn around and do the opposite just so long as you get your cut.
Bastards, the lot of you.
If you don't want things "shoved in your face", don't read here.
And quit working the glory hole.
Don't disagree with this, but shoving it everyone's face was a curiously disconnected decision.
So you oppose Hillary being nominated?
Leland said...
So you oppose Hillary being nominated?
Not a fan of Hillary, but The Dems have a plan to deal with the the fact that for most people their share of GDP has been flat or declining. Their plan is government mediated redistribution. I think it is a terrible plan but it is at least a plan. The Repubs have nothing.
If you've even been reading Insta, this is no revelation.
Their plan is government mediated redistribution. I think it is a terrible plan but it is at least a plan. The Repubs have nothing.
July 21, 2014 at 11:37 AM
Pardon my skepticism at that.
Truth is, Republicans do have plans.
The Whigs may not, but real Republicans do, although I'm sure The TrollWho(you know the drill) wants to throw as much cold water on that idea as possible.
To the extent Democrats have a plan, the results have had the opposite effect of their plan. One could say that is unfortunate, but you have to wonder if it truly was incidental since Democrats continue to hold fundraisers with the very people whose wealth they are supposedly redistributing. The same people whose wealth in comparison has grown significantly under the Democrat plan.
Great, another graph from ZeroTruth that has to be deconstructed to find a sliver of truth.
What's true is what we already know--total employment is still below its pre-recession level. This is almost certainly due in large part to the rolling disaster that is Ocare.
Until this year transfers rose bc of higher unemployment benefits and Medi/caid payments. The only autonomous increase in transfers started w the Ocare subsidies.
As for ARM's fave talking point, inequality, labor's share of income is now about where it was in 1955, when the top income tax rate was 91%. It started its current decline in 1992, at the start of 8years of Clintonian rule. It's foolish to blame that on monetary policy or Mitt Romney and his army of job destroyers. This is actually a global phenomenon. And it's not going to be "fixed" by a return to some golden age of progressive taxation.
Chip S. said...
total employment is still below its pre-recession level. This is almost certainly due in large part to the rolling disaster that is Ocare.
Since this trend started a long time before Ocare was implemented you should probably provide some support for this thesis.
labor's share of income is now about where it was in 1955, when the top income tax rate was 91%. It started its current decline in 1992, at the start of 8years of Clintonian rule.
You apparently picked this 'factlet' out of your ass. Here is a graph. The decline started in 1982 and actually recovered somewhat under Clinton.
It's foolish to blame that on monetary policy or Mitt Romney and his army of job destroyers. This is actually a global phenomenon. And it's not going to be "fixed" by a return to some golden age of progressive taxation.
Simply saying it is a global phenomena doesn't mean squat. That the average person across the globe is now the unwilling victim of the global financial industry only makes it worse. The “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money” works 24/7 in every nook and cranny of the planet skimming off the productivity of everyday people everywhere.
You have no clue about the things you opine about, o "reasonable" one.
Total employment peaked in 2008. (See the BLS for confirmation.) There is no long term downward trend in employment prior to that. If you thought about it for just a few seconds you could understand why. Try it.
The "ass" I used as a source was noted wing nut Jared Bernstein, who understands why total compensation rather than simple wages and salaries is the right number to look at.
But I do like "vampire squid." When you don't have any idea how your bogeyman is supposed to work, florid pros risk the way to go.
The big story of the global economy over the past two decades is the huge reduction in ultra-poverty. This, of course, coincides w the rise of the Washington Consensus on economic policy, emphasizing free markets over socialism. But people like you obsess over a couple of pct pts change in aggregate income shares.
The left has no coherent economic policy at all. None. All Obama's done is give us one of the worst recoveries ever. That's why Dem partisan hacks are reduced to telling LIVs scary stories about Mitt Romney, Vampire Octopus.
Neat link, ChipS. The lowering of poverty throughout the world is a good thing.
I understand that wages have been flat since at least the Seventies, with the really rich skimming the cream. Do you think this income inequality is a necessary piece to the fall of global poverty?
I don't know, deb, but I don't think so.
It's my understanding that if you look at earnings growth holding the composition of the labor force constant, the appearance of stagnating wages is an artifact of aggregation.
Chip S. said...
Total employment peaked in 2008. (See the BLS for confirmation.)
So here is a graph of total employment. A reasonable trend line suggests it peaked in 2000. I will give you a few seconds to understand why. In your line of work are you familiar with the analysis of quantitative data?
I was going to link to the Jared Bernstein graph myself. If you look at wages, which is what counts for everyday perceptions of standard of living, they decline, substantially. Did you actually look at the graph? It has a negative slope, stretching a long way back.
The big story of the global economy over the past two decades is the huge reduction in ultra-poverty. This, of course, coincides w the rise of the Washington Consensus on economic policy,
The single biggest force was the Communist Party of China, who have lifted more people out of poverty than any organization in history. My view is my country first. Off-shoring has been good for the citizens of other countries and for our local oligarchs. For the rest of us, not so much.
All Obama's done is give us one of the worst recoveries ever.
All Bush did was give us one of the worst recessions, ever.
Chip S. said...
It's my understanding that if you look at earnings growth holding the composition of the labor force constant, the appearance of stagnating wages is an artifact of aggregation.
You really need to learn to provide links to support these unsubstantiated beliefs, like this one.
Haha, funny stuff. That's some real serious micro data there. Like "composition" just means white males vs. everyone else--you racist sexist. Pro tip: find some actual data on life-cycle earnings. You'll be briefly amazed, before you succumb to cognitive dissonance.
Regarding Bernstein's graph, either you need to zoom in on the page or learn what "trend" means.
Oh, and congratulations. By claiming that China's boom is the result of Communist policies, you've full unearned the sobriquet An Unreasonable Troll.
Ciao, AUT.
The big lie in the offshoring of our manufacturing base to China is that this is somehow a win for capitalism. That would be the People's Republic of China, a one-party state in which all the major manufacturing enterprises are either owned by the Communist Party or by functionaries of the Communist Party.
The financial quislings who propagate this lie should bend their heads in shame.
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