- NPR (July 26, 2018) How Fast Did The Economy Grow? Forecasts Are All Over The Place
- Forbes (Jul 24, 2018) Trump's Economy Still Lags That Of Clinton And Bush
Lately, President Trump has touted the economy under his tutelage. The President has claimed the economy has never been better.Moron economists at the Center for Economic and Policy Research have claimed that President Trump "largely inherited the 'greatest economy ever' (see: A Peek Under the Hood Reveals Serious Problems in the Trump Economy.
In spite of the ninnies against the President, the President can make his claims because Americans had become inured to the dismal economy of Obama. In short, U.S. citizens today simply are too far removed to know good times. The incessant propaganda thrown at them about an Obama recovery had them accept the new normal of the dismal Obama years.
In truth though, the economy shrank every year since hitting a True Dollar peak of $2,416.67 billion during Q4 of 2007. The economy shrank fast between the last year of the George W. Bush president and the the first year of the Obama president. And then after the "green shoots" period of 2010, the Obama economy took a second, horrible leg downward.
The truth of the massive decline of the economy during Obama's tenure should surprise no one. It was the consequence of the burst of the biggest credit bubble in the history of mankind, the Greenspan-Bernanke Great Inflation. Obama only made problems for the economy worse by pursuing horrible policies of added regulations along with a continued flood of immigrants.
Since President Trump has taken office, the President, his team and his policies have managed to stop the decline exacerbated by the bungling Obama and his inept team. That stated, as all GDP data truly are estimates, the economy has remained flat during the first four quarters attributable to President Trump. There has been no growth whatsoever. At least there has not been any further declines.
In spite of the President's claims about the economy as never better, the economy has been much better many times since 1959. As can be seen below, the economy was on a consistent growth path from 1959 until 1981. Not coincidentally, immigration as a percentage of total population fell significantly during that period (see: THE BIG LIE: AMERICANS ARE A NATION OF IMMIGRANTS).
Between 1981 and 1994, the economy went through ups and downs, but the general direction was downward. President Reagan talked a good game, but the true economy, actually shrank during his years. The October 1987 crash in U.S. stocks revealed that speculators knew the truth about the economy.
Between 1988 and 1990 there was a recovery after which the economy began to crash, first under George Herbert Walker Bush and then under Bill Clinton. And then former Federal Reserve Chairman, Alan Greenspan, unleashed the biggest credit bubble in the history of mankind, the Greenspan-Bernanke Great Inflation. Like the babbling Wizard of Oz, Greenspan would make appearances and babble incoherently. Sadly, everyone believed that Alan was a genius.
The economy grew fast between 1994 and 2001. And then as a downturn started to take hold, Mohammadan terrorists attacked Americans on September 11, 2001. So, Greenspan flooded the economy with more credit, which gave rises to the housing bubble steered by his successor, Ben Bernanke, the Fed Res chairman who could not see the bubble in residential reality prices right before his eyes.
Nonetheless, today's economy is on par with a 1973 economy. Yet, the truth is deeper. U.S. citizens are poorer now simply because there are more workers and thus GDP per capita is way down.
Current per capita income in True Dollars™ comes to T$7,496.31. That is 86.2% below the Q3 1981 interim peak of T$13,957.83 and 97.1% below the all-time peak of T$14,778.32 hit in Q4 2007.
The Chart the Establishment Does Not Want You To See
As long as the capital spending ratio is in decline in True Dollar terms, that is, capital spending per worker, the wages page in True Dollar terms will be in decline.
I have explained many times how capitalism works.
- The return to capital is the source of wages.
Where there is no capital, there can be no wages (e.g., much of Africa). Where there is high capital per capita, there is high wages (e.g., US, Canada, Norway, etc.) and where there is low capital per capita, there is low wages (e.g., China, India, third world, etc). - The source of more capital is increasing return to capital.
- Only under increasing returns to capital, can there be increasing wages.
- When there is a labor shortage, capital spending leads to productive gains, literally amplifying the workers. This leads to increasing returns to capital and thus increasing wages.
- But where there is an abundance of labor, capital spending will be low as returns to capital will be low.
Capitalism is what lifts all from poverty. But as long as Congress supports a massive influx of working-age population capitalism will decline in the USA. Congress only makes it worse with managed trade deals like NAFTA.
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