A few weeks back, Michael Snyder at The Economic Collapse blog looked at U.S. GDP growth rates for the ten years 1930-1939 and the ten years 2007-2016. I didn’t verify his numbers but they seem plausible (referring to “real” or inflation-adjusted GDP). Snyder says:
1930: -8.5%
1931: -6.4%
1932: -12.9%
1933: -1.3%
1934: 10.8%
1935: 8.9%
1936: 12.9%
1937: 5.1%
1938: -3.3%
1939: 8.0%When you average all of those years together, you get an average rate of economic growth of 1.33 percent.
That is really bad, but it is the kind of number that one would expect from “the Great Depression”.
So then I looked up the numbers for the last ten years…
2007: 1.8%
2008: -0.3%
2009: -2.8%
2010: 2.5%
2011: 1.6%
2012: 2.2%
2013: 1.7%
2014: 2.4%
2015: 2.6%
2016: 1.6%When you average these years together, you get an average rate of economic growth of 1.33 percent.
The same! But wait, averaging them isn’t quite right. For math-y reasons, it’s better to take a starting index value like 100, then apply the growth rates year by year. I did that, and
- Real GDP grew 10% from 1930-1939.
- Real GDP grew 14% from 2007-2016.
Still not much difference! The point remains that the last 10 years have been super lame. President Obama was perhaps the first in U.S. history to never have a single year of real GDP growth over 3%.
And it’s possible that Obama’s record was yet worse. Remember, in recent years they’ve been padding the GDP numbers. They directly added nonsense to GDP. They also under-estimate inflation, which artificially boosts the growth estimates.
But for now, let’s stick with official numbers (where Obama’s overall record is nearly as bad as a Great Depression), and pivot to look at unemployment.
You may wonder: if we’ve been in a depression, how could the unemployment rate be down at 5%? The difference from the 1930s is that, in our time, the Establishment (or Political-Financial Complex) has been determined to fool people – to boil the frog (us) slowly, so to speak – and to cover for President Lightworker. Thus,
- They let him jack the national debt from $10 trillion to $20 trillion. Even a monkey could make GDP seem halfway-OK for 8 years, if you gave him a $10 trillion credit card.
- They had the central bank (Federal Reserve) conjure trillions of new money from thin air and inject it into the financial markets. It’s chicanery, but people say “At least my home and 401k are up.”
- And they baked the unemployment statistics. Remember, the official 5% number hides a huge decline in Labor Force Participation, plus full-time jobs being replaced with crappy part-time jobs.
- If you add back the people who left the labor force in despair these last ten years, real unemployment is 11-12%.
- And if you add the extra part-timers (assuming they would rather be full-time), it’s even worse.
Depression 2.0 has been with us, all this time. It’s part of why people were so unhappy with Queen Cersei in 2016 (who ran as the Establishment’s poster child).
What does all this bode for President Trump? Probably not well.
- He’s trimmed back some of Obama’s growth-killing regulations. That will help.
- And his infrastructure spending may go to productive works (unlike Obama’s 2009 “Porkulus” package), if he can get it passed. He wants to revive American manufacturing, which would be good.
- BUT, with so much debt on the books and so many Americans expecting handouts, our underlying economic problems are worse than ever.
Trump has inherited a sinking ship. The next recession should be a roller-coaster. If the American Left is krazy and violent now, just you wait.
Then again, maybe our leadership will hit on the solution quickly (a Free Enterprise system with smaller government, Rule of Law, sound money, cutting the Welfare-Warfare State, letting Washington and Wall Street fail, letting Main Street pick up the pieces). And maybe our leadership will use the media skillfully (plus a few well-placed arrests) to transition people’s minds to all that. Don’t tell me I’m dreaming.
OK, I’m dreaming. Time to buy more ammo.
Stunning. (Always wanted to use the word but I think it applies)
When I was 10, I played Dungeons & Dragons. I think I had a fairly good idea that it wasn’t real.
When I was 20, I played Cyberpunk. I honestly didn’t believe that 2020 would really turn out like that.
Pretty sure I should at least have my datajack by now, though honestly there’s nothing on the ‘net worth jacking into.
Jeff, you wrote: “But for now, let’s stick with official numbers…” That makes sense in context. But, what you linked (and wrote) is really important, so I hope you don’t mind my adding it here.
Rigging the GDP statistics
Posted by Jeff (ILoveCapitalism) at 5:06 am – August 5, 2013.
I’ve commented before on how the government has changed its methods over the years for calculating the economic stats, to make itself look better.
For example, consumer price inflation has been running about 8-9% per year under the 1980 method. I don’t claim the 1980 method is right; but the government claims only 1% CP inflation from its newer methods, and that number violates many people’s first-hand experience of rising prices and declining living standards.
Or with unemployment: by 1930s methods, it has been running 15-20%, which means we are already in the Great Depression 2.0. Again, I don’t view the older method as sacred; but that number fits many people’s experience better (as they have been forced into permanent unemployment, part-time work, etc.) than the government’s claim of 7.4% unemployment.
The people who change the statistical methods always have excellent-sounding reasons. There’s just one problem. Their changes always run in one direction, to make the government look better.
One bright note, ammo sales are up…
Every little bit helps GBP.
This information matches my perception of the last 10 years. But let’s go further, what has the global GDP been like? I suspect it’s been poor as well. These next thoughts will seem random. In 2005 the Republican congress passed a bankruptcy reform bill. This bill included the equity in a property in a debt discharge. In the spring-summer of 2008 the price of oil rocketed up to 130/bbl . Those of us who produce oil couldn’t see a reason for it, supply and demand seemed balanced.( As a aside, since I make thru tubing bridge plugs, my work dried up. Literally any old well can be profitable at 130/bbl.)In response to sky high prices for oil, transportation fuel shot up.People began paying for gasoline with their credit cards.Income didn’t go up to match increased costs. A fair number of people on lower income scale stopped paying their mortgage, to pay their credit cards. The rest is history. The same situation still exists, but worse. We are older,more in debt and more dependent on government than ever. Can Trump change things for the better? I think so, but I am not certain. As for the oil industry, at.least we know he doesn’t hate us, so.we are slowly going back to work, with. smaller profit margins. Keep buying ammo.
Matthew….my response was looking to work out to a three or four page essay, but let me boil (distill?) it down: You’re just right.
On the plus side, notwithstanding the perceived consumer demand, ammo prices are staying remarkably stable. I even just got spam from LAX trying to sell me factory 9mm for under $10/box.
Why not.. Its cheap now. And keeps for a long period of time, ammo that is.
While I agree that gov’t policy has a yuge impact on economic activity (two-edged sword: lots of regulation is good for lobbyists and lawyers), the sluggish economy has roots going back a long way – even before BHO was some sort of “community organizer” (who wants to live in a community that needs “organizing”?).
While I am clueless as to solutions, it seems to me that our biggest problems are:
1) reliance on growth (nothing goes on forever)
2) loss of work ethic (poverty of spirit)
3) uncontrolled immigration accompanied by productivity growth
4) financialization: wealth from handling other people’s money (not from producing anything useful)
5) regulatory capture (i.e. crony capitalism)
6) lack of ethics: make money regardless of collateral damage*
7) inability to face reality (e.g. replaced by robot at McDonald’s? No worries, retrain as a molecular biologist!)
8) over-investment in unproductive sectors (see college, healthcare)
9) widespread socialization of costs
10 ) and so on.
I think we’re at the point where the ground shifts under our feet. The costs of automation is dropping like a rock and automation is getting a lot smarter.
Automation began to eliminate a lot of jobs decade ago (remember when Ma Bell introduced direct-dial long distance?) but it’s now rolling into “customer-facing” jobs (McDonald’s rolling out thousands of self-serve kiosks in the next year or two). Amazon (and we used to think Kodak, AT&T and IBM were predatory – how quaint).
Automation is starting to get good at jobs requiring dexterity (like picking berries) and move into analytical fields (e.g. radiology, finance, law).
The improvements in automation will happen no matter what (save for a Carrington Event or EMP attack). The thing that bothers me is that policymakers don’t seem to acknowledge what’s coming.
When people have nothing to do, they don’t sit around writing poetry or composing symphonies.
—
This story has two features: the unanticipated consequences of government regulation and rapacious capitalism by people with no conscience.
* https://www.usatoday.com/story/opinion/2017/06/20/rigged-system-rips-off-port-truckers-editorials-debates/103015290/
#8, KCrOB, I agree mostly with your statement, it’s just commonsense & I think there is a lot of greed (rapacious capitalism) which can be dynamic & unfair at the same time, but I think it’s important to note that in an under-regulated society things always sort themselves out. The market decides, meaning that if something is bad it goes bust, which I’m sure you know already.
However; when a globalist gets their hands on a nation state people are actually put out of work unfairly & a micro-managed economy suffers (Thanks George W./Obama).
I think it’s important for me not to criticize normal competition, rat race hysteria that comes with a vital & again, dynamic society which does need promotion by a government & a leader whether they can directly affect the ups & downs or not. Recessions, bull markets, prosperity & periodic decline are all part of a healthy system. Hong Kong, before the foolish British allowed it to revert to China, was an example of a society that was promoted but left pretty much alone.
Society & individuals must remember that adaptation is key to success. Left alone by a government to prosper while a free but slightly protected market is encouraged will show us that again America can prosper as it has in the past.
Altering society, naval gazing towards groups looking for entitlements & actively structuring a nanny state is a formula for failure, unless someone else is paying for it. No one else in the world is going to pay for the Democrat vision of an Orwellian authoritarian first world hell hole. Which is fine with me because I don’t want to be a non-individual in a boring, listless nanny state.
Hanover (#9), I don’t see how the British could have kept Hong Kong. Their lease on it, from the Opium Wars, ended, and the PRC (which I am again calling Red China as I think they’re reverting back to their communist ways from their economic liberalization period) wants everything that was ever in history China in its own control.
But your main point of minimal regulation, with promotion by the government, producing excellent results is a good one. I think all Hong Kongers (I think that was the term) and the rest of the capitalist world, are worse off from the end of the lease.
Hi ILoveCapitalism,
Why do you start in 1930 (after the Great Crash & the start of the Great Depression) and compare it with 2007 (before the 2008 Recession begins). At the moment you are not comparing apples with apples. What happens to your analysis if you start each of the series at the same point (more or less) in the business cycle. So, use as your start times, 1929 and 2008, or 1930 and 2009.
How much would this affect your results? What impact do you get when you measure like with like?
#10 TheQuietMan. They could have kept Hong Kong. China would have a made a big stink about it but at the time there would have been nothing China could have done. China was & still is a paper tiger. In a naval conflict Japan could probably smash them & a large army is useless in today’s world. It’s just a target.
We are “told” by hysterical & incorrect world media, i.e., BBC, Reuters, etc., that China is more powerful than they really are. They are often called a superpower. They are not, not by a long shot. They’re new carriers? One is a refurbished Russian model, stupid design, not practical & just plain odd & they’re making a second one of the same design. This from a people who barely have the actual expertise to fly craft on & off a carrier. Not joking. This from a people barely off the industrial revolution train, two centuries behind the Western world & desperate to steal their way into competitiveness. Ain’t China great?
I remember Prince Charles’ big crybaby boo boo face during the reversion ceremonies. He knew that there WAS no Hong Kong before the British. But his government made their choice. To naval gaze inward towards social democracy entitlement programs, instead of retaining its important outposts & small colonies. But in the long run they couldn’t have maintained the wherewithal needed to keep Hong Kong, without jettisoning their socialist ideals & laying down the law on national identity & preservation. Which is a shame because Hong Kong as a colony was more than willing to keep its independence, wield its massive wealth to oppose China & in a pinch they were indeed willing to ALL migrate to a new colony (Mexico) with their wealth. Water under the bridge now. Ya snooze you lose. I worked for HSBC at the time, so I was a bit upset.
Once useful benchmark is the creation of the Federal Reserve, which was supposed to protect the value of the currency and provide stability. The benchmark US$ now is less than $.02-equivalent then. And relative to the actual buying-power of $20/oz.troy it’s maybe one-fourth that now.
…But Herr Doktor-Professor Krugman assures us there is no inflation.
Finally someone did the research. I kinda thought it was worse then “they” let on
I found this interesting article that says:
@15: CCP – Funny how presidents, governors, and mayors can’t wait to claim credit for good economic news but when things go poorly, they’ve nothing to do with anything.
@9: Hanover – my concern with competition is the line between “fair” and “unfair”. These days, there are a lot of thumbs on the scales.
I read the other day that GE has enormous unfunded pension liabilities. They failed to fund their pension plans to repurchase stocks in order to increase stock prices. So, in the interest of shareholders, they’ve increased the risk that, in the future, the gov’t will have to bail out their pension plans and/or screw retirees who were promised a pension as part of their compensation (the socialize the cost part).
While I’m a fan of Amazon, I wonder what the downside will look like as AMZN gobbles up more and more of the retail sector. How many abandoned malls and unemployed people we’ll end up with? Will we be better off or worse off?
And finally, as un-PC as it is to notice, there is the Bell Curve. The idea that people can adapt and prosper relies on the Lake Wobegon notion that all the kids are above average. They’re not.
John Derbyshire has (IMHO) a brilliant take on this (sections 5,6,7):
http://www.johnderbyshire.com/Opinions/RadioDerb/2016-03-18.html
#16 KCRob, There is always a concern with these matters that’s why our govt anti-trust boys target companies that get too big for their pants, cornering a market. I remember when Microsoft was targeted under the Bush Admin.
I’m concerned with the Amazon food industry buys also, but I see society changing its buying habits as a separate topic. If I could easily get a good price & have it delivered to my door without having to deal with morons trying to ID me when I buy beer or treating me like a thief as I try to leave; I’d do it in a hot minute.
The smaller food chains in cities are having a time competing with Walmart & Target. I wouldn’t worry too much about it as the market always sorts itself out. If there’s a niche there’s someone willing to fill it out. Unless it’s in a bad neighborhood.
I use an analogy like cable TV. Nowadays, each channel has their “specialty” to offer. A specific series or something that people want. That’s their money-maker. A store like (food store) Macey’s has a great deli section. Another store might have wonderful baked goods.
Pensions are never guaranteed, as you know.
I found this graph interesting too.
Speaking of cable TV, Hanover. A tree branch fell in our backyard on Thursday night. We called our giant broadband provider who have the Government-regulated monopoly on cable and internet in our area and tried to get them to fix the cable the tree branch had broken. They promised to call back Friday morning to let us know when we could expect a repair crew. They called at noon Friday to say they would come at 8:00 Friday night (after someone missed half a day at work waiting for their call). Nobody shows or calls Friday night. Call again Friday night, they claim they came by and no one was home (HS) and promise to call back Saturday morning with a new time. No call Saturday, we call them, and they say they can’t do Saturday but will try on Sunday.
I also called a local tree removal service to see about cleaning up the fallen branches. They said they would be here at 1:30 Saturday. They arrived at 1:15.
Competition > Government-regulated monopolies.
It’s my impression that ISP’s get around the anti-trust issues by whining that there are plenty of other companies in the US, VtheK. I hate them. My only recourse is to punish them in my own way by not subscribing to their cable TV & just doing internet. I’ll just fairly anonymously say that with a handy VPN I get whatever I really want to watch & I get on with my life. As for local broadcasts a nice antenna (RCA) from a Radio Shack that hasn’t disappeared yet solves the issue. It’s my petty way of sticking to what can’t be fixed, yet.
Are you serious, CCP? Where on your godhs green earth have you been for the last 8 years? Or are you just that friggin blind and stupid? Your Precious Lightbringer…He Who Can Not Do Wrong…He Who Is All Knowing…damn near destroyed offshore oil and inland oil in the United States during his reign. FFS, pull your head out of your nether region and WAKE UP!!!!
#21, what people like Cas and other ignorant Progressives don’t get is : without the surge in evil oil production (which happened in spite of Obama, not because of him), the GDP numbers would be .75 basis points per year lower, a full on depression. Funny that.
22. I know. It makes my heart proud that because of American ingenuity WE control our future now. Not Arabs. Not Europeans. Us. I’m thinking the reason the left hasn’t tried to make this the Lightbringer’s doing after his attempts to destroy us is because it’s evil oil.
Cas also just proved to us they are not intelligent enough to do the math.
Hi TnnsNe1,
Did you actually read my comment at #11? If you did, you appear to ignore what I was talking to ILoveCapitalism Capitalism about. What are you talking about?
And as for math skills… if the average growth–let us use ILoveCapitalism’s cherry picked numbers–is 1.3% on average, and we use your average growth per annum number of 0.75% 1.3 – 0.75 = + 0.65% real GDP growth per year.
One definition of a Depression is a a recession (negative real GDP growth for two or more quarters) with falling prices. Or a really long recession, etc
“the GDP numbers would be .75 basis points per year lower, a full on depression. Funny that.” Yeah, it is funny tnnsEN1/TnnsEN1… because your math doesn’t add up…
Always nice to see you, Cas.
Hi CrayCrayPatriot,
Likewise.
It has been an interesting few days 🙂
Cheers!
ILC,
We are all in this sinking ship together. Some of us are determined to throw freight overboard and limp into port and other believe that more freight will save the ship.
Trump, I am beginning to believe, has set a great deal in motion. He is determined to streamline the electronic interface of government and has set the winners of the internet age loose on figuring it out at little or no cost to taxpayers. I know you remember how the Obambi people fumbled around designing the computer programs for Obambicare which crashed and burned in the first 20 seconds.
Trump is using bankers to build a parallel structure of “local” banks” to source local economies and setting them apart from the Dodd-Frank leviathan banks which feed the gapping maws of Wall Street, Hedge Funds and globalists. Think of it as a return to a system of savings and loan organizations.
Due to Obama’s neglect, Trump has many more judges to appoint than Obama appointed. He is also studying how to break up the liberal circuits and isolate the trouble-making judges.
Sound money requires manageable debt. But sound money is not possible so long as states run up unmanageable debt. Trump is planning to return to sending block grants to states instead of paying federal funds directly in state projects. That will require the states to fund their programs as best they can rather than have a direct pipeline from the US Treasury.
Welfare will be a state problem with block grant money from the federal government rather than open ended entitlements. The oldsters may find that it is better to stay in Queens than it is to go live in a trailer village in Florida or Arizona.
Trump is not very much oriented toward warfare. His military building will bring a lot of jobs to the United States as he makes sure we are back to being the 800 pound gorilla in the world.
Frankly, I think he is exactly the guy to simultaneously manage a series of huge, dissimilar projects. So are his kids and his close associates. He has every reason to keep out of Tillerson’s domain and Tillerson has more than enough management genius to know how to interface with Trump.
I am delighted that James O’Keefe has busted CNN wide open and now CNN is choking on its own vomit. It think it is symbolic of how things can go Trump’s way. Just recently Trump was ballyhooed in the MSM for not having taped Comey. Well, you can be darned sure the NSA did. They taped and released Trump conversations with Germany, Australia, and Canada. My guess is that the Trump underground has the NSA tapes with Comey and he twitted his chirps to get the MSM riled up.
The point is as it has always been. Trump and his associates have played on the roughest of fields with crooked politicians, councilmen, mafia, unions, financiers, building competitors, zoning boards, the EPA, and more. Everybody wants a piece of him and everybody thinks they can outsmart him. But like the Wal-Mart Walton enterprise, the Trump family enterprise has experience, failure, tenacity, and success to inform them and that is how moguls become moguls.
Jared is off quietly and discretely working with the Netanyahu associates on the Palestinian mess. That is the old school role of the plenipotentiary. He is without portfolio which insulates him from Trump and Tillerson, but everyone in the game knows that he carries the essential weight. I won’t speculate on his mission, but he has as much access to information as anyone could be given and he has King Salman and Salman’s son (now the Crown Prince) and el-Sisi and the King of Jordan and the King of Morocco at his side. No one wants the Palestinians. So, whatever is being worked out is likely a two-state solution with Palestinians being treated like Germany and Israel after the armistice. Instead of the Useless Nations settling the Palestinians down, I can imagine the Saudis, Jordanians, Egyptians cleaning them up and building an infrastructure and ultimately controlling their “neighborly” development. No Hezbollah, no Muslim Brotherhood, no Hamas, etc. The time is ripe for the Muslims in the Mid -East to drive the lunatics out. No other dictatorship is looking at Iraq, Syria and Yemen and thinking that is for them.
These are all huge objectives, but I believe Trump and his team have them all on the planning board. If you think about World War II what the United States had to keep track of and engage it and then realize that the war lasted six years and we were in it for three, it should be cause for some optimism.
Key among all objectives must be the death of globalism in which nationless economic entities control way too many destinies.
Thanks Heliotrope, and I agree.
Interesting, will keep my eye out.
Which is astounding. Lefties are so good at rigging things via installation of personnel. I know the Senate held up the Lightworker’s SCOTUS nominee, but they couldn’t have held up all the others, so… why did Obama neglect so many vacancies?
That’s a good point. In today’s world, the Fedgov tacitly backstops all the states’ debts; plus Freddie Mac, Fannie Mae, Ginnie Mae. So we should really add those to the national debt. Under normal accounting standards, a corporation must count all the debts where its guarantee is expected.
ILC,
Try this decidedly slanted analysis of the 107 judge vacancies
Obama left for Trump to fill. The truth is not in it, but I don’t know any facts on the issue.
http://www.wbur.org/news/2017/02/01/federal-judgeship-vacancies-trump
Helio – Slanted or not, it warms the cockles of my heart. 🙂
Matthew:
That’s interesting, because I’ve been hearing that oil’s energy density is dropping. We’ve used all the “easy” oil. Heard that, 100 years ago, the ratio was 120:1 in terms of how much energy you got from oil vs. how much energy it took to produce, refine and distribute. But 30 years ago it was more like 30:1, and today it’s more like 5:1. It would tie in with the dropping profits that you see. I’d love to know your thoughts. I may post on it, at some point.
KCRob: Our biggest problem, in my mind, is widespread intellectual and financial dishonesty. People have become detached from reality and much too willing to do the stupid, short-term, unethical type of “greedy”. (As opposed to the productive, value-creating kind.)
In my mind, it ties to ending the gold standard in 1971. (You can trace the decline of the U.S. middle class to that year.) But as cause, or as effect? In other words:
– Are people unreal and dishonest because we turned to fake money, and having the Fed give us a financialized bubble economy? (Which could never happen under sound money, or even under *steady* 5-7% interest rates.)
– Or did we turn to fake money and the rest, as our culture/people became more unreal and dishonest to begin with?
As to automation, the answer is always the same: People will create plenty of new jobs that you couldn’t imagine – If only government will allow them to. It’s been going on for hundreds of years. The cause of long-term unemployment is always a lack of job *creation* – which is caused by over-regulation, over-taxation, etc.
Cas:
Please. The idea is compare the 10 classically-recognized years of the Depression (note that 1929 was a decent growth year, the last of the Roaring 20s) with our own most recent 10 years. Our own should be a lot better. But they aren’t!
You’re welcome to do that calculation a year from now, i.e., once you have the 2017 data. Or to do it right now, using 1929-1938 against 2007-2016. The result will be much the same (again because 1929 was almost as GDP-positive as 1939).
This is “that thing you do”, Cas – picking at something minor or that makes little difference, to avoid your having to address the main point. One would expect/hope our last 10 years to be much better than a Great Depression. They haven’t been. Only a few GDP percentage points better. Whether you use 1929 or 1939 (or 2007 or 2017) will change the result only a little; and will change the main point not at all.
CCP:
That’s fair. In mentioning Obama, I’m partly just bowing to conventional belief (that the President does get blame/credit). But I can also make a case that Obama’s (and the Fed’s / Bernanke’s) bad policies did have something to do with his extraordinary anemic “recovery” from 2008.
In fact, I’ve been making that case for years. The fundamental cause of recessions is, the accumulation of deadwood in the economy. Bad loans, badly run businesses, businesses that were never viable, etc. Recession is, or should be, a time when people recognize those losses. (Charge off the bad loans, sell the mis-used or under-used assets cheaply to better businesses, etc.). Then the economy can grow again.
But if you don’t let that happen…that is, if you cut short the recession with policies of “stimulus” and ZIRP and QE (Bernanke) on the principle that no one should have to feel like a failure…and you add a ton of job-destroying, costly new regulations (Obama) on top…then of course you will get a zombie economy. Natch. The economy *can’t* grow much, under those conditions. There are no historical examples, where an economy has.