The Flatline Economy

If you take inflation (however understated the official statistics might be) and population growth into account (i.e., the red lines on the following graphs), the U.S. economy has essentially been flatlining for a decade (and probably longer).

Then again, maybe I'm just using the wrong data. Or not.

Comments

[adsanalytics]

Another way to look at the stagnation in incomes is as a ratio of total added value (after the jump below). With the increase in technology and globalization, this has trended down steadily over the last decade.

http://www.adsanalytics.com/dashboard/docs/dashboard.php?treepage=tree_definition_main.php&chart=chart_hh_lcav

J.S.

[Tom]

A Flashing Warning On The "Unintended Consequences" Of Ultra Easy Monetary Policy From... The Fed?!

http://www.zerohedge.com/news/flashing-warning-unintended-consequences-ultra-easy-monetary-policy-fed

The case for ultra easy monetary policies has been well enough made to convince the central banks of most Advanced Economies to follow such polices. They have succeeded thus far in avoiding a collapse of both the global economy and the financial system that supports it. Nevertheless, it is argued in this stunningly accurate paper via none other than the Dallas Fed (and BIS economist William White), that the capacity of such policies to stimulate “strong, sustainable and balanced growth” in the global economy is limited. Moreover, ultra easy monetary policies have a wide variety of undesirable medium term effects - the unintended consequences. They create malinvestments in the real economy, threaten the health of financial institutions and the functioning of financial markets, constrain the “independent“ pursuit of price stability by central banks, encourage governments to refrain from confronting sovereign debt problems in a timely way, and redistribute income and wealth in a highly regressive fashion. While each medium term effect on its own might be questioned, considered all together they support strongly the proposition that aggressive monetary easing in economic downturns is not “a free lunch”.

The National Security Agency's Domestic Spying Program NYTimes com http://www.youtube.com/watch?v=KtxYqpSzrPI&feature=player_embedded

http://thinkprogress.org/climate/issue/
Scenes From An Extreme Summer: ‘We’ve Never Seen Anything Like This Before’

The 12-month period from August 2011 to July 2012 was the hottest ever recorded for the U.S. So far this year, more than 27,000 high temperature records have been broken or tied — beating cold temperature records by 10 to 1. All the while, the U.S. has faced a barrage of record-breaking wildfires, powerful storms, and an historic drought that covers the majority of the country.

(read it all)

Before long, perhaps a critical mass of people will notice that it's all connected and actually DO something about it (or we'll all perish from our inaction and stupidity).

[St.Juste]

WHAT DID YOU EXPECT?

Two major wars, both lost, free drugs for most seniors, open ended competition with the Chinese, what did you expect? The elites have generally caught on, -- finally, they're a little slow, -- and are all falling in line behind Obama ,except for a few hard line advocates of old time slave labor for the masses, like the Koch brothers. They are shrilling for Obama. The Fed and ECB are holding up the stock market until the election, -- do you have another explanation (?), major business news outlets are starting to beat the drum roll of GOP insanity, and various and sundry of our betters are doing their best to set us up for a Democratic landslide. It's about time and a good thing, so get on board. It will take a lot of very good policy to dig us out of the hole the GOP has dug.

[roger]

Flattening, yea but under that lining things are bulging up, same as
California's fault lines.We are fast approaching the 9 billion mark in
population numbers, water scarcity coupled with erratic weather
patterns practically guaranty's starvation for a lot,Capitalism has
brought us to edge of disaster, and when there should a unity of purpose to confront our problems we have a major contradiction, US ideals of freedom and justice opposed to the dictatorial nature of
corporations, the law of dialectics mandate the supremacy of one or the other. The world economic chaos, the decay of the American dream,
the gridlock both in government and society,the suffocating debt burden,the rise of the Robot culture, the increasing scarcity of Earth's resources, the culture of extreme individualism ,the over
extension of the military, with all these problems,one thing stands out clearly, Corporations have a unity of purpose, while the people
are split in antagonistic fractions. Not a good omen.

[Slowtolearn]

Would be interesting to track these data points back to 1970-71 when Nixon freed our dollar from the "Cross of Gold."

[sharonsj]

St. Juste: drugs are not free for seniors. We still have to pay varying amounts. However, not everything is covered. I was prescribed a pain patch and it turned out Medicare won't cover it because it's too expensive ($275 for 30). The price is outrageous and probably 100 times the real cost. The pharmacist told me most seniors who have to pay for it themselves usually cut the patch into pieces to make it last longer. But Medicare will pay for my pain pills without question (and has done so for the last 7 years) although the pills probably will destroy my liver. You'd think that the prospect of a liver transplant would make them rethink the less invasive pain patch, but apparently not.

Before Medicare, I would get my drugs from Canada, where they cost 40-50% less, but Congress put a stop to that.

As for the terrible economy, don't expect Congress or whomever is president to do anything about it. Although with Republicans in charge, our lives will be even worse.

[St. Juste]

sharonsj: Thanks for the info and insight. I had a funny thought. If Bush had only realized how dysfunctional our military is and that they would lose in Iraq, foiling his grand scheme of securing their oil to fund permanent Republican majorities, and though it's hard to believe, lose to the Taliban, he might have struck a nice bargain. Apparently the Taliban have a lot of drugs. It would be a lot cheaper to source them there than from Eli Lilly.

[Aidos]

@Sharon you're not alone...

These RNC protesters are determined to be heard
The family lives in south Tampa, a few miles from the Tampa Bay Times Forum, where all the glitz and glamour of the convention are on display.
Their life is anything but glitzy. Yet they are happy. They simply don't want to be ignored.
"I tell people I'm an M-O-M," Karen explained, "a mother on a mission."
Karen, Michael and her other son, 29-year-old Brian, are protesting this week to remind the candidates and delegates of the needs of the disabled — and to put a real face on the impact of the potential cuts and changes to Medicaid that Mitt Romney and Paul Ryan have proposed.

Protesters are a mainstay of both parties' conventions — though during the past 10 years, both have done everything they can to silence dissent.
They put them behind concrete barriers and steel fences, in locations so far from the arenas that their signs can't be read, their chants barely heard.

Protesting in Tampa was light early in the week, thanks to Isaac. But it's expected to pick up.

Here in Tampa, there are advocates for the poor, college-age idealists, retirees, pacifists and the Occupy Wall Street crowd.

Many delegates ignore or dismiss them.
But Karen Clay refuses to be ignored. Too many people have tried to do that with her son.

"I'm sorry, but disability issues are partisan," Karen explains. "Just look at the voting records."

Paul Ryan's budget proposal called for cutting $800 billion in Medicaid — a prospect Karen finds terrifying.

Nearly 9 million disabled Americans receive Medicaid for everything from medical assistance to help around the house.

Michael, she says, has already suffered from cuts under Gov. Rick Scott.(poster child of medical fraud The Global Economy’s Corporate Crime Wave
http://www.project-syndicate.org/commentary/sachs177/English) )
Karen says the family no longer has a personal-care assistant who used to do things such as take Michael to the store, the park — anywhere he might want to go without his family.
His mother and brother provide most of his care. And to say that is a full-time job is a gross understatement.
Karen believes there is waste in Medicaid, but not in homes such as hers. It is in the hospitals and managed-care providers who overbill and overcharge.(See HCA/MITT ROMNEY http://patrick.net/forum/?p=1215353 )

http://articles.orlandosentinel.com/2012-08-28/news/os-scott-maxwell-rnc-tampa-protestors-082912-20120828_1_disability-issues-protesters-medical-assistance

[Marion Shaw]

I know it is an absurd idea but I wonder
what would happen if nobody showed up
at the polls on election day and therefore
no votes to count for either side.