The Ugly News About The U.S. Economy, Unmentioned In Campaign 2016
Fabius Maximus | Jul 31, 2016 01:50AM ET
Summary: Friday’s news about Q2 confirmed that America is mired in secular stagnation. Here is the worst news, unmentioned in the newspapers. It should electrify Campaign 2016, giving it real meaning — beyond the circus of personalities. That will happen only if you see what is happening and act. If each of us, as individuals, sees and acts.h3 Pictures tell the tale: Compare growth in real GDP since the 2007 peak/h3 h3 Total GDP up 10.6% . Per capita GDP up 3.4%. Over 9 years!/h3
The news about Q2 real GDP was terrible: up only 1.2% SAAR (seasonally adjusted annual rate). The YoY change more clearly shows the trend (less noise): also up 1.2%, far below the slow 2.2% average of 2012-2015. Secular stagnation tighten its grip on America, as it has on Japan and Europe. There is no certain, easy or fast cure.
People often complain that GDP does not match the economics they see around them. That’s correct — it’s an abstraction. But also, we do not live by national GDP. Per capita GDP is closer to what we care about: it has grown only 0.5% during the past 4 quarters. Since the rich (the top few percent) take most or all of that, most Americans are losing ground (real median household income is down 7% since 1999, last available data). High rates of immigration plus slow national growth is a toxic combination.
h3 Conclusions/h3This — and the war — are the big issues facing Americans (but not the only serious ones, of course). They are seldom mentioned in Campaign 2016 — except for brief promises of miracles to come. Instead we get a circus, as seen in both conventions. Personal attacks, heart-warming schmaltz, and balloons and music.
The campaigns are designed by experts using the same science that gives us commercials, films, and TV. No surprise that the campaign is as informative as the Transformers movies. Like the Transformers movies, we loved the conventions.
This is the problem. Our leaders have realized that we are like dogs. Alpo and chew toys keep us happy, while they run America and harvest the bounty produced by its people, natural resources, and modern technology. When we change, becoming involved in politics (unlike consumers choosing from a menu), they will change.
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