Our Lost Decade Compared To Decades Past

Our Lost Decade Compared To Decades Past


I wrote yesterday about the scant number of jobs created in the last 10 years, but when compared to the past six decades the news becomes that much bleaker.

Wash Post illustrates…

I’m not saying we should have guarantees our overall net worth should go up or that our economy has to add jobs, but when productivity and GDP goes up, jobs and net worth should follow.

Meanwhile, the rich continued to get richer while median wages have actually gone down…

Middle-income households made less in 2008, when adjusted for inflation, than they did in 1999 — and the number is sure to have declined further during a difficult 2009. The Aughts were the first decade of falling median incomes since figures were first compiled in the 1960s.

As I’ve said in the past, nobody’s suggesting that capitalism isn’t the best way to go. But unchecked capitalism that demands more productivity, doesn’t raise wages and allows everybody to overleverage with ridiculous amounts of debt? Sorry folks, but we’ve tried it and it doesn’t work. The markets obviously don’t regulate themselves and something has to change.

So where do we go from here? Genuinely, I’m asking. How can we fix this?

  • http://centristcoalition.com/blog/ kranky kritter

    The especially macabre results for this decade that come when you compare the results by decade are really an artifact of our being at a relative high at the beginning while being at a terrible low near the end. In each case, the average for the given time period is less misleading.

    Funnily enough, it’s the same sort of facile reasoning that led people to say that global warming had disappeared because the trend from 1998 to 2005 was downward.

    Were the double aughts a terrible decade economically? On the whole, yes. Undeniably. But the long-term trend in job growth is not nearly as bad as it looks when you use 2000 as your start point and 2009 as your end point. You guys know that I am usually the one cast in the role of turd in the punchbowl. So when it’s ME who says “it’s not as bad as it looks,” then you know there’s a good case for that perspective.

  • gerryf

    But the long-term trend in job growth is not nearly as bad as it looks when you use 2000 as your start point and 2009 as your end point. You guys know that I am usually the one cast in the role of turd in the punchbowl. So when it’s ME who says “it’s not as bad as it looks,” then you know there’s a good case for that perspective.

    And what kind of trend line would that be? Maybe it’s not optimism, but denial you are dealing with….

  • http://centristcoalition.com/blog/ kranky kritter

    2000 was near a peak in an economic trend. 2009 is at the probable trough of a serious recession. Any storyteller starting at that point A and ending at that point B is going to be a raconteur of maximum woe.

    So Gerry? The point about such data is right there to see if you understand the math. At all. Apparently you don’t, so you want say that I’m in denial? See things however you prefer.

    Personally, I don’t think it makes any sense to presume that the trend is most likely to be best characterized by the difference between a really high point and a really low point. If you understood trend lines, you’d know this, instead of picking a pissy fight.

    But what is it that I’ve said in the past here that makes you think I have any interest in minimizing the severity of the current downturn?

  • WHQ

    Any storyteller starting at that point A and ending at that point B is going to be a raconteur of maximum woe.

    I blame Pope Gregory XIII.

  • gerryf

    Kranky, thanks, but I do understand both math and trend lines. Do you?

    The math is there only for someone who is more delusional than a realist. The problem with your rosy projection is it assumes that what you call a long term historical trend will continue and that presupposes that the factors in place during that trend still exist.

    They do not.

    We have had 30 years of job exportation, shrinking exports, collapsing manufacturing, insane debt spending–need I go on?

    The numbers you are using to build your trend with a little trough are assuming that the US is still the biggest manufacturing nation, the greatest economy, the dollar is the world currency, is not the world’s largest debtor nation, is not overly dependent on foreign oil, and yadda, yadda yadda.

    Rather than acknowledge the ascendancy of China, the European Union and other nations/groups (Indian, a reviving pacific rim, etc) and the FUNDAMENTAL changes in the US from your 70 years of trend, you want to cling to your pithy 80 year trend line and climb up on your high horse and lecture me about being pissy?

    As for what you’ve said in the past here that makes me think you have an interest in minimizing the severity of the current downturn–why is it you just can’t be wrong?

    Are you so freakin’ smart and arrogant that the world must bow down to Kranky Kritter, the omniscient? I don’t think so.

    Pundits are already making scary predictions about job growth and economic rebound and the need to cut spending and stimulus when we need it the most.

    You claim I don’t know anything about math, but I do know history and history tells us that the same kind of “rosy” predictions occurred as we began to claw our way out of the Great Depression and a bunch of “optimists” like yourself said it was time to cut back spending and tighten monetary policy.

    That’s my beef with your post Kranky.

    I know from the past you don’t like all this spending and debt; you should know from the past that I do not, either.

    The difference is that I was saying for the past 10 years as the Republicans ran up outrageous deficits and cut taxes. Now suddenly the right, when deficit spending actually makes sense, has got religion and is playing politics when they should be governing.

    Don’t think I am giving the Dems a pass. The stimulus package was lame and poorly targeted, designed more to feather a few pockets than achieve real, prolonged stimulus.

    All that aside, though, your post about troughs and rosy projections is exactly the kind of tripe that leads to bad policy decisions.

    Are you consciously trying to subvert necessary economic action and policies along with the rest of the “conservative” punditry (yeah, yeah, I know, you voted for Clinton once, yeah)?

    Probably not.

    But posts like yours become part of the irresponsible background noise that leads to everything that was wrong with the past 30 years–a deregulated, unsupervised economic mess with a crippled government populated by people who scream “Government doesn’t work; put us in charge and we will prove it!”

  • WHQ

    More seriously, though, there’s this from the same WaPo article:

    Question of timing

    The miserable economic track record is, in part, a quirk of timing. The 1990s ended near the top of a stock market and investment bubble. Three months after champagne corks popped to celebrate the dawn of the year 2000, the market turned south, a recession soon following. The decade finished near the trough of a severe recession.

    But beyond these dramatic ups and downs lies an even more sobering reality: long-term economic stagnation. The trillions of dollars that poured into housing investment and consumer spending in the first part of the decade distorted economic activity.

  • gerryf

    Kranky, if you return.

    I’ve re-read what I wrote and it came out very snarky. I apologize for that. I’m having a rough week and the tone of my post was rude and disrespectful.

    My points are in there–that the fundamentals of the economy have changed and therefore the long term trend which you are referencing no longer apply (my opinion), but the tactless delivery was out of line.

    Again, I apologize.

  • http://tomgrey.wordpress.com Tom Grey

    The “lost decade” with Bush tax cuts is soon going to look a LOT better than the upcoming stagnation and likely mid-term stagflation.

    1) US workers are overpaid — there is little they do that foreigners can’t do as well, for far less. (This is how the peaceful, free market redistributes income to the poor — new jobs go to the more qualified poor folk willing AND able to do the work for less.)

    2) Tax cut deficits stimulate the economy and, usually, wealth creation; increased gov’t spending doesn’t. Yes, maybe the market will over-invest in production of something, but that leads to price reductions and reduced production. The feedback against over-regulation / over-spending by gov’t is far slower.

    3) Gov’t workers’ mean and median incomes have been going up — the forced economy has been getting bigger. Lawyers income increasing is always a bad sign — too much administration cost for production, not enough produced.

    The Democratic Party’s policies want to do to all America, what the Dem policies have done to California; as compared to more Republican Party policies in Texas.

    Of these, the fact that Americans are overpaid is the uncomfortable truth that will get no US politicians elected on.

  • http://detroitskeptic.com/blogs Nick Benjamin

    Your first point has been true about Germany for decades. They solved that problem by emphasizing quality over quantity.

    And for stagflation we have to have inflation. Let me know when you find some evidence that inflation is actually happening.