Thanks, W, for America's lost decade

[AtheismIsReality]

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/01/AR2010010101196.html?hpid=topnewsl

Aughts were a lost decade for U.S. economy, workers

For most of the past 70 years, the U.S. economy has grown at a steady clip, generating perpetually higher incomes and wealth for American households. But since 2000, the story is starkly different.

The past decade was the worst for the U.S. economy in modern times, a sharp reversal from a long period of prosperity that is leading economists and policymakers to fundamentally rethink the underpinnings of the nation's growth.

It was, according to a wide range of data, a lost decade for American workers. The decade began in a moment of triumphalism -- there was a current of thought among economists in 1999 that recessions were a thing of the past. By the end, there were two, bookends to a debt-driven expansion that was neither robust nor sustainable.

There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well.

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.

And the net worth of American households -- the value of their houses, retirement funds and other assets minus debts -- has also declined when adjusted for inflation, compared with sharp gains in every previous decade since data were initially collected in the 1950s.

"This was the first business cycle where a working-age household ended up worse at the end of it than the beginning, and this in spite of substantial growth in productivity, which should have been able to improve everyone's well-being," said Lawrence Mishel, president of the Economic Policy Institute, a liberal think tank.

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.

Capital was funneled to build mini-mansions in Sun Belt suburbs, many of which now sit empty, rather than toward industrial machines or other business investment that might generate economic output and jobs for years to come.

"The problem is that we mismanaged the macroeconomy, and that got us in big trouble," said Nariman Behravesh, chief economist at IHS Global Insight. "The big bad thing that happened was that, in the U.S. and parts of Europe, we let housing bubbles get out of control. That came back to haunt us big-time."
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The housing bubble both caused, and was enabled by, a boom in indebtedness. Total household debt rose 117 percent from 1999 to its peak in early 2008, according to Federal Reserve data, as Americans borrowed to buy ever more expensive homes and to support consumption more generally.

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[top gun]

Great post my friend!

If we could have only went from Clinton to Gore and then Obama WOW would that have been great!

 

[ASPCA4EVER]

Great post my friend!

If we could have only went from Clinton to Gore and then Obama WOW would that have been great!

Wonderfully simplistic and hard to argue with those FACTS {truth in those details} but I'm sure that SOME around here will argue/say differently

TopGun, you posed an interesting theory; would Al Gore have taken a different route after 9/11...would he have given the chance to get Osama Ben Laden his main focus and allowed the CIA to take him out when they had the chance...hmmm I'm not sure that even he would have been able to stay so focused upon Afghanistan...but it's nice to DREAM!

 

[Stalin]

The US has since the 1960s failed to protect it's working class.

One only has to look at countries like China and India who adopted either communist or strongly socialist policies since WW2 and are now flush with trained workers, booming economies and fat currency surpluses.

Many in this forum like to wax polemic about how the free market is a great success and communism/socialism are a failure, but the facts speak for themselves.

Comrade Stalin

 

[ASPCA4EVER]

The US has since the 1960s failed to protect it's working class.

One only has to look at countries like China and India who adopted either communist or strongly socialist policies since WW2 and are now flush with trained workers, booming economies and fat currency surpluses.

Many in this forum like to wax polemic about how the free market is a great success and communism/socialism are a failure, but the facts speak for themselves.

Comrade Stalin

Really, and here I've been thinking/reading that it was the way in which our UNIONS took control of: labor, elected officials in their specific area {Detroit}, Mafia etc., etc., etc.

 

[AtheismIsReality]

The US has since the 1960s failed to protect it's working class.

One only has to look at countries like China and India who adopted either communist or strongly socialist policies since WW2 and are now flush with trained workers, booming economies and fat currency surpluses.

Many in this forum like to wax polemic about how the free market is a great success and communism/socialism are a failure, but the facts speak for themselves.

Comrade Stalin

You mean like the Soviet Union?

 

[dogtowner]

Y'all don't know why we lost ground in manufacturing ?

Must mean you know know why we became the envy of the world in it way back when either.

Does not surprise me that the WaPo does not.

We used to be the innovators which fed higher tech manufacture which paid a better salary. We, by we I mean the federal government, changed accounting rule on depreciation which had the effect of shortening the RIO window 50% which led to caution on the part of companies to take chances on new ideas.

And the result was losing the impetus to innovate which led to our manufacture turning from high tech to commodity products which dod not demand a good wage to manufacture and no new manufacture for our people to move into.

Government is the problem, not the solution. If not 100% of the time, not far from it.

 

[Mr. Shaman]

We used to be the innovators which fed higher tech manufacture which paid a better salary.

We used to be a LOTTA things....until BUSHCO sold the entire-store!!!!


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[AtheismIsReality]

Y'all don't know why we lost ground in manufacturing ?

Must mean you know know why we became the envy of the world in it way back when either.

Does not surprise me that the WaPo does not.

We used to be the innovators which fed higher tech manufacture which paid a better salary. We, by we I mean the federal government, changed accounting rule on depreciation which had the effect of shortening the RIO window 50% which led to caution on the part of companies to take chances on new ideas.

And the result was losing the impetus to innovate which led to our manufacture turning from high tech to commodity products which dod not demand a good wage to manufacture and no new manufacture for our people to move into.

Government is the problem, not the solution. If not 100% of the time, not far from it.

It also happened to be that a lot of our competitors were either LEVELED due to war and/or transport costs prevented their labor markets from being competitive.

I could create more jobs tomorrow, by having all backhoes scrapped and having people use shovels. Would I be able to pay all the shovel wielders the same amount I paid one backhoe operator? Not without prices going up.

In any debate about labor productivity cannot be ignored. A nation's standard of living is determined by how productive it can make its people.

 

[PLC1]

It also happened to be that a lot of our competitors were either LEVELED due to war and/or transport costs prevented their labor markets from being competitive.

I could create more jobs tomorrow, by having all backhoes scrapped and having people use shovels. Would I be able to pay all the shovel wielders the same amount I paid one backhoe operator? Not without prices going up.

In any debate about labor productivity cannot be ignored. A nation's standard of living is determined by how productive it can make its people.

And yet, there must be other factors as well. From your original article:

"This was the first business cycle where a working-age household ended up worse at the end of it than the beginning, and this in spite of substantial growth in productivity, which should have been able to improve everyone's well-being," said Lawrence Mishel, president of the Economic Policy Institute, a liberal think tank.

As someone who never was a fan or supporter of the past president, I still have to ask:

How is this the fault of GWB?

 

[dogtowner]

The US has since the 1960s failed to protect it's working class.

One only has to look at countries like China and India who adopted either communist or strongly socialist policies since WW2 and are now flush with trained workers, booming economies and fat currency surpluses.

Many in this forum like to wax polemic about how the free market is a great success and communism/socialism are a failure, but the facts speak for themselves.

Comrade Stalin

Commodity manufacture always drifts to the low cost provider. Along that chain were (from Europe) to America, Japan, Korea, Mexico, Canada, China and India (to name a few).

If you could produce commodity products in America for a comprable price it woudl still be done here. But if the higher labor costs here more than covers the shipping and import costs then those items will get made elsewhere. Same as it ever was.

 

[top gun]

Wonderfully simplistic and hard to argue with those FACTS {truth in those details} but I'm sure that SOME around here will argue/say differently

TopGun, you posed an interesting theory; would Al Gore have taken a different route after 9/11...would he have given the chance to get Osama Ben Laden his main focus and allowed the CIA to take him out when they had the chance...hmmm I'm not sure that even he would have been able to stay so focused upon Afghanistan...but it's nice to DREAM!

I seriously don't think Gore would have cooked the intel books the way Bush did and sent us into a full invasion and occupation of Iraq.

I just don't see that as happening. He didn't have the ax to grind that Bush did and he wasn't one for Nation Building.

I think he'd of tightened the sanctions noose around Iraq even tighter and really ramped up attacks on terrorist targets. I think there's a good chance with none of our troops tied up in Iraq he would have sent a bigger force into Afghanistan than Bush did.

 

[AtheismIsReality]

As someone who never was a fan or supporter of the past president, I still have to ask:

How is this the fault of GWB?

If the economy had grown, then GWB would have claimed credit for it. Why would he not share the blame because things went south?

Of course if you'd like a reason, how about the fact that the initiative to increase minority home ownership he laid out in 2002 was the exact blueprint that created the bubble of faux prosperity and wrecked our financial system.

 

[dogtowner]

If the economy had grown, then GWB would have claimed credit for it. Why would he not share the blame because things went south?

Of course if you'd like a reason, how about the fact that the initiative to increase minority home ownership he laid out in 2002 was the exact blueprint that created the bubble of faux prosperity and wrecked our financial system.

He called for no documentation ? I'd need to see a link for that.

Frank Raines validated these sorts of loans by buying the paper (and insisting on having it sent to him). And Barney yelled racist when these shenanigans raised Congressional concern.

But Bush has not refused the "credit" as it was on his watch.