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Do not be discouraged by the 2325 target date. If we're really smart, then I believe we can actually reduce wages to zero well ahead of schedule.
Skynet (Terminator)
In the post-apocalyptic year of 2018, Skynet controls a global empire from its heavily-guarded fortress-factories and research installations.
This post inspired by Troy's comments.
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St. Louis Fed: Custom Chart
13 comments:
Holee Crap.
I didn't know wages had been falling like that relative to total GDP.
I knew real wages were down or flat, but that graph makes the trend thus far obvious.
http://research.stlouisfed.org/fred2/graph/?g=2f8 for the official data.
Is it me or is CR on autopilot now? I never go there anymore.
^ 1970 was the last year we had a trade surplus . . .
http://research.stlouisfed.org/fred2/graph/?g=2f9
(red is balance of payments / GDP)
Troy,
I think CR is a smart guy who wants to believe that things will eventually get better. That's got to be draining at some point, especially when most of the people who post comments would argue otherwise.
I would argue otherwise as well. I'm bracing for much more pain. Our problems are structural. Time does not heal all [structural problem] wounds. Sigh.
Speaking of "structural" goddamn Delong censored one of my comments on his blog again.
Now, I'm pretty hostile to economics mumbo jumbo so maybe he's tired of me telling him he's wrong about something I don't understand.
I had to look what "AD" meant in an economics context but I'm getting SO goddamn tired about people complaining about demand.
We only got demand in the previous decade by pumping $8T of debt into the economy.
John Cleese's mention of volts in the parrot sketch comes to mind.
Our "structure" is as screwed up as the soviet's was in the 1990s.
Though I think if the Republicans boot Obama next year they'll make one more spin on the wheel and double the national debt by 2017.
We doubled it in the past 4 years, we're going to have to keep doubling down.
Martingale economics.
Ah, damn, someone beat me to it:
http://www.platform10.org/2009/03/brown-busts-his-bank-playing-martingale-economics/
Troy,
I'm getting pretty tired of the demand argument as well, but "pent up demand" makes me bust out laughing. 30 years of wild spending creates pent up demand? Seriously?
Our country overflows with storage units filled with stuff bought on credit. Just how much more pent up demand can there be?
There is nothing the government can do to get me to spend more.
They lowered rates. I was forced to save more to compensate for the lack of interest. Been there. Done that. Still doing it.
Think I'll head to Disneyland if we combine the deflationary Great Depression and the inflationary 1970s? I beg to differ. I'm bunkered and in fuel conservation mode.
It's just like Japan only with higher inflation and higher unemployment. Splendid. Great job Ben "There Is No Housing Bubble to Go Bust" Bernanke. You sure showed them.
2325 communism - people will just take stuff.
pent up demand - the poor, the unemployed, the those 50% of households that don't pay income taxes, the college graduates without jobs, the doubled-up in the same house, etc, etc, etc
http://research.stlouisfed.org/fred2/graph/?g=2fP
All this chart shows is that we've had a GDP Bubble since the late 70's.
I had to look what "AD" meant in an economics context but I'm getting SO goddamn tired about people complaining about demand.
As someone much smarter than I once said, the only thing more preposterous than supply-side economics is demand-side economics.
nilys,
2325 communism - people will just take stuff.
Hey, we're ahead of schedule on that too!
Charles Kiting,
Ah, the joy of an irresistible GDP bubble hitting an immovable wage wall. Good times.
Despite your terminator quote, I think the graph looks like a light saber.
But I do tend to look at graphs a bit differently . . .
Having store rooms full of already-bought stuff has nothing to do with the current aggregate demand shortage. U6 at 16%, however, has a lot to do with it.
So might all that debt overhang.
Cheers!
JzB
Jazzbumpa,
Having store rooms full of already-bought stuff has nothing to do with the current aggregate demand shortage.
You took my thought out of context. I absolutely agree that the "debt overhang" has a LOT to do with it.
That's why I said...
Our country overflows with storage units filled with stuff bought on credit.
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