Click to enlarge.

**Update:**

Rob Dawg wished to see an exponential trend from 1961 to 1991.

Click to enlarge.

The chart above sums up why there was a question mark in my first chart. If the true trend is an exponential growth curve then we're right on trend for the most part. I just find it hard to believe that the dotcom bubble and the housing bubble got us there.

Click to enlarge.

And lastly, this chart captures the spirit of Rob Dawg's point. It's a fairly good fit. If this is the true trend then there is a bit more fake prosperity than the first chart shows (since the true long-term trend would be bending downwards).

**Source Data:**

St. Louis Fed: Custom Chart

## 20 comments:

Very nice! Of course, this would be immensely disturbing to anyone that didn't already know what we know.

TJandTheBear,

Yeah, but how many people could that be?

For example, there's no way this chart would be disturbing to a PhD in Economics, or anyone else with a firm grasp of long-term economic trends.

The snark must flow! ;)

The air gets pretty thin up in those ivory towers.

Puts a whole new perspective on the probable efficacy of future "stimulus" projects and on how much we can afford right now.

My longtime favorite graph. I wish there was a way to break out quintiles because I'm pretty sure transfers are all in 1st and 5th. Not that it is so wrong to have the transfers to the lowest quintiles and then we'd have to break out the big lie. FICA are not transfer payments.

TJandTheBear,

Fortunately, the ivory towers are sitting on a firm foundation of student loan debt!

Ba-dum ching!

Who Struck John,

That's the $64,000 question(able).

Rob Dawg,

I hear you. The distribution would be very interesting to see. I very much doubt it would turn me optimistic. Let's put it that way.

Mark,

throw up an exponential curve fit 1961-1991. Then the fake prosperity doubles. And you get another fail curve for your gallery.

Interesting:

http://research.stlouisfed.org/fredgraph.png?g=doP

Rob Dawg,

An exponential curve won't fit the data well. I want to keep my exponential trend failure gallery pristine.

I have high standards when it comes to exponential trend failures. Not every chart is cut out to be a magnum opus. Note the tightness of fit. Note the severity of the failure. Note the impossibility of a recovery back to the trend. Masterpiece! Sigh.

My calibrated eyeball says the 1961-1991 data are tight to the 1/e trend that places the 2012 trend line around $52,000 for real PI ex transfers thus doubling the blue area of fake prosperity.

Rob Dawg,

I'm not seeing what you see. If I put an exponential trend line on the 1961-1991 data then it would project a much higher value for 2012. if the actual trend is indeed an exponential one and not the linear one in my chart then it...

1. Won't fit the data nearly as tightly.

2. Will grow much faster than my linear trend, especially if I pull its initial starting point down by including data all the way back to 1961.

I don't have access to my computer at the moment to confirm. I will try it later today though and let you know the results.

No, not all exponential fails are upwardly curving. Exponential fail also occurs as asymptotic (leveling out) or in this case inverse of asymptotic approaching a max value.

Rob Dawg,

No, not all exponential fails are upwardly curving.Ah, I see where you are going with it now. It can't bend downward though, since the overall trend is up.

Rob Dawg,

The new chart's up. I think what you were looking to see wasn't an exponential trend, but a logarithmic trend. I'll post one of those soon too.

Rob Dawg,

Both charts are now up.

R 0.955 not bad for the old calibrated eyeball. Sorry about being a damn engineer. It never occurred to me that log and exponentials were not considered the same thing to some people.

http://www.wolframalpha.com/input/?i=e-e%5E%281-x%29%3D0

e^x=1

Rob Dawg,

I got caught up in the physics of exponential growth and exponential decay.

Deep down, I knew the chart you were looking for though. It just took me some time to process.

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