Wednesday, September 8, 2010

Obama Embraces the "Illusion of Prosperity" Story (Musical Tribute)

September 8, 2010
Text of President Barack Obama's speech in Ohio

Cut taxes, especially for millionaires and billionaires. Cut regulations for special interests. Cut trade deals even if they didn't benefit our workers. Cut back on investments in our people and our future -- in education and clean energy; in research and technology. The idea was that if we had blind faith in the market; if we let corporations play by their own rules; if we left everyone else to fend for themselves, America would grow and prosper.

For a time, this idea gave us the illusion of prosperity. We saw financial firms and CEOs take in record profits and record bonuses. We saw a housing boom that led to new homeowners and new jobs in construction. Consumers bought more condos and bigger cars and better televisions.

I have included long-term exponential trend lines for your consideration.

Special thanks to "jus me" for offering this breaking news in the comments.

See Also:
Trend Line Disclaimer

Source Data:
St. Louis Fed: Unemployed
St. Louis Fed: Unemployment Rate


EconomicDisconnect said...

Instant Classic!

watchtower said...

Congratulations Mark!

Could be that your fame is on a long term exponential trend line : )

Stagflationary Mark said...

GYSC & watchtower,

It was my fame to claim! ;)

In all seriousness, my girlfriend points out that I was not the first to think up "illusion of prosperity". That is true. I've just tracked down the original source near as I can tell.

June 16, 1915
The Imperious Customer

By normal standards war is overcharged by those who supply its wants; but though it were charged double or treble peace prices, the world would yet be cheated. People accept the illusion of prosperity produced by the gold and credit scattered about so recklessly by this grim, fierce customer, and begin to think that he is not a bad customer after all, when suddenly he vanishes as unexpectedly as he came, and business has to accomodate itself to the requirements of peace. Violent readjustments are bad for business.

Violent readjustments are indeed bad for business. Sigh.

Stagflationary Mark said...

The Illusion of Prosperity Blog was created on August 31, 2007.

The unemployment rate was 4.6%.
There were 7.1 million unemployed.

We've come so far!

Here's a trip down memory lane.

September 18, 2007
Law of Unintended Consequences

I had more fun making that chart than any other chart since starting this blog. It holds up very well in hindsight too!

All it is missing is more skiers, bears, and swimmers!

mab said...


Obama got elected as president based on illusions and delusions.

Hope & change??? Yeah right. Change for the worse.

The only change is that Wall Street is better off than ever and Main Street is worse off than ever.

I do sense a disturbance in the "credit" force. I see more pain for Main Street.

Stagflationary Mark said...


Change for the worse.

Yoda-Speak Generator

For the worse change. Yeesssssss.

Anonymous said...

Isn't potus supposed to say "the fundamentals are sound"? When potus talks about "the illusion of prosperity", is it time to
A) head for the hills
B) go long optimism

-jus me

Stagflationary Mark said...

I was working under the assumption that potus was supposed to say that the fundamentals are always better than they appear.

So if potus talks about an illusion of prosperity it might mean I've been way too optimistic!!

Perhaps our potus is embracing "change" just to throw us off though. Wouldn't that be something.

Perhaps we're supposed to all be hedge funds now.

Long optimism and long pessimism! Embrace the volatility!