[LSDDSL]

SINKING ECONOMY vs. NEOCON-ARTIST SPIN

Today's GDP report showed the slowest quarterly growth since 2002. Consumer spending was the lowest since 2001. The NeoCon-Artist spin machine was immediately put in high gear following the report.

The immediate response by some was that the economy had just "hit a pothole." A more accurate statement would be it "fell off a cliff." The DECLINE in the Final Sales number to -0.3 from the previous +4.6 is especially worrisome. Also, the huge increase in inventories gives further indication that much of production contributing to GDP was unsold.

Below is a partial copy of today's GDP report from Briefing.com


Here's a link to Briefing.com's GDP report: GDP

Given that consumer spending is 2/3 of all economic activity, the 1.1% change gives further evidence that the economy is slowing down. Christmas spending would be expected to make 4th quarter spending higher, rather than lower. Had the 4th quarter not included Christmas, consumer spending would have been lower still.

With New Home prices declining sharply to a -3.4%, the source of home equity loan spending is also shrinking. Combined with a yearly decline in real hourly wages of 0.49 %, consumer spending can only be expected to decline further. (Wage information can be found at: BLS: Real Hourly Wages )

In 2005, consumers spent 115% as much as they earned. The savings rate has declined to below 0. Can consumers continue to increase spending when their income is declining and the source of their borrowing is declining in value? Will production continue to increase if consumers' ability to purchase that production decreases? Will capital investment increase if purchase of the production it facilitates decreases?

unlawflcombatnt

EconomicPopulistCommentary

Economic Patriot Forum

[GoveMoony]

Today's GDP report showed the slowest quarterly growth since 2002 ... NeoCon-Artist spin machine was immediately put in high gear
response by some was that the economy had just "hit a pothole." A more accurate statement would be it "fell off a cliff." Slowest growth in 4 yrs is obviously not too good. But it's still growth, so it's not Bad. But you prefer to say it "fell off a cliff"? And then have the gonads to complain that Others are trying to spin the news?

Congratulations! You got my first ever rolling-eyes smiley! To qualify for the cliff comment, an indicator would have to be the lowest in at least a decade, and/or drop precipitously. (no pun!) The economy may be slowing, but if you want any but the "Bush is in office, so the sky Must be falling!" crowd to pay attention, you should cut down on the hyperbole.

[tweriaroats]

1.1% in one quarter and we've fallen off a cliff? Whatever. Talk to be next quarter if we're below 2%.

[HagsPusia]

When wages for 80% of the population can drop by 17-30% and the GDP is not even wobbling, well, that shows you the problem with using GDP for a measure.

[repldoinfo]

10 straight quarters of economic growth.

Spin it any way you want to.

[Ettiominiw]

33 years of straight declines in real wages.

Spin that anyway you want.

[vSzsgifP]

33 years of straight declines in real wages.

Spin that anyway you want.

Touche. This new economy doesn't benefit individual citizen anymore. New technology does though.

[Amirmsheesk]

33 years of straight declines in real wages.

Spin that anyway you want.

Patent lies.

Google IRS income over the last 35 years.

I don't appreciate when people just flat-out lie about things.

[neeclindy]

Patent lies.

Google IRS income over the last 35 years.

I don't appreciate when people just flat-out lie about things.

I did a search and could not find the numbers you mention.

I did find some other info though:

Domestic Funding is Below 2005 Levels and Constitutes a
Smaller Share of the Economy than in 2001 http://www.cbpp.org/1-24-06bud.htm

AND

data from the Internal Revenue Service indicate that disparities in income between those with very high incomes and other Americans have widened sharply in recent years, with the average after-tax income of the top one percent of taxpayers rising $121,000 — or 31 percent — between 1995 and 1997, while the average after-tax income of the bottom 90 percent of taxpayers increased three percent. These IRS data reflect actual information from tax returns. http://www.cbpp.org/9-4-00inc-rep.htm

I find the table interesting: compares the wages for the top 1% in the and bottom 90% over a 10 year period

Year .Top 1% ..Bottom 90%

1986 --$273,562 ..$23,451
1987 --339,490 ..23,834
1988 --448,223 ..23,750
1989 --417,239 ..23,527
1990 --403,753 ..23,145
1991 --357,587 ..22,721
1992 --398,508 ..22,982
1993 --366,150 ..22,757
1994 --369,535 ..22,939
1995 --396,545 ..23,041
1996 --448,704 ..23,168
1997 --517,713 ..23,815

Change 1993-97 Top 1% = 41.4% bottom 90% = 4.6%
1995-97 Top 1% = 30.6% bottom 90% = 3.4%

If you have a link for the past 35 years in 2005 dollars could you please post it?

[AOE6q4bu]

I did a search and could not find the numbers you mention.

I did find some other info though:



http://www.cbpp.org/1-24-06bud.htm

AND



http://www.cbpp.org/9-4-00inc-rep.htm

I find the table interesting: compares the wages for the top 1% in the and bottom 90% over a 10 year period

Year .Top 1% ..Bottom 90%

1986 --$273,562 ..$23,451
1987 --339,490 ..23,834
1988 --448,223 ..23,750
1989 --417,239 ..23,527
1990 --403,753 ..23,145
1991 --357,587 ..22,721
1992 --398,508 ..22,982
1993 --366,150 ..22,757
1994 --369,535 ..22,939
1995 --396,545 ..23,041
1996 --448,704 ..23,168
1997 --517,713 ..23,815

Change 1993-97 Top 1% = 41.4% bottom 90% = 4.6%
1995-97 Top 1% = 30.6% bottom 90% = 3.4%

If you have a link for the past 35 years in 2005 dollars could you please post it?

http://www.inflationdata.com shows inflation over the period 1986-1997 to be 45.16% and the table above shows wages of the bottom 90% increasing 1.55%.
Can that be right?

[Qeiafib]

http://www.inflationdata.com shows inflation over the period 1986-1997 to be 45.16% and the table above shows wages of the bottom 90% increasing 1.55%.
Can that be right?

As a Canadian I am not 100% sure on the source I provided as far as bias etc... but the website did mention that they work with various levels of government concerning budgeting etc.. so I took them as a good source for numbers.

[Attarderb]

Not income, gents.

As income includes transfer payments, bonuses, and commissions which are irrelevent to 80% of workers (See: Wallace Peterson's 'The Silent Depression').
I am talking real-wages, which are down 17-30% since 1973.

See 'The Myth of Free Trade' and BLS data.

Also google 'real wages fall since 1973'.

[freeringtonesioo]

Once gold standard was removed this fiat game began on it's earnest. Top feeds from the bottom. It happens on such a slow timescale that people don't notice it that easily. Incomplete inflation statistics like CPI (which are of no use to common citizen) further distort the picture. It's a big pyramid scheme and it's instigators and collaborators ought to be punished most severely. Study the history of central banks in America and elsewhere to find out where true criminals of our times dwell and what do they do to your money.

[occallExtet]

Actually, the drop in real wages ( a first) was only after the other first- our lowering of meaningful tariffs pursuant to GATT in 1973.

See Batra 'The Myth of Free Trade'.

[foodselfdourileka]

Wages is not a very accurate barometer of incomes, as more people are working more jobs.

If I work one job making $50,000 a year and one job working minimum wage, it makes average wages look shitty.

Median income is the most reliable indicator, as it shows where the people in the middle are.

[Freedjome]

You are confusing effect with cause.

The fall in wages happened prior to the rise in workers holding multiple jobs, which is itself a result of falling wages.

Let's put it into specifics:

For minimum wage to be where it was in 1968, it would have to be now at $8.50/hr.

Wal-Mart, our largest employer post-free trade, pays its workers an average of $8.82/hr.

General Motors our largest employer pre-free trade paid its workers (1973) approx $11.00/hour.

As real wages are the ONLY source of $ for 80% of workers it is the best measure of our decline

[Drysnyaty]

Not income, gents.

As income includes transfer payments, bonuses, and commissions which are irrelevent to 80% of workers (See: Wallace Peterson's 'The Silent Depression').
I am talking real-wages, which are down 17-30% since 1973.

See 'The Myth of Free Trade' and BLS data.

Also google 'real wages fall since 1973'.

Joao,
Earned income is defined as wages, compensation, bonuses, tips, and self employment income. Unearned income includes transfer payments, capital gains, interest, dividends, alimony, unemployment compensation, pension, annuities, ira's, rental income, other passive activity income, and all other income not easily identifiabel. Farm income can be considered either earned or unearned, depending on your activities. S corp, partnership share, etc is also considered either earned or passive depending on the how the income was derived by the pass through entity. However, using IRS data does neither confirm nor deny that real wages have declined or increased. BLS data and NBER research are the best possible analysis to confirm the theory, not the book you described.