It's The 2nd Worst Decade In Over 220 Years (And Getting Worse)

Tyler Durden's picture

In 223 years, the average real GDP growth for the USA has been 3.8%. At 1.9%, the 2000-2010 decade was the 2nd worst decade for real GDP growth in the storied history of the United States. The worst since 1790 was the 1930s which was followed by what many hope for now, an explosion of growth that occurred in the 1940s. However, three years in, real GDP growth for the 2010-> decade does not look as good as 'hope' would like it to be. So what is different this time and what 'facilitated' the 1940s recovery? The sad, but very real, truth is... war... but funding that this time will be problem...

 

The 2nd worst decade of growth for the US ever... and getting worse

 

But what "saved" us last time looks a little more tricky this time...

 

Especially given the polarization in DC...

 

Charts: Hoisington and Citi

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Hohum's picture

Why look at GDP in isolation?  In terms of GDP/total market credit debt, it was probably the WORST decade ever.  Even worse, it's an accelerating trend, most likely.

Dareconomics's picture

The true state of the economy is actually worse than these charts indicate.  The marginal returns of additional debt are rapidly approaching zero with the average worker's wages remaining stagnant for the last ten years even with the increase in GDP.

http://dareconomics.wordpress.com/2013/10/23/around-the-globe-10-23-2013/

Mark Urbo's picture

I agree that it is much worse than presented.  At a core level its dying on the vine or already dead.

 

Its all Obama - period.  He came into power at a point in history when the country needed capitalist and quasi free market solutions to near term problems.  Instead, Obama/Jarrett brought socialist policies which have choked the economy to death.

Lost My Shorts's picture

They are talking about the decade from 2000 to 2010 and "it's all Obama - period."  You lost me there.

SilverRhino's picture

It's not all Obama ... it is all STATISTS .... 

 

And if people think that 2000-2010 is so bad ... just wait until they have numbers for 2011-2020 

And I wonder if they have extrapolated those numbers already. 

 

Element's picture

You realize the banking system was broken so badly they resorted to mark to make-believe 'accounting'? And you think some different people and free-market policy would have got around all that like it wasn't there? In Sept-Oct 2008 everyone was warned openly and directly that TBTF zombie banks full of toxic assets were going to destroy America entirely if they were propped up. And that's precisely what occurred and is still playing out.

Harbanger's picture

You're right, they shouldn't have propped up the Banks and let the finacial collapse happen in 2008 rather than later.

RebelDevil's picture

Of course that should have happened, but it didn't. Why?
Because the big banks themselves ARE the ones who have the power, hence why they're "TBTF".
Unbeknowst to the sheeple, Jamie Dimon and Lloyd Blankfiend are the two most powerful people in America, calling the shots and what not. - They tell Obama what to do!
Spread it guys. :)

skipjack's picture

Nice strawman. Stop blaming the "free market" for fairy tales - no one said anything about "like it wasn't there". The pain of closing banks wold have been real, but temporary, and confined to the 1% mostly. Instead we got fascism, enabling the 1% to continue looting the serfs.

Free market policy would have shut down the zombie banks, first in 1987, then in 2000, then again in 2008. We wouldn't be littered with zombie parasitic banks, insurance companies, the healthcare racket, or other corporate welfare queens, if President Harding had been in office at any of those times. Read up on the depression of 1920-21. THAT was as close to a free market response by the government as we've ever had.

 

 

knukles's picture

There's always hope

 

Jump You Fuckers
this change enough for y'all?

Abi Normal's picture

I keep tellin' ya knucks, it's HOAX and CHAINS!!!!  They won't jump till they have to.

BTW, WAR, what is it good for, absolutly nothing (except rebuild an economy)...problem is we shipped the mfg overseas, how quaint!

We're fucked, just waiting for the next shoe to drop.

smlbizman's picture

yea, i dont think they were humping in 85 bill a month+...so apples to apples , i think this will be the second worse deacde after the next decade...

steelrules's picture

And what % of todays GDP numbers are just the money traders skimming off all the cream and not producing jack shit. 

The world economy is  FUBAR.

SafelyGraze's picture

"At 1.9%, the 2000-2010 decade was the 2nd worst decade for real GDP growth in the storied history of the United States"

and just think how bad it *would* have been without the Recovery Act and the QE things and so forth

hugs,
Niall 

Grande Tetons's picture

I notice that right after 1910 or so volatility picked up somewhat. What the fuck happened? 

Dr. Engali's picture

That's one answer. I believe The Federal reserve act of 1913 is the answer you are searching for. Which incidentally coincides with the start if WWI.

centerline's picture

lol.  Yeah, I almost edited it to say that!

Really what I would want to add is that is was the beginning of the terminal phase of the previous cycle leading up to Bretton Woods.  We are well past this same point now in this cycle.  

knukles's picture

February 3(?) the 16th Amendment, federal income tax, was ratified.
Illegally some folks would say as the requisite number of state did not "properly" vote thereupon.  But what the fuck, eh?

Abi Normal's picture

That is is right fucking funny, right there!!!

WWI, ReProgressive Income Tax, the Illegal Fed, all came in that time period, think a coincendence perhaps?  I wonder who was President at that time, hmmm, Wilson perhaps?  Another Fabian..wow, the connections go deep, do they not?

I dunno about you, but I am ready for bear my friend, and those who think we get out of this 'whole', is in de-Nile, baby!  Stick a fork in 'er, she's DONE!

I pity the fool.

Abi Normal's picture

Oh, and lest I forget, there was a certain bankruptcy in the early 1930's ('33 was it?), that we gave up our Sovereignty to a Corporation that is DC?  Do we not have a Corpratocracy ongoing? Or Oligarchy, what's the diff, I guess.

Your names on ALL of your BC's, are in CAPS!!!  Chew on that for a moment in time...

Burticus's picture

+1 to Knukles.  Thanks to the dubiously-ratified 16th amendment, the United State_ can rob the citizens of the states then use this "federal money" to puppeteer the state legislatures, level the playing field between the free & commie states, spend recklessly and usurp its delegated powers.

And the 16th amendment was quickly followed by the bankster-coerced 17th amendment, which changed the election of U.S. Senators from the state legislatures (which gave the states indirect representation in CONgress) to the clueless, easily-misled sheeple. 

It is important to understand that the 16th and 17th amendments castrated the framers' concept of federalism, the balance of power between the states and the general government they created.  Now, all we're left with is the United State_, one huge consolidated, omnipotent, tyrannical gubbermint. Jefferson warned about this happening in his resolutions on the Alien & Sedition Acts, reminding us that the feds were not the judge of their own powers and to bind them with the chains of the constitution (http://press-pubs.uchicago.edu/founders/documents/v1ch8s41.html).

Any plan for saving our republican (rule of law) political system and fee enterprise economic system must include repeal by the states of the 16th & 17th amendmnents and then direct CONgress to repeal the (not really) Federal (with no) Reserve Act.

RebelDevil's picture

"Any plan for saving our republican (rule of law) political system and fee enterprise economic system must include repeal by the states of the 16th & 17th amendmnents and then direct CONgress to repeal the (not really) Federal (with no) Reserve Act."

Na dude. ZH'ers should accept the fact that the current socio-economic-political system is FUBAR, and that we will need to refight the revolutionary war. Only this time it will also be the second civil war.

gbresnahan's picture

We might as well aim for #1 while we're down here.. Am I right?

Abi Normal's picture

Hell Yes!! We're #1, baby!!!

rbg81's picture

The truth is that our race must expand or die.  

We made a big mistake in 1970, when we abandoned the Space program in favor of focusing on problems here on Earth.  In reality, the one thing that can save the Global economy is expansion of humanity into to the rest of the Universe.  If that doesn't happen, we will just devolve back into grass eating sheeple (for real) until the Sun burns out.  It's basically the scenario from "The Time Machine".

RebelDevil's picture

Don't give up hope bro.
The US & EU are just like Rome. Empires that decayed to death.
That doesn't mean humanity is FUBAR if history repeats itself though. We've gone through the dark ages once before, and emerged out it 500 years later. The same is likely to happen again if revolution doesn't take hold within the decade.
  
We haven't expanded into space yet because the global economy can't handle it yet. - Once the world is no longer oil dependent (and also no longer banker dependent), then the global economy will bloom and finally be capable of hauling goods to and from different planets.

 

CrashisOptimistic's picture

It is indeed.

The 1940s had something more important than war.  It had essentially infinite US oil (from the perspective of population size).  We exported that oil and collected money from people.

That won't be happening again.

Abi Normal's picture

Blame the EPA, another Progressive tentacle! We have enough to compete, right now, with the ME, Natty Gas too!  Coal, shit...you're kidding right!!!

We also do NOT have the manufacturing base any more to do the complete job!  Blame NAFTA, CAFTA, etc for that mess, going back to Clinton, right on through, to the other side!  Break on through...

RebelDevil's picture

"Blame the EPA"...
Keep in mind Bejing's smog. Do you want more of that?

The question that comes to mind is "Can we have a ceiling on the rate of consumption and still have a healthy economy?"

centerline's picture

Bretton Woods era coming to a end.

DosZap's picture

Bretton Woods era coming to a end.

 

And an IN THE WOODS ERA is taking it's place.

 

Long, Lime.

Dr. Engali's picture

There's a war coming alright. Some how in the nuclear age I don't think that funding will as big a worry as it may have in the past.

RebelDevil's picture

HAHA and it finally falls in place.
The world goes Wiemar when the world goes to war! The US goes Wiemar if there's a civil war!
That's beyond a doubt now! QE to the moon bitchez!

Jason T's picture

diminishing rates of return on productivity and populaiton growth aint' so hot either.  most important and underated, oil consumption per capita is falling since about 2005.  ..and it ain't coming back.

NidStyles's picture

Wait, how did they get GDP for pre-Fed years? Something sounds like BS here...

akak's picture

Get used to "worse"; it's the new normal.

Clowns on Acid's picture

" At 1.9%, the 2000-2010 decade was the 2nd worst decade for real GDP growth in the storied history of the United States."

Tyler - Let's look at the 2006 to 2016 decade .... we only have 2.5 years to go. I don't think that the cure is going to turn upward in that time, but it would be useful to bootstrap that curve beginning in 2006 and extrapolate it out to 2016.

 

 

DOGGONE's picture

Don't miss the table at the end.
"The Public Be Suckered (that's you)"
http://patrick.net/forum/?p=1230886

FubarNation's picture

The only growth occuring is the pile of bullshit this Administration has been shovelling.

 

That and the debt.

 

Cheers!

adr's picture

The world economy died with the blow off top in '99. Since then only the expansion of debt has made it look like the global economy grew.

Sure the expansion of debt has always made it look like there was growth, but up until 1999 there was real commerce going on. What passes for commerce today is nothing but an accounting trick, pure fantasy.

If inventory is sold, but never really bought, is the profit real?

What I mean by that is everything is based on the car dealership model. Inventory is sold to retail outlets, which is then bought by consumers. Even though the inventory sitting on shelves isn't technically owned by an end consumer, corporations like to mark it as sold and book the profit anyway. As a vendor I am on the hook for unsold inventory. If my product doesn't sell, my retail partners will come calling for me to take back the inventory, or take a huge markdown. It is a myth that when a product is marked down 50%, the retailer takes the full hit.

Payment terms for retailers are 90 days, sometimes as long as 120, and that is based on when the product ships to them, not when the order is placed. Product that comes in August isn't paid for until November, sometimes the end of December. If your product sits on the shelf and doesn't sell, you'll get a call saying you've got to split the discount. Remember, the retailer gets 60% margin at least. Or they pay $8 for a $20 retail product. If they cut the price by 50%, they still have $2, but that isn't enough. They'll make you cover 20% of the markdown and just deduct $4 from the invoice. Now they're paying you $4 for the previously $20 retail, $8 wholesale item.

Notice something there?

The retailer has a 60% margin again!!!! So although the total profit went down 50%, actual operating margin stayed the same. That does wonders for comps, because everyone knows discounted product sells faster. Increased comps means increased stock prices, and the publicly traded retailer wins again. Mr. Vendor gets to figure out how he got hosed and made no profit.

Platinum's picture

I compare the financial situation to a supernova exploding many light years away. By the time we see the light, the event that caused it, has long since passed.

We've been running on fumes for the last decade or so, and now even that is running out and the car's engine lights are blinking but the FED keeps taping over them while Obama does his best Ray Charles impression as he chauferrs this limo (think horrific blacksploitation back to school commercial "limo") as it continues its terminal plunge.

 

I'm vaping Chemdawg '91 for those keeping count.

icanhasbailout's picture

GDP is a bullshit number and people ought to stop treating it as credible, if they want to make sense of the situation.

WallowaMountainMan's picture

"The sad, but very real, truth is... war... but funding that this time will be problem..."

 

there will be peace, not war. sure some small african countries will fight for some time, but the middle east will find peace sooner rather than later. syria will be forced into a regime change, iran will open its borders, egypt will resolve itself into real democracy, and the arab spring will bloom into an unstoppable arab summer.

with arbitrary military intervention by the u.s. of a. now limited to africa, the once mighty masters of the universe will have to resort to feeding the poorer nations like it once did, and, oddly enough, find that people around the world will think bettor of the u. s. of a. for doing so.

as for your who like to have 'rest of the story', be sure to remember to thank that handful of brits who decided that going to war in syria was not a good idea, thereby forcing obamabombastic to ask for permission to do something he otherwise would have just done anyway.

the peace dividend is on its way.

i know, i know...i said this a couple of months ago, but with all these newer folks around, i thought i'd say it again.

for the record.

:)

Gumbum's picture

There is a difference between now and then that most people seem to understate or disregard entirely.

The world was sitting on a mountain of resources back then...but thanks to the need for growth and consumption in our economy, we have, like a cancer, gobbled up the world. Nothing grows forever...especielly not something that grows exponentially. We only get to consume the world one time.

RebelDevil's picture

Sure something grows exponentially, "Forever", it's population. One big driver of consumption right there.

SheepDog-One's picture

The 'explosion of growth' in the 1940's was due to post war industrial production. No such luck in this case.

RaceToTheBottom's picture

"2nd worse decade in over 220 years"

 

Kind of an indictment of Keynesian thought, isn't it?

Oldwood's picture

Does this mean we have finally reached utopia? Statis and equality mean zero growth and zero decay, which surely must be every utopian's dream.