The Decline Of America's Economic Model In 1 Simple Chart

Tyler Durden's picture

"You can't eat GDP, and you can't live in a rising stock market" is the striking phrase from NY Times' Neil Irwin as he offers the most damning chart of the decline of America's Economic Model (and dream). As we have explained vociferously, the most important thing to understand about today’s economy is: Around 1999, growth in the United States economy stopped translating to growth in middle-class incomes.

 

The choice, by Greenspan and carried on by his followers, was to enable the financialization of the US economy for the benefit of the few, at the cost of the many. As Irwin concludes, and we explained previously, Americans feel disappointed by the economy; the new data show that they have good reason.

Source: NY Times

*  *  *

Perhaps, just perhaps, Rick Santelli was right after all...

"This is America! We don't follow consensus, we set it!"

This is what Santelli is upset about... Who is the Fed working for? Main Street or Wall Street?

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Cognitive Dissonance's picture

When it was no longer convenient for the elite to maintain the facade (1999) they simply let the curtain drop to expose the brick wall behind the stage. Now shut up and get your butt off to one of your 3 part time jobs slave.

<At least now we know for certain who we are working slaving for.>

kowalli's picture

You know only the main peppet - Obama, We need to find all slave masters... and it's hard to do...

MASTER OF UNIVERSE's picture

Just follow the yellow brick road, kowalli. Follow the money, and the monied ruling classless Kleptocrats all the way back to their stash of bullion. Here you will find 'all the slave masters' and their cronies all huddled around their gold whilst heating a can of soup up on a tin of Sterno in order to save on heating costs. Look for the anal retentive money hoarders that look like they don't like to spend money. Think like Scrooge and you will likely find Alan Greenspan heating up soup with a tin of Sterno as a heat source on a cold winter night. If you start now you might make it to Greenspan's house by Christmas Eve.

Newsboy's picture

John Michael Greer, the "Archdruid" looks at the collapse of the current power structure, due to elites being unable to sacrifice, in order to maintain the order which supports them. This is the second Dark Ages America essay in the series.

http://www.resilience.org/stories/2014-09-18/dark-age-america-the-end-of...

MASTER OF UNIVERSE's picture

That was a pretty cool article by Greer, thanks. Throughout the whole read I kept thinking about the maintanence costs of the present Ebola outbreak and wonder if Greer might be missing that key factor in his general thesis regarding the cycling of civilizations. North America is about to lose approximately half our present population if the present

statistics on Ebola fatalities holds the same exponential trajectory that we are seeing this week. If we lose half the population of North America

the superstructure of governance will implode sending contemporary society into complete chaos and contagion that cannot possibly be controlled by any so-called 'authority' other than starvation and disease.

The Greeks posited a tripartite structure of civilization in terms of the 'acropolis', 'metropolis', and 'necropolis' where the 'necropolis' is the final stage of decay and death of civilization. Translated, 'necropolis' means graveyard. In brief, I do not think that Greer is factoring in the present Ebola outbreak or the fact that Ebola is mutating. Clearly, America is going down for the count with respect to the present superstructure of governance.

OldPhart's picture

Fuck you, I don't want all those people around my house.

People like Alan Greenspan are the direct opposite of people like me.  I have a job, and I'm fortunate in that I'm pretty secure in it.  I'd be one of the last to be fired.  (and that's after considerable thought on it)  I refuse to spend money on anything that doesn't have a direct effect on daily living (other than my grandson).  Our money is being used to reduce our debt as aggressively as possible while buying gold and silver in physical form with immediate delivery.

That said, my wife got sick as shit about a year ago and I was forced to sell about thirty ounces of my silver stash for medicines and other health costs.  Even though silver was only at around $20 per ounce at the time, the silver I sold was bought from my $4 per ounce stash.  What I have left is my $8/ounce and above stash.

Greenspan and his ilk have no concept of sterno as a cooking/heating/alcohol source.  It's only people like me, who are debt adverse, that make use of anything that will reduce their imprint on financialization.

Raging Debate's picture

I respect your practicality Old Phart. Of course the problem is governments can create debt in your name, print new currency and hand it out to buddies and collect the debt using inflation forcing you to pay at some level. Still, one tends to do better being wise on expenditures despite this government forcing a portion of the individual to spend. My bigger angst is the police state, ciminalizing the general population at the state and federal level as an even nastier form of taxation. This crushes confidence and offsets the few productive measures toward that end.

We're sadly also back to taxation without represention with this last 40 year push toward global governance and the more people "check out" as they realize there vote means nothing the more damaging to economies this becomes.

I had connections with the Bush family and in early 2008 I suggested a site for debate to at least anonymously connect citizens with the political class and at times for leadership to postulate viewpoints. I wrote Jeb Bush with the problem of this disconnect and the site idea. He liked it and referred me to Pete Peterson's foundation which is of course tied into other power house foundations like the Rockerfellers. Pete Peterson declined a meeting even with Jeb Bush's referral with his secretary telling me the reason being that "we don't know you." With this attitude how does a citizen attempting to help with a solid plan do so?

In any event launched the site had a great beta but the task had more learning curve than anticipated. Human behavior was more diverse than I realized. I'm continuing on with it but the site will be spend more time with health information and science to improve individual conditions than the focus of politics or finance. More bad things have to happen for elites to wake up that they need participating citizens to have a stable society. In the end, it is all lessons for me in evolution that provided personal growth as a person that were deeply rewarding.

Some bright spots on that site experiment that gave me hope was

1) Wealthy philanthropists noticed and were willing to help and felt the same way as many of us do here on ZH.

2) Not all leadership just shuts out ideas by citizens to improve society.

max2205's picture

Que smoke and mirrors

junction's picture

The robber barons are in charge and the lives of peasants, "residue," are meaningless to the eugenics-fixated druglords who run the USA.  During the first Gulf War, the Saudis called American soldiers their slaves, and they were just telling the truth.  The World Trade Center and the Pentagon attacked by drone jets, Sandy Hook a staged operation at a closed school and then rubbing out embarrassing witnesses to the government orchestrated bombing of the Boston Marathon, including two Navy SEALS and Tamerlan Tsarnaev, who was captured alive before being tortured and killed.  Now, as druglords from Afghanistan to Columbia flood the country with cocaine, the Obama administration prepares for any opposition to the looting of America with the creation of a Skynet program, nation-wide wiretapping, with the FISA court controlled by Nazi admirer Chief Justice Roberts, backed by his accomplice, Justice Breyer.  The USA used to be called America but it is now the "homeland," the exact translation of the Nazi's favorite word, "heimat."  Meanwhile, in the background, the pedophile insiders of the New World Order carry out their degenerate activities, including murder.  When this nightmare ends for many Americans (including tens of thousands falsely imprisoned using illegal wiretap evidence) is anyone's guess.  The 3,000 New Yorkers murdered by the Bush administration on 9/11 are still waiting for justice, justice which has been a long time coming. 

hungrydweller's picture

One of them is going to revert.  If it wages then we have serious inflation.  Buy gold.  If it is stawks then hold greenspanbucks.  Or hedge and hold some of both.

Aquarius's picture

Why would the wealthy start new businesses that necessitate the employment of US labour, especially when the Banks are receiving near interest free money with which they can draw down high profits (through criminal acts) in Risk Free market speculation and the trading of securitized scams built on just about anything?

The order of the civil-structure is being intentionally and deterministically destroyed and the unwashed are incidental inconveniences on the road to a massive global collapse and looming Dark Age.

The insane are running the Asylum.

What to do?

Ho hum

Aquarius's picture

To be complete, I add,

Why would the Banks even loan their cheap money to entrepreneurs to start businesses which necessitated the employment of US labour in a High Risk environment (milieu), when profits can be drawn easily from the No Risk milieu of the FedRes? If the Banks lose, then they just get there losses replaced by the FedRes.

Isn't this clear?

Understandably, it is prefereable for Banks to manipulate and profit in circumstances where there is No Risk, but that is not the general knowledge of the Regulators; But it is the business Policy of those higher up the food chain, which just haqppen to be Bankers.

You must understand, the Bankers are not there to serve the Nation nor the community nor humanity, they exist, a priori, to serve themselves. and they do this extremely well (and screw the unwashed.

Ho hum

Escrava Isaura's picture

Aquarius

This might help:

 

The Western intelligentsia clearly sees where this train is taking us, but is trapped by its Judeo-Christianity-derived commitments to ensure a chicken in every pot for all sentient beings, especially those belonging to its own class.  The solution is to lie and proclaim that there are no limits to growth, that trees can grow into the sky.  To ensure belief in this dogma, the U.S. government has now affirmed that a casus belli can be any attempt, not merely to invade the country militarily, but, inter alia, to destroy its economic domination, to attack its satellite networks, to impair world oil trade, or to prevent U.S.-engendered popular revolutions.  This expansion of reasons for genocide reveals just how precarious our existence is becoming.

 

And while our golfmaster POTUS is keeping his promise to him to be “flexible” on re-Sovietization, we have no idea what may happen once his majesty is dethroned.  Because the latter half of this decade is going to see the true arrival of Peak Oil and the failure by exhaustion of ongoing monetary trickery by the government.

 

Yes, the earth will continue to exist, in the sense that gravity will maintain it in its orbit.  But it is questionable whether higher life forms will persevere in anything like their current lifestyles.  This is the last hurrah for intelligence on our planet after billions of years of struggle. — By theedrich

 

http://ourfiniteworld.com/2014/08/25/update-on-us-natural-gas-coal-nuclear-and-renewables/comment-page-4/#comment-41988

 

 

layman_please's picture

Well stated, Sir. You can extend this to the rest of the global ponzi, not solely to US, although it is responsible for dragging along rest of the farce called world economy.

Comte d&#039;herblay's picture

"The Insane"????

No, way.  They are quite lucid.  Much much more so than the 7 billion of of human bean masses under them.

buzzsaw99's picture

You can’t eat G.D.P. You can’t live in a rising stock market. You can’t give your kids a better life because your company’s C.E.O. was able to give himself a big raise...

the only significant thing about that quote is that it was printed by the ny times and not some lunatic fringe blogger.

Bangalore Equity Trader's picture

Listen. Some of us are happy that many of your USSA jerbs went offshore. We're eating your GDP.(and stealing your puppies)

SAT 800's picture

You can't eat GDP? What if I just fry it lightly? there's too damn many dietary restrictions.

donpaulo's picture

when is that windbag Santelli ever not upset ?

hungrydweller's picture

In today's paradigm, I hope never.

Downtoolong's picture

When he cashes his six figure paycheck for acting like an upset windbag.

 

The Most Interesting Frog in the World's picture

Starting in 1999, growth without massive quantities of printed currency and debt, stopped translating to growth, period. The US economy is no more complex than an individual who lost his high paying job to someone able to do the job for less, China, etc. Instead of cutting back, the fool continues to borrow to maintain his lifestyle. Productivity is down, replaced with debt accumulation.

The correct move would have been to let prices deflate so that the country as a whole could become more competitive. But, no, the baby boomers pampered asses must be kept in the lifestyle they have become accustomed to.

Gen X, Y, Z better wake the fuck up.

moneybots's picture

"The correct move would have been to let prices deflate so that the country as a whole could become more competitive. But, no, the baby boomers pampered asses must be kept in the lifestyle they have become accustomed to."

 

What carp are you talking?

Vendetta's picture

he's just saying what the voices are telling him

MASTER OF UNIVERSE's picture

The MIC knew Americans were broke in 1999. The 2001 911 WTC 1 & 2

downing of the first steel buildings in the world was carried out by the MIC in order to continue building their 'empire of dirt' in the Middle East

oil rich nations. In brief, the Gulf of Oman, Iraq oil fields, and oil rich

Middle East was the express target of the Council on Foriegn Relations

and the USA administration in the White House. Peak Oil reached its date of decline in 1999. The conspiracy to take over the Middle East oil fields was hatched just prior to peak oil in 1999. ERGO we had the decent into hell and WW3 start at that juncture in our collective history.

The MIC realized in 2008 that they were doomed and that's when they decided to release weaponized Ebola so that they could defuse

the masses that will rise up and destroy their hegemony. Absolute power corrupts absolutely according to Smedley Butler and Andrew Jackson. Those that refuse to understand history are condemned to repeat it. Please do not render yourself a victim by ignoring history

at your peril.

moneybots's picture

"Those that refuse to understand history are condemned to repeat it"

 

Those who understand history repeat it to take advantage of it.

bonin006's picture

"Those who don't study history are doomed to repeat it. Yet those who do study history are doomed to stand by helplessly while everyone else repeats it"  (stolen from a comic I found on the web (and can no longer locate)

fallout11's picture

Such was the curse of Cassandra in greek mythology.....doomed to know the future yet be powerless to change it.

GreatUncle's picture

There is an upside and "on a long enough timeline the elites do get a kicking" but it is always the mother of all kickings or worse.

 

Every fallen human civilisation ends up this way and it is always all the known world at the time and in this case it would be everything.

MATA HAIRY's picture

Queen Janet Yellen says "LET THEM EAT GDP"

kchrisc's picture

The American economy did not "fail." It was stolen by the Federal Reserve and fenced to the Rothschild banksters.

Americans, myself included, are responsible for letting them steal it.

We can redeem ourselves buy taking it back.

An American, not US subject.

 

"Guillotine the Fed!

layman_please's picture

if it only would be that simple. they have built the entire social matrix, getting rid of the financial ponzi wouldn't change much. they have conditioned the way of life of the the western civilisation which has been systematically and irrevocably destroyed on purpose.

fallout11's picture

Speaking of the Matrix (movie), which also came out in 1999....in it, the 2nd version of the Matrix (complete with flaws and imperfections to be more believable to its prisoners) is a replication of "The world as it was at the end of the twentieth century." (as stated by Morpheus)

NoWayJose's picture

They forced Gingrich out in November 1998 and since then we have had only a single two-faced party in Washington, who began in 1999 to dismantle the vestiges of conservatism that had driven the economy higher for almost 2 decades.

Ralph Spoilsport's picture

"They" were fellow Republicans who had to get rid of a political liability. Gingrich is a textbook case of political hubris gone wild.

Escrava Isaura's picture

NoWayJose

When I read the word Gingrich, I knew I was reading not a serious person.

When I read “to dismantle the vestiges of conservatism that had driven the economy higher for almost 2 decades”, then I knew I was reading a demagogue spreading lies (indoctrination).

 

First: Reagan filled the White House with the Technocrats/Socialists: The Working Group on Financial Markets (also, President's Working Group on Financial Markets, the Working Group, and colloquially the Plunge Protection Team) was created by Executive Order 12631, signed on March 18, 1988 by United States President Ronald Reagan.

 

http://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets

 

Second: Then, the “Conservative Propaganda” of dumbing down the stupid Americans worked as planned, while Reagan runs the highest debt to GDP ratio EVER (288.5%). And mainly to the MIC:

1980 US Debt: $930,210

ftp://ftp.publicdebt.treas.gov/opd/opdm121980.pdf

 

1988 US Debt: 2,664,392

ftp://ftp.publicdebt.treas.gov/opd/opdm121988.pdf

  

To put US deficit into perspective: Obama would have to run a deficit of about $38 trillion dollars to match Reagan’s GDP ratio.

 

 

"All the perplexities, confusion and distresses in America arise not from defects in the constitution…, as much from downright ignorance of the nature of coin, credit, and circulation" — John Adams, August 25, 1787.

 

 

layman_please's picture

hey, cut obuma some slack! the overlords who run the federal reserve have to approve the money printing first, as belgium can't absorb this amount of treasuries. so it's not his fault per se. and by the way, have some faith, he's only $20 trillion short and has two more years to make it.

Escrava Isaura's picture

layman_please,

I am gonna hold you to that.

 

$20 trillion in two years? I would not want to miss it.

 

Bangin7GramRocks's picture

Gingrich is the most hypocritical douche in Washington. Fucking his mistress while attempting to get the president impeached for fucking his mistress! Fuck off with this Newt Gingrich bullshit asshole!

AdvancingTime's picture

I beg to differ, Newt has lots of competition for that title. Sadly honest decent politicians in Washington are as rare as a hens tooth.

Escrava Isaura's picture

AdvancingTime

 

I beg to differ, too!

 

Chris Hedges: Karl Popper writes this in The Open Society and Its Enemies. He said the question is not how do you get good people to rule. Popper says that’s the wrong question. Most people, Popper writes, attracted to power are at best mediocre, which is Obama, or venal, which is Bush.

 

http://c4ss.org/content/20440

 

Comte d&#039;herblay's picture

U forgot put <sarc ON> .

 

 

armageddon addahere's picture

Catherine Austin Fitts says she was told in 1996 by the head of CALPERS that the big interests had basically written off the US as a going concern, and were sending their money, factories, and jobs overseas. Their next move would be to strip the US economy like a Thanksgiving turkey and leave the rubes fighting over the bones.

AdvancingTime's picture

Those who look closely understand that it is not the 1% at the top stealing the icing off the cake, but the much smaller .1% or .01% that are skewing the numbers and overreaching.

I contend the biggest problem is the massive growth in crony capitalism and corruption in Washington. Much of this can be attributed to the ability of those in control "changing the rules" and positioning themselves to benefit at every corner. In our busy and complex world we have found it impossible to watch all the moving parts. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/05/how-empires-collapse.html

AdvancingTime's picture

 We should understand that demand drives investment, confidence is not the real driver. Lack of real growth is about lack of real demand. Much of the demand we see today is driven by artificially low interest rates and QE that distorts the markets.

 We must differentiate the kinds of economic growth and understand that all growth is not created equal. If you spend money but afterwards have little to show for it you have wasted it. Sadly, much of the money America "invests in itself" each year through government spending and programs falls into this category. More on the kind of growth we need in the article below.

http://brucewilds.blogspot.com/2014/01/false-demand-fuels-wrong-kind-of-...