The Trump-volution Explained In 4 Macro Charts

Authored by Dr. Constantin Gurdgiev via True Economics blog,

The current growth cycle has been the second longest on record:

Source: FactSet

But it has been much shallower than the previous cycles:

"real GDP growth in the current expansion lags the other three expansions - by a lot. As of the first quarter of 2018, real GDP has expanded by 21% since the beginning of the current expansion; this is far lower than the 36% compound growth we saw at this point in the 1991‑2001 expansion. The chart also shows that the growth path for the longest expansions has continued to shift lower over time; the 1961‑1969 expansion saw real GDP grow by 52% by the end of its ninth year, while the economy had grown by just 38% by the end of year eight of the 1982‑1990 expansion."

Source: FactSet

And here's a summary of why loading risks of recession onto households is not such a great idea:

"Real consumption has grown by 23% since the summer of 2009, compared to growth rates of 41% and 50% at the same point in the expansions of 1991‑2001 and 1961‑1969, respectively. The reluctance of consumers to spend in this expansion is not surprising when you consider how much of the brunt of the last recession was borne by this group."

Households' net worth collapse in the GFC has been more dramatic and the recovery from the crisis has been less pronounced than in the previous cycles:

Source: FactSet

Hey, you hear some say, but the recovery this time around has been 'historic' in terms of jobs creation. Right? Well, it has been historic... as in historically low:

Source: FactSet

So, despite the length of the recovery cycle, the current state of the economy hardly warrants elevated levels of optimism. The recovery from the Global Financial Crisis and the Great Recession has been unimpressively sluggish, and the burden of the crises has been carried on the shoulders of ordinary households.

Any wonder we have so many 'deplorables' ready to vote populist?

As we noted in our recent paper, the rise of populism has been a logical corollary to (1) the general trends toward secular stagnation in the economy since the mid-1990s, and (2) the impact of the twin 2008-2010 crises on households.


philipat Stu Elsample Wed, 05/16/2018 - 19:56 Permalink

It's actually much simpler and it doesn't need charts to explain. Real incomes have been declining and real inflation has been climbing. Net result, the consumer is tapped out and unable to take on more debt. In an economy which comprises 70% PCE, the economy can't grow if consumers don't/can't spend. Such "growth" that has taken place is due either to fake statistics or QE or both.

In reply to by Stu Elsample

Dilluminati philipat Wed, 05/16/2018 - 20:01 Permalink

The additional reason is that robotics and AI are now job neutral in growth, where pay doesn't rise to reflect the growing economy, what is lacking is any wage growth and an non-expanding wage rate means that debt is finite and that higher prime rates means contraction.

Even the old homestead or traditional home purchase won't pinch hit against this new cycle.  So when new plants are created for manufacturing the mix of AI, automation, and robotics is even undercutting traditional least cost sourcing.. competing at fast food and McDonalds and that should increase  

In reply to by philipat

Dilluminati Jim in MN Wed, 05/16/2018 - 20:27 Permalink

The drugs opiates.. people literally giving up, looking in the mirror and not seeing anything there..

You have to be tough and work hard.. and for real and no joking 

You will need a gun.. that day is coming when the moochers arrive and it is coming

Then you will see the rise of the double standard – the men who live by force, yet count on those who live by trade to create the value of their looted money – the men who are the hitchhikers of virtue. In a moral society, these are the criminals, and the statutes are written to protect you against them. But when a society establishes criminals-by-right and looters-by-law – men who use force to seize the wealth of disarmed victims – then money becomes its creators' avenger. Such looters believe it safe to rob defenseless men, once they've passed a law to disarm them. But their loot becomes the magnet for other looters, who get it from them as they got it. Then the race goes, not to the ablest at production, but to those most ruthless at brutality. When force is the standard, the murderer wins over the pickpocket. And then that society vanishes, in a spread of ruins and slaughter.

The cocksuckers.. they want to disarm you so taking your money is easier


In reply to by Jim in MN

Dilluminati Tzanchan Wed, 05/16/2018 - 20:05 Permalink

Yeah but when you think Demoncrat think wasserman and hillary.. that ought to make you ill…

On a serious note: there are two Americas one where 1:3 haven't $5000 in retirement savings…

And then there is the other 1/3 working

And the lines are being drawn and we know how Venezuela plays out...

There are no hot demoncratic women.. that is a myth

In reply to by Tzanchan

bh2 Wed, 05/16/2018 - 19:38 Permalink

What is even more obvious is that each cycle rises slower and lower than the one before. That's a trend and the current expansion is only the most recent data point.

GreatUncle Wed, 05/16/2018 - 19:45 Permalink

Trump ... if he causes carnage, mayhem, etc ... on his grand scheme of things it is kind of better than living in a shit world to oblivion of poverty - right or wrong?

We have liberal twats running around pretending to save 100 people while 100K somewhere else die.

The chaos allows us to save the 100K and fuck off the 100, sorry 100 you are deaded for the greater good no longer do the liberals sacrifice the 100K.

rudyspeaks Wed, 05/16/2018 - 19:45 Permalink

Great! The new tax bill will leave us SO EFFING BROKE we won't have a pot to piss in! We will be paying over a TRILLION dollars a year to the parasitic banking industry because of Trump. HRC and the DNC Dems left people little choice, but, for God's sake, don't make this sound like a victory for the little guy!

Rex Andrus Wed, 05/16/2018 - 19:54 Permalink
All For A LARP?
Ask yourself, WHY?


Bay Area Guy Wed, 05/16/2018 - 21:17 Permalink

The Trump-volution is a myth.  What got Trump elected was that he was not Hillary Clinton, possibly the worst candidate for president that either party has put up, and most certainly the worst campaigner for president that either party has put up.  And given the candidacy of John McCain just eight years prior, that's saying a LOT.

tunetopper Wed, 05/16/2018 - 21:39 Permalink

Autonomously driven freight trucking - a better idea since there are only a handful of makes and models, and they go long haul routes mostly via national interstate systems. But noooo! Let's get everyone to buy-in to the autonomously driven passenger car.... Because they want to advertise to us, and monitor our conversations.

agcw86 Thu, 05/17/2018 - 08:39 Permalink

Why not show the rising charts of unfulfilled campaign promises and the rising level of voter inattentiveness? Those two graphs would explain it all. Truth is, the voter had no choice, never does, and he ran against an old, corrupt, traitor witch-on-a-broom.