How bad was 2009 for Americans? Rampant unemployment got combined with huge pricing signals for higher taxes and costs for businesses in a way that had everyone squeezing pennies until Abraham Lincoln squealed. Not surprisingly, the recession and those pricing signals added up to a big negative for American income in 42 states:
Personal income in 42 states fell in 2009, the Commerce Department said Thursday.
Nevada’s 4.8% plunge was the steepest, as construction and tourism industries took a beating. Also hit hard: Wyoming, where incomes fell 3.9%. …
Nationally, personal income from wages, dividends, rent, retirement plans and government benefits declined 1.7% last year, unadjusted for inflation.
Guess where the pain was felt the least?
Incomes stayed flat in two states and rose in six and the District of Columbia.
Gee, I wonder why incomes rose in DC?
K Street’s top 25 firms cashed in on the aggressive legislative agenda unleashed by the new president and bigger Democratic majorities in Congress in 2009 to post double-digit growth of about 10 percent over the previous year.
Despite economic uncertainty and the promise by the Obama administration to clamp down on the influence industry, the majority of top lobbying firms posted higher numbers in 2009, with 11 firms showing dramatic growth.
Now that’s a real shocker, isn’t it? But the hope-n-change doesn’t stop there:
Last month, we reported in our Q4 Real Estate Market Reports that five of the 143 markets we covered were in the throes of a “double dip,” meaning home values showed sustained monthly increases sometime during the year, but have been falling again, for at least five months in a row, on a month-over-month basis.
Some additional markets were on the double-dip watch list. Home values, measured by the Zillow Home Value Index, were falling after earlier increases, but the falls hadn’t yet gone on long enough to constitute a real trend.
One month later, and 12 markets have made it onto the official double-dip list. The Providence, R.I. and Boulder, Colo. metropolitan statistical areas (MSAs) are among them.
The watch list has shrunk a bit, as many markets that were on it last month sunk firmly into double dip territory after January. Ten markets, including the Boston and Denver MSAs, seem poised for a double dip.
There’s nothing in any of Barack Obama’s economic policies to suggest that our economy is on the road to real recovery, other than the media simply telling us that is the case. Because of the industriousness and productivity of the American people, things will eventually get going again, but it will be a very different ‘going’:
It is an alarming, jaw-dropping conclusion. The U.S. standard of living, says superstar Northwestern University economist Robert Gordon in a new paper, is about to experience its slowest growth “over any two-decade interval recorded since the inauguration of George Washington.” That’s right, get ready for twenty years of major-league economic suckage. It is an event that would change America’s material expectations, self-identity and political landscape. Change in the worst way.
Now it’s not so much that the Great Recession will morph into the Long Recession. More like ease into the Great Stagnation. As Gordon calculates it, the economy will average only 2.4 percent annual real GDP growth over that span vs. 3 percent or so during the previous 20 years. On a per capita basis, the economy will grow at just a 1.5 percent average annual rate vs. 2.17 percent between 1929 and 2007.
That might not seem like much of a difference, but it really is. Over time, the power of compounding would create a huge growth gap measured in the trillions of dollars. To look at it another way, assume you had an annual salary of $100,000. If you received a 1.5 percent raise each year, you would be making $134,000 after 20 years, $153,000 after 40 years. But a 2.17 annual raise would boost your income to $153,000 after 20 years and $236,000 after 40 years.
And this is intentional. More economic difficulty achieves two things that Barack Obama genuinely wants:
1. more redistribution of wealth
2. more dependence upon government
His policies scream that fact to the hilltops. There is no evidence anywhere to suggest that he wants a free, prosperous, and roaring economy so that all Americans benefit, and that’s truly the shame of it.
I’m pretty sure that’s neither hopeful nor the kind of change that America voted for in 2008, but that’s what we got. Welcome to the Obama era.
There’s my two cents.