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America’s 18 Year Recession That Started in 1997 (It Didn’t End In June 2009)
Confounded Interest ^ | 4/13/14 | Anthony B. Sanders – George Mason University

Posted on 04/13/2014 9:17:13 AM PDT by Nachum

The U.S. economy has been in a recession since 1997. While I am not referring to the NBER’s definition of a recession (that allegedly ended in June 2009), I am talking about declining real incomes, labor force participation and M2 Money Velocity. Both labor force participation and M2 Money Velocity peaked in 1997 while real median household income peaked in 1999. And all three have been declining ever since.

allbad

And to add another slap in the face to consumers, the purchasing power for consumers has been deteriorating ever since the creation of The Federal Reserve System in 1913.

badnewspp

Once the 16 year recession started in 1997-1999, our economy has replaced economic growth with a series of asset bubbles like the Dot.com bubble, the housing bubble and The Fed bubble.

bubbles1999

As labor force participation and M2 Money Velocity peaked in 1997, we saw the dot.com bubble form … and burst. We then saw the peaking of real median household income in 1999. It has been bubbles ever since.

bubblecity

To be sure, the 18 year recession has ended for investors, but not for the middle and lower classes.

income-top10a

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TOPICS: Business/Economy
KEYWORDS: america; recession

1 posted on 04/13/2014 9:17:14 AM PDT by Nachum
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To: Nachum

Makes sense to me; that’s about the time the .bom economy started and the fake earnings and such, and the Clintoons and Bushies with their socialistic and crony capitalism...


2 posted on 04/13/2014 9:21:33 AM PDT by CincyRichieRich (A government of the people and by the people...)
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To: Nachum

Wow this guy apparently missed the elephant in the room. The baby boomers are getting old. Among the things that happen when you get old are:

1. Labor force participation goes down. [So the correct question is has the LFPR dropped more under Obama’s policies than expected due to the age profile of the population.]

2.You don’t earn as much. You pass out of the peak earning years and on average an aging work force will earn less than a somewhat younger work force. [A really young work force will also earn less due to lack of experience.]

3. As of the velocity of money, the author is behind the times and is looking at somethings, sum M2 and its velocity, that are meaningless.

Nice graphs, now the author needs to work on understanding them.


3 posted on 04/13/2014 9:27:57 AM PDT by JLS
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To: Nachum

Too many conservatives have been in denial about declining incomes until recently. It’s happened under Clinton and Bush, not just Obama. The decline started among the lowest paid workers and spread up to something like 80% of people seeing steady year by year income declines.


4 posted on 04/13/2014 9:28:19 AM PDT by Monmouth78
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To: Nachum

Bfl


5 posted on 04/13/2014 9:33:36 AM PDT by Lurkina.n.Learnin
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To: Nachum

!


6 posted on 04/13/2014 9:34:33 AM PDT by skinkinthegrass (The end move in politics is always to pick up a gun..0'Caligula / 0'Reid / 0'Pelosi)
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To: JLS

While I agree with your criticisms @ post 3 - there is one undeniable truth.

As government grows - freedom dies. The pretty graphs of economists rarely show the relationship between big government and quality of life.

When everything is taxed we all have less of everything. Government spending is pretty constant and government rarely reduces spending when revenues drop. Each bubble that puts more money into the government coffers during the booms increases taxation during the busts.

Until a majority of Americans understand government borrowing and/or Fed pumping is a tax we are doomed. We are even taxing future generations to spend today.


7 posted on 04/13/2014 9:45:20 AM PDT by volunbeer
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To: JLS

“1. Labor force participation goes down.”

Um, it is measured in percentage so your comment about baby-boomers aging is not reflected in that measurement at all.


8 posted on 04/13/2014 9:48:52 AM PDT by CodeToad (Arm Up! They Are!)
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To: Nachum

GloBULList Free Trade has speed up our journey down the road to serfdom by decades...


9 posted on 04/13/2014 9:57:54 AM PDT by central_va (I won't be reconstructed and I do not give a damn.)
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To: Nachum

Wait until the GloBULLists start snapping up the real estate making us a nation of underemployed urban debtor renters i.e. perfect socialists.


10 posted on 04/13/2014 10:01:23 AM PDT by central_va (I won't be reconstructed and I do not give a damn.)
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To: Nachum

“That Which is Seen, and That Which is Not Seen.” If you have not read it, do so.

Virtually all economic analyses I have seen compare our former state to our current state, while the correct comparison is between our former state, and the state we should have achieved. What would be our current state if the great redistribution of property and freedom had not commenced? What would be our current state if Clinton had not spent the “peace dividend”? What would be our current state if the “technology dividend” had not been confiscated?

What is left of our former properties and freedoms is a small fraction of what what we had, and but a small trace of what we should have.

We do not miss what we are barred from achieving.


11 posted on 04/13/2014 10:02:34 AM PDT by Born to Conserve
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To: JLS
Wow this guy apparently missed the elephant in the room. The baby boomers are getting old. Among the things that happen when you get old are:

1. Labor force participation goes down. [So the correct question is has the LFPR dropped more under Obama’s policies than expected due to the age profile of the population.]

You really think the LFPR has gone down because of demographics??

Wow.

12 posted on 04/13/2014 10:06:19 AM PDT by FreeReign
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To: FreeReign

I certainly know that LFPR was due to fall as the baby boomers retired. So the issue is whether and how much more the LFPR is down due to an aging work force and how much is due to bad Obama policies.

Additionally, some of the LFPR decline is due to an up tick in stay at home moms. Whether that is do to a return to values, greater benefits to the poor or bad economic policy is a question that does not answer itself.

The bottom line is that if you claim we are in a recession since 1997 and your evidence is declining LFPR and declining income per household, you sure as heck better be able to disentangle the part due to demographics. If you can’t you don’t have a case.


13 posted on 04/13/2014 10:24:16 AM PDT by JLS
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To: JLS
The problem with the assumption that LFPR was due to fall as Boomers retire is that the Millenial generation is even larger than the Boomer generation. If demographics were the only factor, then LFPR should go up as the Millenial generation hits working age.
14 posted on 04/13/2014 10:45:14 AM PDT by The Grammarian
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To: The Grammarian

plus boomers seem to be delaying retirement.


15 posted on 04/13/2014 10:55:06 AM PDT by stylin19a (Obama ----> Fredo smart)
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To: Nachum; volunbeer; Born to Conserve
Adam Smith, along with the wise Founders of America, seemed to be quite clear that individual liberty and limited government power were and are the foundation stones of opportunity, creativity, prosperity, and wealth creation.

Every step away from the American Constitution's principles and protections for individual liberty and its structured limits on coercive government power has served to reduce wealth creation and to increase joblessness, poverty and other resulting ills.

Let there be no mistake: Democrats never waged a "war on poverty"!

There was a war on "the People's" Constitutional limits on elected representatives' use of coercive power to "take" and "redistribute" the people's earnings, under the guise of "helping" some at the expense of others.

Growing a voter base in order to retain power ceded to them by kind-hearted American citizens who could not distinguish between the merits of private charity and the dangers of coercive collective power has brought us to today's debt, deficits and endangered liberty for all citizens.

Perhaps a reading of Congressman Davy Crockett's (TN) experience might be a revealing exercise for those who don't see the dangers of turning over our individual responsibilities to those who promise to "help us."

The current Democrat appeal for "fair share" and against "inequality of income" is simply "slavery" by another name. Government "masters" buy votes in exchange for retaining their "master redistributionist" status, while their "voters" yield up freedom for themselves and future generations.

"Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience." - C. S. Lewis
Hear Samuel Adams:

"Is it now high time for the people of this country to explicitly declare whether they will be free men or slaves. It is an important question which ought to be decided. It concerns more than anything in this life. The salvation of our souls is interested in this event. For wherever tyranny is established, immorality of every kind comes in like a torrent, it is in the interest of tyrants to reduce the people to ignorance and vice.” - Samuel Adams

And:

“The utopian schemes of leveling and a community of goods, are as visionary and impractical as those which vest all property in the crown. These ideas are arbitrary, despotic, and, in our government unconstitutional.” - Samuel Adams

16 posted on 04/13/2014 10:56:11 AM PDT by loveliberty2
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To: stylin19a
plus boomers seem to be delaying retirement.

...Much to the chagrin of those of us in fields like library science, where predictions pre-Obama's Recession said there would not be much growth, but that there would be a great deal of job openings as Boomers retired.

17 posted on 04/13/2014 11:06:02 AM PDT by The Grammarian
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To: Nachum

I remember that back in March 2000 the stock market went into free fall while Clinton did nothing to stop it. He had ridden a rising stock market during his term.

So, somehow G W Bush got the blame even though he had not been elected yet!


18 posted on 04/13/2014 11:37:20 AM PDT by Ruy Dias de Bivar (Sometimes you need 7+ more ammo. LOTS MORE.)
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Clearly the solution to US economic problems is to close more American factories and move them out of the country. Those awful manufacturing jobs are such a drag on the economy.


19 posted on 04/13/2014 11:46:36 AM PDT by Rockpile
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To: Monmouth78
What's happened in this time is that the percentage of the population that can accumulate wealth must have gone way down. (that's an assumption, I don't have a chart to show it) If people can't accumulate wealth, they can't prepare for the next downturn or for a change of fortunes (lost job, illness etc) and they easily slip out of self-reliance.

I can't imagine how this could be turned around. One thing, for sure, the US doesn't need more population. That's just for the elite to continue accumulating wealth, power, and assets....at everyone else's expense.

20 posted on 04/13/2014 11:53:51 AM PDT by grania
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To: JLS
The bottom line is that if you claim we are in a recession since 1997 and your evidence is declining LFPR The bottom line is that if you claim we are in a recession since 1997 and your evidence is declining LFPR and declining income per household, you sure as heck better be able to disentangle the part due to demographics. If you can’t you don’t have a case. declining income per household, you sure as heck better be able to disentangle the part due to demographics. If you can’t you don’t have a case.

Read post 8. The letter "R" in the acronym "LFPR" stands for the word "rate".

21 posted on 04/13/2014 12:17:52 PM PDT by FreeReign
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To: Nachum

Only half the story at best:

Go back to 1964 when LBJ started his “War no the Family”. A short 7 years later we were BANKRUPT and Nixon closed the Gold Window forever and started us down the road to serfdom with pure fiat currency, and allowing commercial banks to create money out of thin air. Everything since then has been borrowed from the future, thereby successfully enslaving future generations in perpetual debt to pay for our wants and desires today. This has been tried many times throughout history and it never ends well.


22 posted on 04/13/2014 2:09:10 PM PDT by eyeamok
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To: FreeReign

Yes, rate ie percentage. If a larger percentage of your population is 60+, then your labor force participation rate is likely to be lower. Typically LFPR is of population 16+ not say 16 to 62 or 16 to 65 as your comment suggests that you think.

For example here:

http://data.bls.gov/timeseries/LNS11300000


23 posted on 04/13/2014 10:51:26 PM PDT by JLS
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To: Nachum
Now, just how would politicians go about creating a never-ending recession?

A Legislative History of H-1B and Other Immigrant Work Visas

24 posted on 04/13/2014 11:09:33 PM PDT by meadsjn
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To: Monmouth78
Too many conservatives have been in denial about declining incomes until recently.

Really? Do you have a source for that?
25 posted on 04/13/2014 11:26:03 PM PDT by PA Engineer (Liberate America from the Occupation Media.)
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