1970-1985 sucked pretty bad though, long before the current suckiness which tastes like nothing so much as that era.
A country that doesn't work is a poor country.
But of course globalization after 1984 meant the good paying manufacturing jobs started to dry up because patriotic American businessmen relocated them to cheaper labor countries in East Asia.
😏
The data comes as stock prices continue to hover near all-time highs, while wage growth is barely keeping up with inflation.
On Friday, the Bureau of Labor Statistics reported that wage growth slowed to its lowest rate in five years in August and remains below the broader pace of price growth.
It’s the latest data point reflecting a decades-long stagnation in returns to labor, while corporate profits have exploded.
Since approximately the start of this century, the S&P 500 stock index has gained about 600%. Over the same period, inflation-adjusted worker earnings have climbed just 12.5%.
Since April, the prices consumers pay are rising faster than wages.
What’s driving it all?
Economists aren’t really certain about the exact cause, but a confluence of factors appears to be at work, according to Mike Konczal, vice president of policy and research at the Economic Security Project and a former White House chief economist in the Biden administration.
The start of the century coincided with what is known as the “China Shock,” as Beijing’s entry into the World Trade Organization massively accelerated globalization and offshoring.
The shock chipped away at the number of traditional blue-collar workers in the U.S., and it reduced the bargaining power of those who remained.
Meanwhile, technological advances have allowed the typical worker to generate larger volumes of more valuable services.
But those gains are being captured as company profits, not as wage growth.
The trend appeared to reverse, or at least stabilize, for a brief period during the post-pandemic economic reopening. But exactly why that happened is still not entirely clear.
The decline resumed after President Donald Trump returned to office in 2025.
Konczal said some economists believe corporations have sought to increase their profit margins at the expense of higher wages for workers in order compensate for the economic uncertainty that Trump’s tariff policies have created.
Regardless of the specific reasons behind the renewed drop in gains for labor, the decline has implications for all of society, Konczal said.
It stands to increase wealth inequality by putting more resources in the hands of capital owners — namely stock market investors — while the returns to workers stagnate.
It also has fiscal implications: Konczal said efforts to increase taxes on wealth or corporate profits have proved politically untenable so far, compared with the current arrangement of taxing earned income and wages instead.
“The economy can start to become unequal in a way that it’s not just the CEO who makes more, but people who own shares do, and that wealth is very, very unequal,” he said.
The Reagan tax revolution made America ripe for globalization, but you can't explain that to a mouthbreather.
The goal wasn't globalization.
After all the dotcom malinvestment, the entry of China into the WTO opened a door to a ready, welcome, and fateful solution which became globalization, funded by oodles of low marginal ordinary income tax rates.
We need more philosophers, and fewer Rubios.
The trend for the growth of the total universe of US debt, TCMDO or total credit market debt outstanding, rolled over after 1985, one year after GDP did.
TCMDO is the real money, almost $108 trillion at the end of 2025. In 1985 it was $9 trillion.
M2 was merely $22 trillion at the end of 2025.
TCMDO is the sum total of debt expansion throughout the sectors of the economy.
Historically, most people have experienced it this way.
You get a full time job, which itself was created by a business selling debt in the form of stocks and bonds in order to expand its operations and future profits, and you go buy a house, putting down $100k on a $500k property. The bank loans you the $400k through fractional reserve lending on a small portion of its reserves but secured by the house. That new money is created out of thin air but is actually represented by the "guaranteed" future income stream of your job for 30 years, because you're a smart, reliable guy who never misses a day of work. TCMDO expands, and expands some more each time this happens.
When the conditions disappear for full time job creation, the process slows down. You can see the decline in the growth of the economy in the decline of the growth of the debt. Yes, everything is still growing, but not as vigorously.
Full time as a percent of population peaked 26 years ago, in 2000, at 53.55%, but retested the 1975 low of 46.74% in 2010 and 2011 at 46.97%, back-to-back years in the Late Great Recession.
Housing strength persisted in the immediate post-Reagan period on the illusory basis of windfalls from massive ordinary income tax cuts combined with the demographic peaking of the 1957 Baby Boom turning 40 in 1997 driving demand, but the hollowing out of the economy had already begun with the move of 20,000 manufacturers abroad after the 1986 tax reform.
Early warning signs began flashing already during the Clinton era.
Clinton immediately raised taxes in 1993 after he promised not to raise them in 1992, began a long series of cuts to federal government employment, and gutted the US Navy.
Americans were already struggling at the time and ominously tapped housing equity to sustain their middle class standard of living. Owners' Equity in Real Estate averaged 70% 1982-1986 inclusive, but plunged ten points within a decade to 60% 1996-1999 inclusive.
Homes had become piggy banks, preparing the way for 1997, the year Clinton and the Republicans went further still and turned homes into mere commodities, which in turn prepared the way for the housing catastrophe of 2008. From 1997 a flood of 70,000 more manufacturers began moving out as globalization kicked into high gear and China gained admission to the WTO in 2001.
Almost no one today wants to say out loud how unpatriotic this whole business was.
Reagan tried to convince us that we know best what to do with our own money, and we promptly turned around and staked our fortunes on foreign investment, not domestic.
Libertarianism is a lie.
Today you will be hard-pressed to identify a major manufacturing concern with 100% of its operations in the US. Tesla is a standout (heavily subsidized by the federal government!), but other than that most of the businesses which remain patriotically committed to the American idea are pretty small beer compared with how it used to be.
The formerly domestic debt expansion was exported abroad, creating middle classes where none existed before, especially in East Asia, and doing so cost businesses A LOT less, the key attraction for them.
As a result, enormous profits accrued to the owners of capital while wage earners here struggled to maintain the American dream. Wealth inequality soared, and now our children are 40 before they buy their first home.
TCMDO grew at a compound annual rate of 8.355% 1945-1985, but at only 6.398% 1985-2025. The change from optimism to pessimism can be traced in the trend lines.
Continued growth of TCMDO at the former rate but after 1985 would have yielded TCMDO at the end of 2025 of $223 trillion, or 106% more "money" than we actually have.
$115 trillion is "missing", or at least something like that. We will never know for sure, but some of us can still imagine because we watched the great betrayal actually happen.
This is why I say socialism is the future, not because I want it or because I think it will work.
People are going to figure this out eventually, get angry, and do the wrong thing, just like we did during the Reagan administration.
That whole China joining the WTO and globalization thingy has really worked out great for the American middle class amirite?
The winter trend since Jan 2023 has been DOWN:
Jan 2023: 49.32%
Jan 2024: 49.16%
Feb 2025: 48.88%
Jan 2026: 48.79%.
 |
| "Let''s devalue the Yen and spend the hell out of it" |
Japan’s ruling party picked hardline conservative Sanae Takaichi as its head on Saturday, putting her on course to become the country’s first female prime minister in a move set to jolt investors and neighbors. ...
Takaichi, who says her hero is Margaret Thatcher, Britain’s first female prime minister, offers a starker vision for change than Koizumi and is potentially more disruptive.
An advocate of late premier Shinzo Abe’s “Abenomics” strategy to boost the economy with aggressive spending and easy monetary policy, she has previously criticized the Bank of Japan’s interest rate increases. ...
It's obviously the nationalism, anti-globalism, and possible militarism which really bother the writer from Reuters:
... But her nationalistic positions — such as her regular visits to the Yasukuni shrine to Japan’s war dead, viewed by some Asian countries as a symbol of its past militarism — may rile neighbors like South Korea and China. ...
Takaichi also favors revising Japan’s pacifist postwar constitution and suggested this year that Japan could form a “quasi-security alliance” with Taiwan, the democratically governed island claimed by China. ...
“We hope she will ... steer Japanese politics in an ‘anti-globalism’ direction to protect national interests and help the people regain prosperity and hope,” Sanseito said in a statement.
If Japan really wanted to scare the world, maybe it could peg the Yen to the price of plutonium, the vast majority of which in the world it owns, and start aggressively selling it to the highest bidders.
 |
| "That will teach them" |
... the White House deputy chief of staff — and chief architect of Trump’s immigration agenda — is taking a sledgehammer to what remains of the libertarian-conservative fusionism that was prominent in the party pre-Trump.
“The libertarians in the House and Senate trying to take down this bill — they’re not stupid. They just don’t care,” Miller said in an interview with conservative activist and commentator Charlie Kirk last week.
“Immigration has never mattered to them; it will never matter to them. Deportations have never mattered to them; it will never matter to them. You will never live a day in your life where a libertarian cares as much about immigration and sovereignty as they do about the Congressional Budget Office.” ...
Miller’s aversion to libertarians, though, seems to go deeper than opportunistic messaging for the bill. He posted in 2022 that the uprising of the ideology in the House GOP is “how we ended up with open borders globalist [Paul] Ryan.” He blamed libertarian candidates for siphoning votes away from failed Trump-endorsed candidates in 2022 — Herschel Walker in Georgia, Blake Masters in Arizona, and Don Bolduc in New Hampshire.
“Another example of how libertarians ruin everything,” Miller said in one post responding to a 2022 Georgia Senate poll. ...
More.
The CBS Poll referenced in the story indicates 55% like Trump's deportation goals but 56% dislike his approach.
Polling on the reconciliation bill indicates most think it will help the wealthy and hurt poor and middle class people, with a third admitting they have no idea what's in the bill. Well, neither did many in the US House who voted for the damn thing.
This points up the political danger of these Christmas Tree bills adorned with something for everyone. They're too complicated to understand and therefore capture little enthusiasm. But Stephen Miller fancifully thinks otherwise:
“By including the immigration language with the tax cuts with the welfare reform, it creates a coalition. Politics is all about coalitions,” Miller said in the interview with Kirk — also praising Trump in the interview as “able to create a winning formula for populist, nationalist, conservative government.”
But not libertarian government.
Rod Dreher, world citizen.
The indispensable contribution driving investment back home to the United States will have to be penalizing foreign investment's income and rewarding long term domestic investment's income through the tax code, which also means dramatically raising ordinary income tax rates. In other words, returning to the status quo ante-Reagan.
The reason is we have learned that rich people don't know what's best to do with their own money any more than the rest of us do. The rich have not done what's best for the country. Ronald Reagan was completely wrong about that. They took one look at the quick and easy money and immediately started looking to maximize it elsewhere. The tax code used to force them to do the right thing, which was keep it here and invest at home if they wanted to get richer. And that is what made all of us richer, with jobs with which we could afford to marry, buy houses and cars, raise children and send them to college.
People who got rich through Reagan's low ordinary income tax rates fell for the cheap labor abroad to get even richer, but now here they and we sit together beholden to countries abroad who are hostile toward us.
The chart below shows how domestic investment dominated foreign throughout the post-war until the Reagan tax reform of 1986. Investment abroad did not overtake domestic until 1993, at 105% of private fixed investment, after the Reagan tax cuts had taken full effect. Foreign as a percentage of domestic investment is double that and more today. For every four dollars invested at home in 2024, eight were invested abroad.
It took decades to screw this up, and it will take decades to fix it. But as sure as I'm sitting here neither J. D. Vance nor Donald Trump nor any other politician out there has any clue about this.
Nominal GDP came in at a revised $28.255 trillion.
Sounds like a lot, right?
Here's the big picture.
From 1947 to 2000, nominal GDP grew at a compound annual rate of 7.26%.
From 2000 to 2024, nominal GDP grew at a compound annual rate of 4.42%, 39% lower.
The year 2000 marks the US opening to China, and the great wealth transfer out of the US from the middle class under globalism, creating new middle classes there and elsewhere.
We are poorer for it, but we have lots more billionaires now and you can read all about it on your Apple iPhone made by slave labor while you eat your 40% more expensive hamburger from McDonalds since 2019.
Part of Trump's success in 2016 was his appeal to the former greatness of America, which resonated most with those who remembered what it was like in this country before the elites shipped their jobs to China.
Americans are not working up to their potential because it's not worth it. They have voted with their feet. 2019 was but a shadow of what might have been.
No cash, no hope, no jobs, no bacon. Alcohol, drugs, and accidental death.
More.
The story never mentions how those newly introduced extra billion plus workers reduced economic outcomes for the already established middle classes around the world, especially in America where the full time job of the 1990s became a thing of the past.
If I'm repeating myself, I don't care.
The Clay and Buck Globohomo Show.
In 2018, Kotkin was still tip-toeing around the obvious, but not anymore:
Mussolini’s notion of fascism has become increasingly dominant in much of the world . . .
Mussolini, a one-time radical socialist, viewed himself as a “revolutionary” transforming society by turning the state into “the moving centre of economic life”. In Italy and, to a greater extent, Germany, fascism also brought with it, at least initially, an expanded highly populist welfare state much as we see today.
Mussolini’s idea of a an economy controlled from above, with generous benefits but dominated by large business interests, is gradually supplanting the old liberal capitalist model. ...
fascism — in its corporate sense — relies on concentrated economic power to achieve its essential and ideological goals. ...
China, in many aspects the model fascist state of our times, follows Il Duce’s model of cementing the corporate elite into the power structure. ...
But in the battle between the two emergent fascist systems, China possesses powerful advantages. Communist Party cadres at least offer more than a moralising agenda; they can point to the country’s massive reduction of extreme poverty and a huge growth in monthly wages, up almost five-fold since 2006. At a time when the middle class is shrinking in the West, China’s middle class increased enormously from 1980 to 2000, although its growth appears to have slowed in recent years.
Like Mussolini, who linked his regime to that of Ancient Rome, China’s rulers look to Han supremacy and the glories of China’s Imperial past. “The very purpose of the [Chinese Communist] Party in leading the people in revolution and development,” Xi Jinping told party cadres a decade ago, “is to make the people prosperous, the country strong, and [to] rejuvenate the Chinese nation.”
Kotkin recognizes at least that American right-wing libertarianism is part of the problem, not part of the solution:
the consolidation of oligarchic power is supported by massive lobbying operations and dispersals of cash, including to some Right-wing libertarians, who doggedly justify censorship and oligopoly on private property grounds.
Regrettably, however, Kotkin still does not connect this failure of the old liberal order in the West with the failure of the old moral order which gave it birth and on which it depended. This is because Kotkin still sees things in primarily materialistic terms.
Kotkin is oddly politically correct when he denounces possible recourse to nativism, which blinds him to the nativism which is at the heart of Chinese state capitalism and gives it much of its appeal and strength. He calls for "a re-awakening of the spirit of resistance to authority" in the West, not realizing that it was Protestantism which made that even possible in the first place.
The problem of the West is spiritual, and Catholicism will never be able to rise to the occasion of refounding it as long as globo-homo defines Rome. The whole idea is inimical to the notion of founding a nation "for our posterity".
Biden reportedly said in response to the employment situation summary today:
"At that rate it's going to take ten years to get back to full employment. That's not hyperbole that's a fact."
I'm hopeful because 72 million Americans sided against Joe Biden.
From "A Review of Protestants and American Conservatism: A Short History by Gillis J. Harp (New York, NY: Oxford University Press, 2019)", here :
Still, perhaps there is more reason to hope than Harp lets on. Neither Modern Conservatism nor the new nationalism shows signs of a distinctly Protestant political perspective. To the extent either one has a political theology, it is dominated by Roman Catholics, who occupy the lion’s share of both movements’ intellectual wings.
Yeah, sure, buddy, it wasn't Catholic priests who used their pulpits to call the men to arms in the revolution against the English king. It wasn't Catholic priests who then doffed their robes and grabbed their rifles and joined them in the field. It was Presbyterians.
Joe Biden, a Catholic, preaches a return to normalcy, which amounts to acquiescence to the status quo of liberal dominance of most American institutions. That is the default position of Catholicism, acquiescence to authority, submission to hierarchy, rule by elites. By definition they'll revolt against nothing and adapt themselves to every nutty innovation which comes along in the spirit of taxation without representation.
The Loyalists have made a comeback, largely on the backs of Catholic immigrants to the United States since 1850.
Is anyone surprised they are for open borders, mass immigration, and globalism, especially if it augments their dominance in America?
Donald Trump, in his feeble way, was a resounding No to all this.
We're still out here.
