Why everything sucks since the Great Recession: Real GDP in the 18 years since 2007 has been growing at a compound annual rate of just 2.004%

 The compound annual growth rate before that, for the 60 years from 1947 to 2007, was 3.469%.

We're doing 42% worse.

It's uncanny.

 

 

The wealth inequality of today's K-shaped economy goes back to the Reagan Revolution

Wealth inequality and the ‘K-shaped’ economy are more striking than ever, data shows

 

They take vacations and buy luxury goods. You struggle to pay for food, shelter, and transportation.

 

K is not OK.

 

... A key measure of wealth concentration called the Gini coefficient sits at 60-year highs, according to a report from U.S. Bank published earlier this month. ... The net worth of America’s top 1% hit a record share of nearly 32% in the third quarter of 2025, the Federal Reserve reported. By comparison, the bottom 50% cumulatively held 2.5% of overall net wealth.

 

The portion of U.S. GDP heading to workers in the form of compensation tumbled to its lowest level in its more than 75-year history, per data tracked by the Bureau of Labor Statistics. That means the average nonfarm business worker is seeing an increasingly small slice of an economy that has largely boomed over the last 15 years. ...

 

Total relative “outlays” — a broad measure of spending and nonmortgage payments — by U.S. consumers in the top 20% hit multidecade highs last year, a data analysis conducted by Moody’s Analytics found. The other 80% tumbled to new lows, the data shows. ...

 

While the “K-shape” term became popularized as an explanation for the uneven economic recovery seen during the pandemic, economists say the origins of this breakaway can be traced back decades earlier.

This type of diverging economy stems from the economic reorganization seen during the Reagan administration, according to Joe Brusuelas, chief economist at tax firm RSM. About two decades later, the structural break that created the K-shaped economy, as it’s now understood, was more clearly observed in the wake of the Global Financial Crisis of the late 2000s, he said.

That was in part due to the loss of wealth tied to the historic housing market crash, Brusuelas said. On top of that, he said the jump in joblessness limited earnings potential for those without steady employment in their prime working years.

The Great Recession “created the conditions for the winner-take-all economy that emerged in its aftermath,” said Brusuelas, who first heard the K-shape term around 2008. “If you live, work and inhabit certain portions of the economy, you might as well live on the dark side of the moon compared to what goes on down-market.” ...

To make meaningful inroads, the U.S. would instead need to focus on tax reform and expanding social safety nets, according to RSM’s Brusuelas. ...

Donald Trump has so far done nothing to boost manufacturing employment, which is down 208,000 since Feb 2023 through Dec 2025

Trump's peak average was 12.779 million manufacturing employees in 2019.

We're at 12.732 million on average in 2025.

The 2023 average was 12.873 million, the post-Great Recession peak.

 

Bankruptcies in 2025 surge to a level not seen since 2010

 

Corporate bankruptcies surged in 2025, rivaling levels not seen since the immediate aftermath of the Great Recession, as import-dependent businesses absorbed the highest tariffs in decades.

At least 717 companies filed for bankruptcy through November, according to data from S&P Global Market Intelligence. That’s roughly 14 percent more than the same 11 months of 2024, and the highest tally since 2010. ...

More. 

Trump likes to trumpet the billion$ he's collecting in tariffs, but there is no single report which calculates the hundreds of billion$ these bankruptcies must cost the economy over time. 

Unbelievably rosy GDP report contained core pce inflation data at 2.9% countering previous rosy core cpi inflation report at 2.6% and indicating rising inflation

 U.S. economy grows by 4.3% in third quarter, much more than expected, delayed report shows

 

The U.S. economy grew at a much greater-than-expected pace in the third quarter, boosted by strong consumer spending, a delayed report released Tuesday showed.

U.S. gross domestic product, a sum of all goods and services produced in the sprawling U.S. economy, expanded by 4.3% in the July-September period, the Commerce Department said in its initial reading of third-quarter growth. Economists polled by Dow Jones expect a gain of 3.2%.  ...

 

The economy moved forward during the period despite persistent signs of inflation pressures.

The personal consumption expenditures price index, the Fed’s primary inflation gauge, rose 2.8% during the period, and 2.9% for core which excludes food and energy. Both were above prior respective readings of 2.1% and 2.6% and remain well above the Fed’s 2% inflation gauge. Also, the chain-weighted price index, which accounts for changes in consumer behavior such as switching to less expensive products for pricier items, rose 3.8%, a full percentage point above the forecast. ...

 As for the GDP report, even if you accept the rosy number as reported, it remains that . . .

Trump's real GDP since 2017 is growing at a compound annual rate which is 5% lower than the rate for 1984-2017; and

 

Trump's GDP since 2017 is growing at a compound annual rate 21% lower than the rate for 1947-2017.

 

Meanwhile GDP since 1984 is growing at a compound annual rate which is 28% lower than for 1947-1984.

 

And GDP since the Great Recession in 2007 is growing at a compound annual rate 42% lower than for 1947-2007.

 

The results of the era inaugurated by Reagan have been devastating. Real GDP today would be much higher had the previous long term trend continued.

 

3Q1984 Reagan real GDP of 8252.46 at the pre-Reagan rate of compound annual growth since 1947 would be 36213.94 today instead of 24024.95, 50% higher.

 

The Trump era is doubling down on stupid, not breaking with it. It is guaranteed to get us nowhere, faster.

Because we can't build them ourselves

 

Hanwha Ocean shares jump 10% after Trump says South Korean firm to build warships for U.S. Navy

 

Manufacturing capacity utilization was down in November, a pale reflection of its former self before globalization.

 

Same with manufacturing employment.

 

Manufacturing production was barely up in November and is effectively flat since the Great Recession, before which it was still rising.

 

Trump stupidly thinks tariffs can reverse all this, when you're supposed to use tariffs to protect what you have, not what you don't.

 

 

Trump gaslights America about affordability in last night's speech, says it only became an issue during the Biden administration

 I've been talking about affordability until I'm blue in the face right here ever since the Great Recession wrecked America and Obama did nothing about it.

There's even a label for it, with over 120 posts about it going all the way back to the beginning.

Affordability has become an even bigger problem because of the recent episode of inflation, no question about it.  

For example in 2025 the average sales price of a single family home in my county has been $433k, 87% higher than it was in 2019.

For that to be affordable, an income of $166.5k is necessary (2.6x = 433,000), but 94% of individual wage earners didn't make that much in 2023.

But in Trump's America in 2019, when the average sales price of a single family home in my county was only $232k, 85% couldn't afford it because they didn't make the necessary $89.2k a year.

Same shit, different day. Illegal aliens weren't to blame in 2019 any more than they are in 2025. 

Millions of Americans lost their jobs in 2009 and never got them back. Many of them lost their homes, too, and much else. Zero interest rate policy for a subsequent decade is what made housing unaffordable then, and Trump is calling for more of the same now.

People like me voted for Trump in 2016 because we thought that finally we had someone who meant business about stuff like that, but his failure to prioritize illegal immigration in 2017, his signature campaign issue, indicated that he wasn't a serious person, and the rest of his tenure proved it.

And he still isn't serious. 

He's wasting billions of dollars rounding up illegals whom he now laughably says number 25 million when he should be rounding up their employers and passing legislation which puts the screws to THEM instead of to some grandma with a sign at a protest rally.

He's also wasting billions going after Venezuela, which hasn't paid ExxonMobil and ConocoPhillips about $10 billion for expropriating their oil assets in 2007. Fighting this small potatoes matter is also costing us a fortune.

He also wasted $9-$12 billion in the Red Sea trying to stop the Houthis, but cut and ran when it got too expensive, leaving shipping the sitting duck it was in the first place, so it still goes around Africa instead. Transits through the Suez are down 50% and tonnage is down 66% compared with 2023.

America is no longer the guarantor of freedom of navigation on the seas. It doesn't care about freedom in Ukraine, and it certainly doesn't care about economic freedom at home. If it did it wouldn't spend the country into oblivion, and would tax the bejeebers out of the billionaires and leave the rest of us alone. 

We do not have a serious president.

It's all theatre.  

The Trump-Limbaugh dumb ass unemployment rate holds at 37.56% in November 2025

 103.165 million were eating but not working in November 2025.

Many of these people were over 65 and under 20, but I don't make the rules criticizing the lazy people of the United States. Rush Limbaugh and Donald Trump made that rule before the 2016 election. It is a dumb rule because elites like them screwed this economy for working people but they blame the people for giving up. The rule deserves to be trumpeted because those miserable hypocrites stopped talking about it as soon as Trump became president the first time. It continues to demonstrate how they have never understood what the hell they were talking about.

In Realville, the official unemployment rate rose to 4.6% from the recent low at 3.4% in April 2023 under Joe Biden, an historic low not seen since 1969. Rising unemployment off the lows like this is widely taken for a recession indicator, but initial claims for unemployment have averaged just 213k weekly in 2H2025, which is historically very, very low.

On the other hand, people not in the labor force but who want a job now has spiked, excluding the COVID episode, to levels last seen in 2016 during the long painful unwind of the Obama unemployment of the Great Recession, a level which before that was a rare outlier. That's an indicator of stress in the economy right now, which supports the view that we are building to a recession.

Meanwhile the country overall remains chronically underemployed with just 48.82% with a full time job, when as many as 9 million more full time jobs could easily exist if this economy were truly booming as it has in the past.

The shock of the November jobs report is that all of the full time jobs added since January, some 2.1 million, plus some, have simply evaporated, most of them in October and November.

Poof!

 

Owner-occupied housing is in short supply, in part because of pandemic-related panic-buying by 5.4 million in 2020, not because of a post-pandemic illegal alien surge under Joe Biden

 ... we flooded the country with 30 million illegal immigrants who were taking houses that ought by right go to American citizens ... Under the Biden administration, the price of a new home literally doubled in four years. ...

-- The ever-ridiculous J. D. Vance, here

Hysteria is everywhere on this issue.

Owner-occupied housing is hardly higher today than it was at the 2020 peak. 

Buyers became hysterical in 2020, seeking isolation. Vance is hysterical in 2025, playing immigration politics. The Fed went hysterical in 2008 slashing interest rates, and it took fourteen years and pandemic-related inflation just to get them to snap out of it.

The Fed's ZIRP after the Great Recession drove down mortgage interest rates to sub-five percent, averaging less than three by 2021.

As everyone knows, when you lower the long term price of a mortgage, you can "buy more house".

That's the major culprit driving prices higher, making housing more expensive, that and the 2-year rule. It took more than a decade of zero interest rate policy to bring us to this pass. It has not been and will not be remedied overnight, especially by its new cheerleaders in the Trump administration.

Cutting interest rates will only make housing more expensive. 

New housing is indeed soaring, but people need to get a grip. The median sales price of all housing in the United States is up 30% since 2020, not 50% like it was in the five or six years right after 2008.

A better government tax policy on housing is called for. The biggest problem is that the mere 2-year owner-occupancy requirement for capital gains tax exclusion has turned housing into a commodity since 1997. It was a big mistake to make housing so fungible. The answer lies in applying the brakes to that, so that the emphasis is on housing as a home as opposed to as a speculative investment driving prices for all types of homes irrationally higher.

The old policy allowed the exclusion only once in a lifetime. You sold your house when you retired and enjoyed life living off the proceeds mostly tax-free, usually in a down-sized arrangement or as a renter. Otherwise during your working life, when you had to sell to move, you had to purchase at least sideways, or up in price so that your gains went into the new place, not into your pocket. That's how housing became such a tempting source of pent-up capital in the first place. There was an incentive to maintain a ladder of housing values upon which people could move more freely, mostly up but also down.

We need to go back to some form of that arrangement.

But our leaders seem to have no imagination for it. They can't see that what we did in 1997 was a revolution. A bad revolution.

Sad! 

 

Trump is in big trouble with the voters on the economy and constitutional rights

 Blue Wave incoming.

 Poll: Frustration with Trump gives Democrats an opening a year before the midterms

Around two-thirds of voters say Trump has not lived up to their expectations on the economy and the cost of living, according to the new NBC News poll.

 

... Meanwhile, protecting democracy and constitutional rights is a top issue to voters, alongside costs, as Trump continues an expansive agenda of executive actions on immigration and other key policy areas. And a majority of voters believe he’s done more to undermine the Constitution than defend it. 

 

... The October 2025 results mirror NBC News’ polling in August 2010, months before midterm elections that were seen as a repudiation of President Barack Obama. At that time, two-thirds of Americans said Obama and his administration had fallen short of their expectations on the economy, as the country struggled through the aftermath of the Great Recession. ...

 

 

 

Real GDP since the Trump tax reform in 2017 still lags the post-war rate by 27.5%

Today's third estimate for 2Q2025 real GDP came in 0.5 points hotter at 3.8% on increased consumer spending: 

Real GDP was revised up 0.5 percentage point from the second estimate, primarily reflecting an upward revision to consumer spending. 

The big picture, however, indicates that the compound annual growth rate of real GDP from this report comes in at only 2.50% per annum for the eight years since 2Q2017. The corresponding figure for the sixty years 1947-2007 is 3.45% per annum. Economic growth since the year of the Trump Tax Reform late in 2017 therefore undershoots that post-war rate by 27.5%.

And measured from 2007 instead of 2017, real GDP growth has been even worse. Over the eighteen years since 2Q2007, real GDP has grown at a compound annual rate of just 1.97%, almost 43% worse than the pre-2007 rate of 3.45%.

Lower economic growth since the Great Financial Crisis remains the great unsolved economic problem of our time.

People who say "Just wait for the Trump tax cuts of 2025 to kick in" don't get it. There's nothing broadly, fundamentally, permanently different coming down the pike from that legislation. It's a continuation of the 2017 legislation, plus some temporary sweeteners.

A serious country would care about all this, but that would not be us. 

Can you spot the GDP?

 

The real GDP report is out and it looks better than a month ago: +3.3% seasonally-adjusted annual rate for the second estimate for 2Q2025, instead of +3.0% in the first estimate.

But the big picture changes only microscopically. 

From the second quarter of 2017, the year when Trump's tax reform became law on December 22nd, until now real GDP has grown at a compound annual rate of 2.466%, instead of 2.456% last month. For the seventy years before that, the compound annual rate of growth was 3.182%.

Trump's so-called pro-growth tax reform falls short of the previous seventy years this month by 22.5% vs. by 22.8% last month.

Now made permanent as of the Fourth of July, or so they say, the Trump tax reform is likely to continue to, shall we say, weigh on things.

The problem remains the lingering after effects of the Great Recession, the Great Financial Crisis, the Housing Bubble, whatever you want to call it.

The Trump tax reform of 2017 didn't do anything to address that meaningfully, just as Obama never addressed it meaningfully, nor Biden.

The rupture with the past occasioned by 2008 is the elephant in the living room, and the Uniparty just pretends it isn't there. 

From 2Q2008 to 2Q2025, the compound annual rate of real GDP growth has been 1.995% vs. 1.990% last month, vs. 3.421% for the sixty-one years prior to that, starting in 2Q1947.

America is still 41.68% behind that this month vs. 41.8% behind that last month.

It's . . . depressing.

Mike Shedlock, veteran critic of the BLS since the Great Recession: This is a clear case of shoot the messenger

 Did Trump Fire the BLS Head for Cause, Being the Messenger, or Something Else?

 

... “The process of obtaining the numbers is decentralized by design to avoid opportunities for interference.”

Trump wants you to believe hundreds if not thousands of people are in on the scheme and they are all silent.

The Cult sucks it up as if that makes sense.

I do not defend the antiquated procedures of the BLS. I have been writing about the flaws for years.

Yet, I can say that in all my conversations with BLS technicians (dozens over the years), I have found BLS [personnel] to be knowledgeable, courteous, and helpful. ...

 

Sorry Cultists and conspiracy theorists, the data is not rigged. And don’t pee your panties because it won’t be under Trump either (or someone will point it out).

Regardless, Trump’s tariffs ensure it will get worse. I expect many small businesses will go under. Trump has only himself to blame.

 

Here's the latest chart for grand total foreign holdings of US Treasury securities 2000-2025

 I don't remember why I started doing this chart in May of whenever it was, but I stuck with it over the years.

It was probably some nutball during the Great Financial Crisis screaming that foreigners were dumping U. S. Treasury securities and we were all doomed!

The nutballs have been saying that for a loooooooooooooong time.

 

These are the raw, as-reported numbers at the time, and do not incorporate any subsequent revisions.

In May 2025, 43% of the over $9 trillion in outstanding value for foreign held UST was "Official", that is, by governments. And 89.8% of that 43% is invested in longer term Notes and Bonds.

Year over year in May the value of what is owned by foreigners is up a whopping 11.25%. 

Many people in addition to governments around the world are banking on the full faith and credit of the United States because they can't really bank on their own governments.

And that's a fact, Jack. 

Update:

And, of course, there's a government chart of this, updated quarterly. 

 

 

America still isn't booming

 

 The real GDP report is out and it looks pretty good at 3% for the first estimate for 2Q2025, especially in comparison with the -0.5% result for 1Q.

If only it were so.

From the second quarter of 2017, the year when Trump's tax reform became law on December 22nd, until now real GDP has grown at a compound annual rate of just 2.456%. For the seventy years before that, the compound annual rate of growth was 3.182%.

Trump's so-called pro-growth tax reform fell short by almost 23%. 

The problem remains the lingering after effects of the Great Recession, the Great Financial Crisis, the Housing Bubble, whatever you want to call it. The Trump tax reform of 2017 didn't really do anything to address it meaningfully, just as Obama didn't, and also Biden in his turn.

From 2Q2008 to 2Q2025, the compound annual rate of real GDP growth has been just 1.99% vs. 3.421% for the sixty-one years prior to that, starting in 2Q1947.

America remains 42% behind its old self.

That's why everyone is unhappy, but especially the young. They desperately feel the futility of the situation, encumbered as so many of them are with student loan debt for the degrees which are not translating into the key to the future. 

That's the sad reality of where we are, and where we are likely to stay for the foreseeable future.

But as always, the first step is admitting you have a problem instead of trying to put lipstick on that pig.

 

 

 

Federal Reserve floats proposal to ease bank capital requirements which were increased in the wake of the Great Financial Crisis of 2008, Fed Governors Kugler and Barr in opposition

 

Divided Fed proposes rule to ease capital requirements for big Wall Street banks

 

... The Fed board put the proposal open for a 60-day public comment window.

In its draft form, the measure would call for reducing the top-tier capital big banks must hold by 1.4%, or some $13 billion, for holding companies. Subsidiaries would see a larger drop, of $210 billion, which would still be held by the parent bank. The standard applies the same rules to so-called globally systemic important banks as well as their subsidiaries.

The rule would lower capital requirements to range of 3.5% to 4.5% from the current 5%, with subsidiaries put in the same range from a previous level of 6%. ... 

However, Governors Adriana Kugler and Michael Barr, the former vice chair of supervision, said they would oppose the move.

“Even if some further Treasury market intermediation were to occur in normal times, this proposal is unlikely to help in times of stress,” Barr said in a separate statement. “In short, firms will likely use the proposal to distribute capital to shareholders and engage in the highest return activities available to them, rather than to meaningfully increase Treasury intermediation.” ...

 

The decline of worker hours in America

 In 1966 all the hours worked by all the full time and part time workers divided by the civilian employment level peaked at about 35.35 hours per worker per week. That's full time level work. That's prosperity.

The flood of Baby Boomers, especially Baby Boomer women under the influence of feminism and the social revolution of the 1960s, and also foreign born workers after the Immigration Act of 1965, into the labor markets after the mid-1960s reduced hours per week per worker by almost 11%, not forming a new stable bottom until the 1980s at about 31.5 hours per week.

Increased labor supply = fewer hours to go around = less prosperity.

By 1999, when peak Baby Boom had passed 40 years of age, hours per week had risen as high as 32.68 per worker per week. That was the end result of the good times kick-started by Ronald Reagan twenty years prior, which hit in four waves: 1984-85, 1989, 1995, and 1999.

But the whole subsequent period 2003-2019 inclusive fell apart.

Many, many troubles reduced hours worked per worker by almost 7% between 1999 and 2009, not the least of which were admission of China to the World Trade Organization in 2001, and the Great Recession.

Hours per week per worker have risen again as of 2022, but only to the old bottom, at around 31.57 per week.

Median real earnings per week are up just $38 since 1979.

Will that be As Good As It Gets?

 

 

 

This number seems wei tu lo

 

IMF Warns Trump Could Cost the World a Trillion Dollars

The Guardian

 

Is that all?

 

World GDP in 2023 was $106.2 trillion according to the World Bank, whose graph shows that the 2009 Great Recession contraction was $3.34 trillion. The Grauniad is worried that the Trump trade war will cost a third of the 2009 contraction, based on an analysis by the IMF, "the most sober of global institutions" lol.

 

Meanwhile there was a 2015 contraction in global GDP which was much larger, $4.55 trillion. That was much worse than the so-called Great Recession. And much worse than the global impact of COVID in 2020, which was $2.39 trillion according to the World Bank's data.

 

Why isn't this popularly discussed?

 

AI laughably tells me "global GDP did not actually contract in 2015".

 

 

 

 

 

But the World Bank itself traces the 2015 global GDP hit to a massive contraction in trade, at the heart of which was the forced restructuring of the Chinese economy under Xi Jinping, who is a communist reactionary.

 

The sizes of the tariffs of Donald Trump, which far exceed those of the Smoot-Hawley era, especially with trade hegemon China, seem uniquely poised to wreak havoc on a world whose experts today can't draw the obvious parallel to the right year.

In the age of everything that is good is awesome, everything bad must be an emergency

 The Zeitgeist is epitomized by a general hysteria, incapable of proportional thinking and hostile to reason, and so it should come as no surprise that our new leadership is exploiting that for its own ends, mostly to distract you while they make money hand over fist.

Everything is awesome. Everyone is great.

But everything is also a disaster, and the worst ever.

COVID was going to kill us all. The vaccines were going to save us all.

Biden was going to cure cancer. RFK Jr is going to solve the mystery of autism by September.

All those people streaming across the border during the Biden administration were seeking asylum. Now under Trump they were an invading enemy army.

The recession of 2008 had to be The Great Recession, or The Great Financial Crisis, as if 10.7% unemployment in 4Q1982 was the golden age of Ronald Reagan, and over 3,000 savings and loans didn't go belly up during that decade and part of the next.

Heat waves and cold waves are unprecedented, unless you talk to an old person. We have 12 years left before global warming kills us all.

Putin is going to launch a thermonuclear WWIII, same as Saddam Hussein.

So of course trade deficits are suddenly an emergency.

U.S. businesses sue to block Trump tariffs, say trade deficits are not an emergency

 

Real GDP update for Mar 27, 2025

 The third report for real GDP for 4Q2024 and full year 2024 was released today here.

The annual rate of economic growth in 4Q was 2.4%, and 2.8% for 2024.

But here's the big picture.

Real GDP for the 79 years 1929-2008 grew at a compound annual rate of 3.405%.

Real GDP for the 16 years 2008-2024 grew at a compound annual rate of 2.074%, a rate 39% lower.

We have not had, and do not now have, the greatest economy ever at any point since the Great Recession.