Some people look at industrial production and see only stagnation since the Great Recession, I see something else

 Industrial production last grew above 10% in the first half of 1984, and it's been all downhill since then.

A positive trend struggled to assert itself in the immediate post-war, but eventually succumbed to the siren song, for you Odyssey fans, of foreigners singing the song of lower labor costs.

Our country decided after the struggle of the Great Depression and the victory in the Second World War to sit back and enjoy itself rather than to work as hard as it needed to work and to let others carry the load.

And I will say to my soul, Soul, thou hast much goods laid up for many years; take thine ease, eat, drink, and be merry. 

-- Luke 12:19 

1946-1984

Peak Baby Boom 1957 reaching full retirement age in 2023 is driving a new exodus from the labor force making 2023 the biggest single year rate spike in new Social Security enrollments since 2009

 New Social Security retirement enrollments experienced a significant +5.01% spike in 2023, marking the largest single-year growth rate since the conclusion of the recession wave in 2009. 

Peak Baby Boom started in 1957 and ended in 1961, with an average of 4.3 million births in each of the five years.

If you were born in January 1957, you reached full retirement age in July 2023 and were eligible for your first payment in August 2023. A person born in December 1961 is eligible for their first payment in December 2028. 

This means the new exodus out of the labor force and into retirement and into the not-in-labor-force category will last from mid-2023 into 2029, a tsunami crashing out of the economy as these individuals become 66+ and 67 years old in their turn. Full retirement age is 66+6 months for 1957 (2023+), 66+8 months for 1958 (2024+), 66+10 months for 1959 (2025+), and 67 years for 1960 and 1961 (2027, 2028).

This exodus will combine with AI to incentivize reductions in force in corporate America, and we're already witnessing it.

For 2024-26 to date, layoffs have been running ~766k/yr on average annualized ahead of the average 20 million layoffs per year. Announced corporate job cuts late 2024-25 were ~720k, the highest in 15 years.

Trump reductions in force for the federal government at ~250k net contribute but are a sideshow by comparison.

Perhaps fortunately, the Baby Bust of 1973-1976, when annual births crashed to multi-decade lows of 3.1 million per year, means fewer people in their fifties exist to be victimized by AI like Baby Boomers were victimized by the Great Recession in 2009.

But the shrinking talent pool snaking its way through the economy may also be a reason driving AI in the first place.

The problem of unintended consequences is inescapable.

One thing we could fix though is "disabled workers". The Dot Com Bust and The Great Recession didn't suddenly disable anybody, but that's what the data shows.

They exploited a chink in the armor of the Social Security system, and are one big reason the system is teetering.

The Bush and Obama administrations both let it happen because they wouldn't, or couldn't, address the consequences of job loss in a straightforward manner, so they burdened the system instead with a wink, a nod, and an averting of the gaze.

Well, just look at the damn thing. ↓ 

  

Rush Limbaugh's 106.189 million eating, but not working, a new high, in Trump's America!

Slow news day: Twenty days after the figure was updated the New York Post finally does a story on it

 Shocking 105 million Americans are not working – more than during COVID or the Great Recession

The first half of 2026 is falling far short of a new golden age for workers, and isn't even as good as 2019

The worst indicator is full time employment, which is running more than 2 points behind Trump's best showing in the second half of 2019. Just 48.65% had a full time job in 1H2026, and the high pre-Great Recession levels look more unachievable than ever. It is summer time and this is when we should be feeling the purported boom most acutely and we are not.

On a similar semiannual average basis, nearly 400k more workers than at the lows in 2019 want to work but are so discouraged they have dropped out. The spread between June 2026 and October 2019 is nearly 600k.

The overall number of unemployed in the first half of 2026 is 1.633 million higher than it was in the second half of 2019, 7.413 million vs. 5.780 million. The level averaged 7.6 million when Trump was elected in 2016.

The broadest measure of unemployment, the U6RATE, is 8%. In the second half of 2019 it was 6.9%, the lowest on record to the time, but Biden beat that in 2022/2023. Are we really not ever going to break Biden's two-time record low of 6.7%?

Was that the golden age?

The thing I worry about most is initial and continuing claims for unemployment. They are both on a run at historic lows.

How much longer can they keep it going like this?

Haley Stevens after debate with Abdul El-Sayed: I’m also not a millionaire like Abdul is, he won’t release his tax returns

 

 It's always great to see the pretensions of progressives skewered.

Democratic Senate candidates sling mud in post-debate spin room 

 ... “Standing up for Michiganders when their jobs were on the line during the Great Recession, standing up for Michiganders when their jobs were on the line yet again during COVID and the COVID pandemic and securing our manufacturing supply chain. I work to get things done. I am not trying to be a celebrity or famous or to sell a book or to push a podcast. I’m also not a millionaire like Abdul is. I am a hard-working gal who rolls up my sleeves, fights like heck for Michigan and delivers for us.” ... 

 

This housing bill will not help people become homeowners by freeing up existing supply

 House passes affordable housing bill, sends it to Trump’s desk

The U.S. House voted Tuesday night 358-32 in favor of a sprawling housing package designed to lower costs for homebuyers and increase supply. ...                                       

The broad bi-partisan support for the bill tells you it won't do much for very many people anytime soon.

But expect the politicians to brag on it as silly season ramps up. 

A key provision of the bill caps institutional investor ownership of single family homes at 350 from here on out.

Investors already owning single family homes, however, at whatever level, are grandfathered in. Blackstone, for example, owns approximately 58k such homes. It is thus prevented from buying number 58,001 under the bill.

That means that the approximately 530k+ homes currently owned by institutions, which is only about 4% of the single family housing rental pie, will not be forcibly sold into the market.

About 87% of the pie is individual investors who own in the neighborhood of 1-5 homes. There will be no change mandated there either, which is where most of the available single family housing stock is. 

There are 46.4 million renter-occupied housing units in the United States in the first quarter. Of those, approximately 11.3 million are single family homes. That means that the number of owners of those rental homes ranges roughly between 9.8 million and 2 million individual investors, probably living in a rich suburb right near you.   

The bill does prevent umbrella companies from owning multiple small entities created by individual investors to beat the 350 cap, with stiff penalties, so that is good.

The problem is this bill entrenches the status quo of the rich preying on both ends of the housing spectrum.

Mobile homes in parks are not considered single family homes under the bill. They are considered multi-unit commercial real estate. Private equity investors are notorious for buying up these parks full of affordable housing and jacking up lot rents on approximately 4.3 million homesites to the moon. Up to 12 million mostly low income Americans live in such parks.

The bill eliminates the mobile chassis rule for new manufactured homes, marginally reducing their cost. But imagine parking one in one of those parks and being unable to move it while the landlord holds a rent gun to your head. There are other provisions in the bill to help these existing park owners, and the mobile home owners who live there to borrow more to pay the greedy bastards.

11.3 million hostages to the rich on the front end, 12 million on the ass end. 

The bill had passed in the U.S. Senate 85-5 on Monday. 

Since the beginning of the 21st century in the United States, growth of renter-occupied housing continues in the ascendant while growth of owner-occupied housing continues south.

We still live with the deleterious effects of the Great Recession, when more than 6 million residences were completely foreclosed in the United States, and this is the best our elected representatives can do almost two decades on. 

Congress is already getting Mamdanied as this goes to Trump for his signature.

 

 

 

The Maestro is dead, long live The Maestro

 

 Greenspan had the main ideas right:

Low inflation over full employment, because inflation is the worst tax on the people;

And broad property ownership as the foundation supporting the American economy and securing the consent of the governed.

During his nearly 20-year tenure, the Federal Funds Effective Rate averaged 4.87%. 

This is a really good look at Greenspan's career from Marty Steinberg at CNBC. It is one of the best reads I've had at CNBC in a long time. 

 Alan Greenspan, former chairman of the Fed, dies at age 100

... Throughout, he focused on fighting inflation over promoting full employment. His supporters say he presided over the longest economic expansion in U.S. history, but critics said Greenspan’s low interest rate policies set the stage for the housing bubble that burst into the Great Recession a year after his successor, Ben Bernanke, took the Fed helm.

... in his best-selling memoir “The Age of Turbulence,” he defended the low-rate policy, which encouraged people to buy homes: “I believed then, as now, that the benefits of broadened homeownership are worth the risk. Protection of property rights, so critical to a market economy, requires a critical mass of owners to sustain political support.” ... 

Newsweek's broadest case against Trump economy doomers is real GDP per capita lol

 

Five Numbers That Defy the Trump Economy Doomers

Newsweek

... The broadest case against the collapse narrative starts with real GDP per capita, which reached $70,502 in the first quarter of 2026, according to Bureau of Economic Analysis (BEA) data. ... it is hard to describe an economy as broadly broken when the country is producing more inflation-adjusted output per person than at any point before. ... 

 

If GDP per capita were making America great again, you'd expect it to look more like it did in the post-war from 1947-1984, when we routinely had years with percent change above 4%.

 

Since 1984 we were lucky to get 3% years, and after the Great Recession 2%.

 

The trend since the Trump tax reform in 2017 is flat, merely a continuation of the status quo ante where a 2% year is a win. 

 

This is a picture of an aging economy which has slowed down like an old person slows down. It's still managing, but one of these days it's going to need a nursing home.

 

The idea that more tax cuts will stimulate domestic economic growth has been proven wrong by the Reagan tax cuts. His cuts fueled foreign economic growth, because our rich people weren't very patriotic about what they did with their money.

 

Economic growth requires domestic investment. And we need smart people who know how to coerce that with tax and broader public policies.

 

Donald Trump is not that guy. 

 

 

 

 

US economic growth peaked during the Reagan administration because America is a debt-based economy and we turned our backs on the formula during it

 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. 

 

 

I stopped caring about this particular economic measure when I realized that it obscures the fact that the top 20% in this country receive 60% of the income it displays

Frankly, most of the economic charts produced by the government do this kind of thing.

Most of the time the rich use this data to tell you how well things are going, when what they really mean is how well it's going for them.

It's an aggregate measure, so that the vast sums earned by the rich distort higher what's actually happening to the majority. 

In the as-reported numbers at the time, everything actually went sideways for a time during the Great Recession and personal income actually fell, except that even that decline disappeared as the revisions to the data came in. The rich still made money in the Great Recession, enough to lift this aggregate measure ever higher right through the recession even as banks failed by the hundreds and millions lost their jobs and homes.

But the rich use this particular data set right now to tell you things like "you don't know how to shop" and "groceries have never been cheaper", you ignoramus.

They controlled roughly 60% of all income from 2020 to mid-2025, and the top 20% by wealth held nearly 72% of total household wealth as of Q4 2025. 

The top 20% received roughly $14 trillion of the $23 trillion in this chart in March 2026, leaving the remaining $9 trillion, 40%, to be split by the 80%, the rest of us, however we must.

Rising prices of anything will naturally impact the 20% far less than the 80%.

It's another "let them eat cake" moment.

 

 

Elusive full-time jobs which fell off a cliff in the Great Recession hold back couple from having the children they want

52% had a full time job on average in 2007, just 49% in 2025

 

 ... Clare Zakowski, a 28-year-old who works part time as a manager at a therapy practice, says she would welcome a federal paid family leave program, not that Congress is offering. She has always loved children; as a high schooler in Green Bay, Wis., she babysat and ran the activities for a summer camp. “I love their naïveté and innocence,” she told me. “I just think kids rock.” Ms. Zakowski has been with her boyfriend for over seven years, and children have been part of the discussion since the two first got together. But lately, she has been appalled by the manosphere, and worries about how A.I. will affect society. “The news every day is crazy, and it’s been that way for a while,” she said. “It just feels like we’re living in a really, really weird time.” Beyond paid leave (or universal health insurance, for that matter), she yearns for something deeper: a sense of security, something that she has yet to experience in America in her adult lifetime. “I feel like there’d have to be, I want to say a revolution, but basically big political change, like a moral awakening from everyone,” she said.

She had been looking for a full-time, higher-paying job to set herself up for parenthood, but found the search to be so stressful that she gave up. “I know there can be negatives to not planning ahead,” she told me, but “who even knows what the future holds?” ...

More. 

 

Birth dearth blamed on chaos and uncertainty produced by the Great Recession

 ... In the aftermath of the financial crisis of 2008, however, sometimes referred to as the Great Recession, births in Norway, Denmark, Sweden and Finland declined, and then declined some more, even as their economies recovered throughout the 2010s. Little about those nations’ family policies had changed, and as far as anyone could tell, men were still doing their share of the dishes. The same downward trend held in the United States, where births have fallen by about 23 percent since 2007, despite high rates of immigration until last year. Births have also been declining in East Asian countries, even though governments in the region have thrown buckets of money at the problem. And in France, despite its longstanding pronatalist policies. 

... What unites these disparate cultures, policy environments and demographics, researchers are now realizing, is young people’s inescapable and crushing sense that the future is too uncertain for the lifelong commitment of parenthood. Call it the vibes theory of demographic decline.

... The two generations currently of childbearing age bear the psychological and financial scars of coming of age amid world-scale catastrophes: Older millennials entered the labor market during the Great Recession; many watched their parents lose their jobs or homes. Members of Gen Z, whose lives were upturned by the Covid-19 pandemic, now find themselves competing against A.I. for entry-level jobs and even prospective partners. The man running America seems single-mindedly devoted to chaos at home and abroad. ...

More. 

Core pce inflation is raging at 3.2% year over year in March, 109% above normal, and the Congress, the president, and the Fed are doing ZERO, ZIP, NADA about it

 The Fed met YESTERDAY and left the federal funds rate unchanged even though this is their primary indicator of inflation and it is more than double the average rate post-Great Recession.

There were just three votes with the temerity to suggest that inflation might be a problem right now. 

But SPX is up! one half of one percent at this hour, threatening to make another all time high. That's all that matters!

None of them give a shit about YOU!

 

48.4% had a full time job in Feb 2026, similar to Jan 2009 when everything was so wonderful and getting wonderfuller

 

I keep hearing what a smart guy Jeffrey Epstein was, but his explanation for the housing crisis and the Great Recession doesn't hold up

 In a nutshell, Epstein blamed the whole debacle on Bill Clinton, saying Clinton did what he did for votes. 

Unfortunately for Epstein, Fannie Mae eased credit requirements to encourage banks to lend to people with lower credit scores starting in 1999. Clinton didn't need any votes in 1999.

 

Nor did he in 1997 when Clinton signed the Taxpayer Relief Act w/ its $500k home sale exclusion & 2-yr rule, turning homes into commodities.

 

But of course Epstein wasn't smart enough even to understand the role of the latter, and never mentioned it.

 

Clinton deserves blame for making the mistakes he made, and so does the Congress for voting for it all, but Clinton most certainly didn't make them to get votes.

 

A person who thinks that is just a political hack.

 

 

 

 

GDP in 2025 would be double what it is had economic growth continued after 1984 at the 1929-1984 compound annual rate of 6.869%

 Nominal GDP in 2025 would be $61.524 trillion instead of $30.778 trillion had economic growth continued at the 55-year 1929-1984 compound annual rate of 6.869%.

That's the difference the 26% reduction in the growth rate to 5.079% has made in the 41 years since 1984.

The compound annual growth rate since the Trump tax reform from 2017 has been slightly, but not a lot, better at 5.795% on an annual basis. Measured 4Q on 4Q over the 8 years the compound annual rate is a little better still at 5.814%. 

Meanwhile the seasonally adjusted annual rate of real GDP growth fell from 4.4% in 3Q2025 to 1.4% in 4Q2025 in today's report: 

Fourth-quarter U.S. GDP rose just 1.4%, badly missing estimate; inflation firms at 3%

American leadership continues to avoid the elephant in the living room of economic growth.

1984 marked the turn, contrary to Ronald Reagan, when America's best days truly were behind her, and economic growth then hit the big brick wall after 2007 and nothing anyone has done has fixed it.

In the 78 years to 2007 nominal GDP (GDPA) grew at a compound annual rate of 6.525%, but only at 4.281% in the 18 years since then.

The corresponding real values are 3.448%, and . . . just 1.982%.

Yes, that's right. Real GDP (GDPCA) has been growing at sub-2% since 2007. 

Politicians who talk up economic growth aspire to better days but do not deliver.

The first step to authentic economic recovery means admitting that you have a problem. 

 

I'm so old I remember when Jan 2026 full time employment at 48.79% of population was Great Recession level bad

 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%. 

 

 

 

Ford Motor blames tariff timing and fires at an aluminum plant for earnings miss when it was its electric vehicle business

 

Ford reports worst quarterly earnings miss in four years, guides for better 2026

 

... On an unadjusted basis, the company’s net loss of $8.2 billion last year was its largest since the Great Recession in 2008, according to FactSet. That included $15.5 billion in special charges during the fourth quarter largely related to a pre-announced pullback in its all-electric vehicle plans.

Automakers commonly exclude “special items” or one-time charges from their adjusted financial results to provide investors with a clearer picture of their core, ongoing business operations.

Ford reported a fourth-quarter net loss of $11.1 billion, or a loss of $2.77 per share, compared with net income of $1.8 billion, or 45 cents per share, in the same period in 2024. Adjusted for the one-time charges, the company reported earnings of 13 cents per share.

 

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. ...