What If We’re in a Depression But Don’t Know It?

Just for the sake of argument, let’s ask: what if we’re in a Depression but don’t know it? How could we possibly be in a Depression and not know it, you ask? Well, there are several ways we could be in a Depression and not know it:

1. The official statistics for “growth” (GDP), inflation, unemployment, and household income/ wealth have been engineered to mask the reality

2. The top 5% of households that dominate government, Corporate America, finance, the Deep State and the media have been doing extraordinarily well during the past eight years of stock market bubble (oops, I mean boom) and “recovery,” and so they report that the economy is doing splendidly because they’ve done splendidly.

I have explained exactly how official metrics are engineered to reflect a rosy picture that is far from reality.:

What’s the Real Unemployment Rate? That’s the Wrong Question September 14, 2016

Fun with Fake Statistics: The 5% “Increase” in Median Household Income Is Pure Illusion September 19, 2016

Here’s Why Wages Have Stagnated–and Will Continue to Stagnate August 15, 2016

Could Inflation Break the Back of the Status Quo? August 5, 2016

What Happens When Rampant Asset Inflation Ends? August 4, 2016

Revealing the Real Rate of Inflation Would Crash the System August 3, 2016

Inflation Hidden in Plain Sight

I also also asked a series of questions that sought experiential evidence rather than easily gamed statistics for the notion that this “recovery” is more like a recession or Depression than an actual expansion:

If Everything Is So Great, How Come I’m Not Doing So Great? September 12, 2016

Rather than accept official assurances that we’re in the eighth year of a “recovery,” let’s look at a few charts and reach our own conclusion. Let’s start with the civilian labor force participation rate–the percentage of the civilian work force that is employed (realizing that many of the jobs are low-paying gigs or part-time work).

Does the participation rate today look anything like the dot-com boom that actually raised almost everyone’s boat at least a bit? Short answer: No., it doesn’t. Today’s labor force participation rate is a complete catastrophe that can only be described by one word: Depression.

Wages as a percentage of GDP has been in a 45-year freefall that can only be described as Depression for wage earners:

Notice what happened when the Federal Reserve started blowing serial asset bubbles in 2000: GDP went up but wages went down. Is this a recession or depression? It’s your call, but if you’re the recipient of the stagnating wages, it’s depressing.

Meanwhile, the top 5% who own most of the assets that have been bubbling higher have been doing great. The Depression is only a phenomenon of the bottom 95%:

Look at the rocket ship of corporate profits. What happened around 2001 to send corporate profits on a rocket ride higher? The Fed happened, that’s what:

Here’s the Fed balance sheet: to the moon!

Free money for financiers and corporations fueled the stock market buyback boom:

Which fueled the stock market bubble:

Is the economy in a Depression? Not if you’re a corporate bigwig skimming vast gains from corporate buybacks funded by the Fed’s free money for financiers.

But if you’re a wage earner who’s seen your pay, hours and benefits cut while your healthcare costs have skyrocketed–well, if it isn’t a Depression, it’s a very close relative of a Depression.

 

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  • diogenes

    A great many of us have known it where we live and for many years now — more than half of America, whether we “know” it or not, know it. Bullshit doesn’t pay the rent. Bullshit doesn’t buy groceries or pay the utility monopolies. But bullshit rules anyways. Who hires the bullshit?

  • ICFubar

    The charts depict neo-liberal economic ideology on steroids. A well known analyst has stated that since eq

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  • slorter

    In most countries of the world, recovery from the Great Depression began in 1933. In the U.S., recovery began in early 1933, but the U.S. did not return to 1929 GNP for over a decade and still had an unemployment rate of about 15% in 1940, albeit down from the high of 25% in 1933. We are definitely hiding the figures as the official government figures are a farce!

    • diogenes

      Statistically, the American Depression of the 30s had two bottoms. It dropped precipitously from late 1929 through 1935 (with “prosperity is just around the corner” trumpeted on all sides at all times for six years) and then, when a trickle of federal “relief” finally started, a slow climb out of the trough began. In 1935 unemployment was at least 25%. After the Dems won the 1936 elections FDR cut relief funding and the economy started back downhill. It hit the deepest trough of the 30s in 1938. And, as slorter points out, the Depression continued in 1940 and in fact well into 1941.

      • slorter

        Interesting aside my fathers first steady job after the depression was in 1939. He was hired to make bullets at a copper factory! Crazy world is it not!

        • diogenes

          Much more revealing is the fact that in Europe, the Depression was OVER b y 1935-36, whereas it lasted until 1941 in the country ruled by Wall Street. Today, Wall Street obviously intends the present depression as permanent. So far it’s working.

  • Chowderhead

    The Fed has rates at all time lows and the stock market is at historic highs, you would think rates should be 4-5 percent.Unemployment is also only 5 percent.America’s politician’s and bankers are living in a fantasy surrounded by walls of bullshit !