America’s Lost Decade – Another One in Progress Now
Courtesy of Mish
The US used to point the finger at Japan’s "Lost Decade" saying "It won’t happen here." But it did. Median wages are nearly 5% lower in real terms than in 2000, the poverty rate is at a 15 year high, and the S&P 500 is about 20% lower than it was a decade ago.
Pleased consider the Wall Street Journal article Lost Decade for Family Income
The downturn that some have dubbed the "Great Recession" has trimmed the typical household’s income significantly, new Census data show, following years of stagnant wage growth that made the past decade the worst for American families in at least half a century.
The bureau’s annual snapshot of American living standards also found that the fraction of Americans living in poverty rose sharply to 14.3% from 13.2% in 2008—the highest since 1994. Some 43.6 million Americans were living below the official poverty threshold, but the measure doesn’t fully capture the panoply of government antipoverty measures.
The inflation-adjusted income of the median household—smack in the middle of the populace—fell 4.8% between 2000 and 2009, even worse than the 1970s, when median income rose 1.9% despite high unemployment and inflation. Between 2007 and 2009, incomes fell 4.2%.
Lost Decade Lowlights
- Americans living in poverty rose sharply to 14.3% from 13.2% in 2008
- Poverty level is the highest since 1994
- 43.6 million Americans are living below the official poverty threshold
- Inflation-adjusted income of the median household fell 4.8% between 2000 and 2009
- The number of 25-to-34-year-olds living with their parents rose 8.4% to 5.5 million in 2010 from 2008
- Child poverty rose to 23.8% for kids under six in 2009, compared to 21.3% a year earlier
Census Bureau Charts
Here are a few select charts from Income, Poverty, and Health Insurance Coverage in the United States: 2009, Issued September 2010.
click on any chart for sharper image
Real Incomes 1967 to 2009
Poverty Rates 1959 to 2009
In general, the chart shows the "War on Poverty" was a failure regardless of what political party was in office. The odd pair of Clinton and Nixon did the best, while Carter and George W. Bush the worst. Reagan and George H. Bush both had roller coasters ending about where they started, while Ford essentially experienced a flatline.
Since the start of the "War on Poverty" in 1964, President Johnson did the best in absolute terms. However, a war on poverty via a "Guns and Butter" policy including an insane War in Vietnam can hardly be considered a success.
Ironically, and as is typical of government programs, we made far better progress before the "War on Poverty" started. Since then, some 46 years later, we are just about where we started.
Descent Into Poverty
The Minneapolis Star Tribune reports on a Descent Into Poverty For Millions
Ramsey County human services planner Jim Anderson didn’t need Thursday’s census report to know that poverty has climbed sharply since the economy collapsed in 2008.
Last month he turned away 59 adults with 126 children seeking emergency shelter for families.
In a report that confirmed what experts like Anderson have sensed, the U.S. Census Bureau said Thursday that the nation’s poverty rate shot to 14.3 percent last year, the highest in 16 years, and that one in five American children were living below the poverty line.
With one in seven Americans in poverty, demand for emergency financial help has skyrocketed. Advocates across the Twin Cities say that homeless shelters are overflowing, food shelves are strapped and church basements are filling up.
Nikkei Monthly Chart
For the Japanese Nikkei Index it has been two lost decades going on three.
S&P 500 Monthly Chart
For the S&P 500 it has been one lost decade going on two.
Given the structural problems in the US, there is no strong reason to think this decade will be much better than the last.