Nope, nothing to do with the fading glory of the Tea Party. Think mystical gypsy-like economists looking for signs of truth in their morning brew. For those who continue to cite “statistics” showing how much our economy has improved of late, common sense for most Americans just doesn’t jibe with this assessment. The problem is that statistics need to be ripped apart to understand what they really mean, and too many politicians on either side of the aisle prefer to skew the results in ways that support their political leanings. It doesn’t help to know that incomes are going up when the growth (corrected for inflation) has been pretty much relegated to the highest income earners. Or that costs have risen faster than incomes have risen.
Generate a blended average, where (corrected for inflation) normal Americans are watching their buying power slip-sliding away, with fund managers and highly-placed corporate bigwigs who have never made so much money, and you get a healthy glow for the economy as a whole. It doesn’t matter that the middle class is contracting, with former members moving down the economic ladder, and that the richest 400 Americans own more wealth than the bottom 50% of the entire country!
Show unemployment statistics that drop each month, and you can brag that you’ve got the job picture back on track. Forget about those who can only get part-time or short-term contract work. Don’t even think about those who have given up looking, particularly those who are over 50. And ignore the fact that most of the newly created jobs pay less and require more hours than the same jobs generated before the great economic reset. Just look the other way as college costs have pushed college enrollment to its lowest level in years. America is simply polarizing like a banana republic. Those at the top are nailing it (“Let them eat cake!), and everyone else is living with less, and expecting even less going forward.
The little common sense proof of this overall downward trend slips in to the statistic mix in big ways and then… occasionally… in little numbers that scream the truth. For those old enough to remember, back a decade or two ago, on average we replaced our shiny new cars every two to four years. It was the American way. Well, those days appear to be gone forever, taking enough income jobs out of the car marketplace to have bankrupted General Motors and Chrysler during the recent “worst of times.” Those revenues are jobs have fallen to the new reset level, and that is life in America!
People talk about how there are signs average people are making more money, but they have to spend more on everything from food, housing, healthcare and fuel. In the end, they are making effectively less, watching their discretionary incomes erode every year. Here’s one of those “little-watched statistics of truth” that says it all: “The Bureau of Labor Statistics said in an analysis published this month that the average age of household autos increased from 10.1 years about 11.3 years between 2007 and 2012, while the average household income rose from $63,091 per year to $65,596 during the same period.
“The share of newer vehicles, or those less than 5 years old, dropped from 22 percent to 15 percent during that timeframe, while the proportion of older autos, or those manufactured at least 11 years ago, jumped from 34 percent to 42 percent… The numbers, which come from the agency’s Consumer Expenditure Survey, suggest Americans started holding onto vehicles longer after the start of the recession but have not reversed that trend since their incomes started to rebound.” Washington Post, May 9th.
Incomes started to rebound? Someone forgot to factor in the higher costs. Net earnings(what we have after our basics are covered) continue to drop. The car sales numbers speak the truth of our new economic situation. Those “average statistics” lie with a big grin!
I’m Peter Dekom, and planning for a solution for the “big new bad economy” has to start with recognition of underlying truths!
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