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The following article appeared in Left Business Observer #130, November 2010. Copyright 2010, Left Business Observer.
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What a damn mess
You were under the impression
That when you were walking forward
You'd end up further onward
But things ain't quite that simple.
—The Who, “I've Had Enough” (1973)
The time seemed ripe for a comprehensive look at the state of the U.S. economy—not the usual a little of this, a little of that approach, but some measure of how it all fits together. It will come as no surprise to most readers that the state is dismal. Not only are the masses doing rather poorly, but even the most orthodox measure of all, GDP growth, is in the tank. But this is not perceived as an emergency in some circles, because the elite is doing very, very well.
Let's start with that fetishized measure, GDP growth. As the graph above shows, the average growth in real GDP per capita for the 2000–2010 decade has been 0.7%. (Yes, the decade isn't over, but it's only got a quarter to go. It would take a Chinese rate of growth—almost 13%—in the fourth quarter of this year just to get the decade average up to 1%.) You might object that decades are arbitrary forms of periodization, which they are (and what isn't?), though they do have some cultural purchase.
If you look just at trend rates of growth, using a statistical technique called a Hodrick–Prescott filter, the underlying rate of growth in the U.S. economy is now 0.3% a year, the slowest ever by a long shot, and less than a fifth its long-term average.