You know, we really don't need a ream of statistics and a cadre of expensive analysts to understand the real economy. Here are a few charts; they are enough.
- First and foremost, Unemployment. Literally, off the charts.
- Secondly, Real Earned Income. Average real weekly wages for jobs in the private sector are 16% lower than in 1972. Nixon was President, there was a draft for the military and people drove muscle cars.
- Third, Household Debt as a percentage of disposable income. It took 40 years to rise from 60% to 100%; and then a mere five years to soar to 135% (a.k.a. Sudden Debt).
Data: FRB Z1
- Conclusion: Though it has just blown up in our hands, this crisis was a long time in the making and won't go away in a few quarters.
Restoring balance to the economy will take a lot more than bailing out the financial system. It will require a Great Reset of society, a rebalancing of our values and attitudes on consumerism, assets, incomes, resource utilization and climate change.