3 ms·

I don't get it - if you're on any kind of growth curve at all, you should be getting wealthier. The drop from a 3% curve to a 2% curve just means you're gettin

I don't get it - if you're on any kind of growth curve at all, you should be getting wealthier. The drop from a 3% curve to a 2% curve just means you're getting wealthier slower, but you can't lose wealth unless the growth goes negative. He's right about not being able to afford his dad's house, but that's because when his dad bought it, it was probably a middle-income area. Now, thanks to city growth, it's probably a middle-to-upper income area. So he's comparing apples to oranges.

knieveltech 16y ago
If inflation is higher than economic growth you get wealth destruction.
- mechanical_fish 16y ago
  So, having found one or two glaring factual errors in the piece, I went looking for more. I can't easily find a chart of real GDP growth since 1950 from an official source, but I did find the chart on this page - you have to scroll down. http://www.valueinvest.org/27.html http://www.valueinvest.org/27.html Look for "GDP growth vs S&P 500 returns", the blue line. This should, I believe, correct for inflation - that's what the whole "corrected for CPI" thing is about. Interesting things about this graph: national real GDP has been growing, and there is no obvious discontinuity in the 1970s - sure, there was a big recession then, but that's just a jog in the chart. Squinting at the data, it looks like the average rate of growth is about the same immediately before and after the 1970s; if anything the rate of growth is a tiny bit higher since then. So, either this chart is bogus or the OP is bogus. Having already caught the OP citing false facts about domestic manufacturing output, I have my suspicions. But feel free to cite a better GDP chart; it will be nice to have in the files for when the next nonsense article comes along.
  - blueben 16y ago
    Instead of considering GDP alone, perhaps we need to be considering share of GDP. We are significantly more people today than we were in 1950.
    - didroe 16y ago
      One of the charts in that link is GDP per capita adjusted for CPI, and it's still shows growth at a pretty constant rate.
  - apsec112 16y ago
    "Squinting at the data, it looks like the average rate of growth is about the same immediately before and after the 1970s; if anything the rate of growth is a tiny bit higher since then." Look at actual wages, which stopped increasing in the early 1970s. http://static.seekingalpha.com/uploads/2009/9/13/saupload_us_census_burea_median_income.png http://static.seekingalpha.com/uploads/2009/9/13/saupload_us... (This shows household income, which is slightly increasing, but only because more women are in the workforce now than in 1970; personal income is stagnant.)
    - eru 16y ago
      What if there were more single households?
- bokonist 16y ago
  The growth curve includes inflation. But both the calculations of growth and inflation are utterly untrustworthy.
pohl 16y ago
Only if that 2% growth curve is outpacing inflation, though, right?
yequalsx 16y ago
Well, it's possible for their to be distortion from the top x% garnering a disproportionate amount of the growth in wealth. So while a country grows 2% per year the concentration could be at the top. This causes variation in wealth distribution to increase and this is what leads to the perception of people getting poorer. Poverty is a relative measure. In the past 30 years in the U.S. wealth has dramatically shifted to the top 1%. That is, the top 1% have a much higher portion of the nation's overall wealth today than they did 30 years ago.

knieveltech 16y ago

If inflation is higher than economic growth you get wealth destruction.

mechanical_fish 16y ago
So, having found one or two glaring factual errors in the piece, I went looking for more. I can't easily find a chart of real GDP growth since 1950 from an official source, but I did find the chart on this page - you have to scroll down. http://www.valueinvest.org/27.html http://www.valueinvest.org/27.html Look for "GDP growth vs S&P 500 returns", the blue line. This should, I believe, correct for inflation - that's what the whole "corrected for CPI" thing is about. Interesting things about this graph: national real GDP has been growing, and there is no obvious discontinuity in the 1970s - sure, there was a big recession then, but that's just a jog in the chart. Squinting at the data, it looks like the average rate of growth is about the same immediately before and after the 1970s; if anything the rate of growth is a tiny bit higher since then. So, either this chart is bogus or the OP is bogus. Having already caught the OP citing false facts about domestic manufacturing output, I have my suspicions. But feel free to cite a better GDP chart; it will be nice to have in the files for when the next nonsense article comes along.
- blueben 16y ago
  Instead of considering GDP alone, perhaps we need to be considering share of GDP. We are significantly more people today than we were in 1950.
  - didroe 16y ago
    One of the charts in that link is GDP per capita adjusted for CPI, and it's still shows growth at a pretty constant rate.
- apsec112 16y ago
  "Squinting at the data, it looks like the average rate of growth is about the same immediately before and after the 1970s; if anything the rate of growth is a tiny bit higher since then." Look at actual wages, which stopped increasing in the early 1970s. http://static.seekingalpha.com/uploads/2009/9/13/saupload_us_census_burea_median_income.png http://static.seekingalpha.com/uploads/2009/9/13/saupload_us... (This shows household income, which is slightly increasing, but only because more women are in the workforce now than in 1970; personal income is stagnant.)
  - eru 16y ago
    What if there were more single households?
bokonist 16y ago
The growth curve includes inflation. But both the calculations of growth and inflation are utterly untrustworthy.

pohl 16y ago

Only if that 2% growth curve is outpacing inflation, though, right?

yequalsx 16y ago

Well, it's possible for their to be distortion from the top x% garnering a disproportionate amount of the growth in wealth. So while a country grows 2% per year the concentration could be at the top. This causes variation in wealth distribution to increase and this is what leads to the perception of people getting poorer. Poverty is a relative measure. In the past 30 years in the U.S. wealth has dramatically shifted to the top 1%. That is, the top 1% have a much higher portion of the nation's overall wealth today than they did 30 years ago.