4 ms·

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

mechanical_fish 17y 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 17y 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 17y 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 17y 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 17y ago
    What if there were more single households?
bokonist 17y ago
The growth curve includes inflation. But both the calculations of growth and inflation are utterly untrustworthy.

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 17y 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 17y 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 17y 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 17y ago
  What if there were more single households?

bokonist 17y ago

The growth curve includes inflation. But both the calculations of growth and inflation are utterly untrustworthy.