Popular opinion and press punditry has it that we’re still in a recession, the Great Recession, that started in 2008 and has gone on for five years now.
The reality is that real national income — Gross Domestic Product adjusted for inflation — has grown in every quarter since July 2009. The economy is growing, and has been growing for three years now.
And it’s not growing slowly. Economic growth has been running at an average annualized rate of 2.4%. That’s a bit above America’s historical average growth rate of 2.1%. No problem there.
We’re not in recession. The problem isn’t that the economy is stagnant. The problem is that all the country’s growth is going to a very small number of people.
About 30,000 American households are experiencing growing incomes. They live, work, and shop in the American plutonomy. Corporate profits are up; CEO pay packages are up; luxury goods sales are up.
Presidential campaign mega-donations are definitely up.
It’s not the economy that’s stagnant. It’s the realonomy that’s stagnant. The realonomy is where ordinary Americans live, work, and shop. The realonomy isn’t growing at an average annualized rate of 2.4%. It isn’t growing at all.
In other words, we’re seeing double-digit growth for the very rich and no growth for everyone else … for an overall average of 2.4%.
But stagnation in the realonomy is nothing new. The realonomy has been stagnant or in recession since 1999. The realonomy may have hit bottom in 2009, but it still hasn’t bounced back. It’s just bouncing along on the bottom.
The problem isn’t a lack of growth. We have growth. The plutonomy is growing like crazy. Government should be redirecting the benefits of that growth to the rest of us. Growth in the realonomy has to come before profits for the plutonomy. As a matter of good public policy, that’s a no-brainer. As a matter of practical politics … that’s another story.