The Recovery Is Real, but Large Parts of U.S. Are Left Behind


WASHINGTON — The eye-popping improvement in economic fortunes last year raises the question: If incomes are up and poverty is down, why is Donald J. Trump’s message of economic decay resonating so broadly?
The answer is in plain sight. While the economy finally is moving in the right direction, the real incomes of most American households still are smaller than in the late 1990s. And large swaths of the country — rural America, industrial centers in the Rust Belt and Appalachia — are lagging behind.
“We ain’t feeling too much of all that economic growth that I heard was going on, patting themselves on the back,” said Ralph Kingan, the mayor of Wright, Wyo. “It ain’t out in the West.”
That bleak reality helps to explain why the good news the Census Bureau issued Tuesday about a rise in household income was greeted gleefully by economists but is unlikely to change the complexion of the presidential race.


I question even the “reality.”


That is because the article is BS meant to misdirect.


Yes, the timing of this can’t be more suspect.


Just my opinion: I don’t doubt the figures “much”. With much meaning that whatever way the government wants the figures to go, they are over in that way. They always do that & then months later they change them either up or down. That’s normal, stupid but normal.
Now as to the economy improving, well it’s probably true as a whole. But you have to understand that the U.S. is huge & there are lots of unique mini economies all going at the same time. Remember 3 or 4 years ago when the economy was really in the toilet? Well here in my area it was boom time because of oil. Rents more than doubled. Mechanics who owned businesses were shutting down because they could make more money working in the oil field. Booming with a capital B. Thank goodness it has slowed down.
But let’s take right now. CA land of social programs is hurting (they’ve improved but not a lot). Jobs aren’t back, housing probably haven’t come all the way back & in general they have a little better than sluggish economy (last I heard). But what they do have is a high Tax rate. That means that a lot of companies there are hurting & a fair amount of them are thinking about moving or moving. The tech industry for some reason loves Austin Texas. Some reason being lower taxes, lower costs & a state that looks at businesses as being good rather than evil. Last I heard 50 people PER DAY were moving to Austin & new jobs are being created for them all the time. My guess is that the southern part of Texas is overall going through a boom even if every town isn’t feeling it.
Then there’s people retiring that don’t want to shovel snow every year. A lot of them are moving south. Probably Florida is seeing most of that but certainly Texas gets some of it. Again lower tax rates also help.
So what I’m getting at is that the U.S. is so big there is no real “only 1 economy” it’s just lumping together a lot of little economies with many going different directions at the same time. I remember when CA was seeing housing prices jump 10 to 15 percent per year, where I’m at averaged 1% per year. Not only that but it had been averaging that 1% per year for 15%. So it just all depends on where your at.


The plain fact is incomes are not up to where they were in 1999. That is not a positive record for either the Bush or Obama administrations.

Back when I was undergraduate school, one of my economics professors debunked the left wing concept that the Bolshevists “grew” the Russian economy after the revolution. The plain fact was the Soviet economy was no bigger than what it had been under the Tsar. All it had done was to recover to its previous levels. There was no real growth.

That’s where we are now. Parts of the economy have recovered, but a lot of people are hurting and have not participated in it. Much of the recovery has been fueled by “crony capitalism” when certain firms have gotten help from the government to get where they are.

Very few of the small businesses have been able to participate in that recovery because of high government taxes and regulation. Since two-thirds of the jobs are supplied by small businesses, most people have not seen an improvement.


**Since two-thirds of the jobs are supplied by small businesses, most people have not seen an improvement. **
Sendgop I do wonder about that two-thirds number. I’ve heard that number quoted before but I don’t know how long it’s been around. With all of our manufacturing jobs moving overseas & the very bad business climate we have closing stores I wonder if it’s even higher than that now?


Bottom 3 quintiles have been in recession since 1999. Top quintile has exploded…Can we agree that “trickle down” is a failure?


In a word, no. Government meddling has created an environment hostile to it.


Households have been shrinking for decades, and the measurement includes no discernment of composition. Get a useful metric please.

In the words of Thomas Sowell “The moment you say ‘household’, I know we’re not being serious”.

Indeed, when you instead include benefits alongside income, and parse people as flesh & blood individuals, we see that compensation has in fact grown.


First off I believe that “trickle down” does work. I have more money now so a lot of jobs that in the past I used to do, I pay others to do now. If I didn’t have the money I’d still be doing them. The problems (there are at least 2) are that nobody really tracks it like that. What they expect is that rich people will start companies & hire a bunch of people. That doesn’t happen like it used to because the U.S. is anti business. Oh sure you can start meaningless business that make a little profit IF you love paperwork, but try starting something that uses chemicals in any way. As an investor why would I risk a large amount of my money & a huge amount of time on the hopes of making a profit in a year or 3 or 5? What’s really in it for me but a lot of dealing with paperwork, the government, & risk? If I’ve got enough money to start even a medium size business there’s a lot better return on my investment other places. Oh & with our tax situation small companies can’t grow like they used to.
I got to know a trucker once a while back. He was (so he thought) making money hand over fist. His accountant (yes he had to have one) had to break the news that he was barely breaking even after he paid his taxes, expenses & a place to live & he was making over $90,000 per year. There are a lot of “dreamers” out there just like him that think that because they are making a lot of money they are doing well.
Now on the economy I would point out that when you get old enough you have lived through a lot of business cycles & ups & downs are a normal part of the economy of a country. No one person (even Obama) nor one company is responsible for it. The economy goes down, then it comes up. Except it hasn’t really come up this time & that’s because of our anti business climate. You have got to have businesses to employ people & if you throw regulations in their face & over tax them they aren’t going to happen. And yes I blame democrats for a large part of it because it suits their purpose. Out of work people vote for welfare, that’s a fact. They don’t see that by voting democrat they are voting away their future.
Off my soap box for a little while, well with one more statement:
I have always wondered about those that hate the 1%. They seem to put a lot of effort into hate when they would benefit by putting that same amount of effort into trying to be like them. I mean why sit around & point a finger saying “they are why I’m doing so badly” rather than trying to copy them.


For who? And if this economy is “eye popping” I wonder what would they have called the economy under Reagan???


I’m concerned about some things on the approaching horizon with some OEM’s moving passenger car production to Mexico. It isn’t just going to affect OEM plants too, it’s going to affect suppliers as well. I would hope Trump if elected addresses the real core issues rather than just pursuing protectionist measures.


Let us first understand WHY they go offshore: To reduce costs and in most cases the costs they are trying to avoid is Taxes and regulations of a crushing govt.

I was on a consulting project as the Consulting Chief Technical Officer. The company was wanting to move their IT overseas (which I am generally opposed to). In this caseI analyzed the cost to move, process and return a solution from China or India. With luch I have traveled globally all my life and I have a good understanding of doing business globally.

The cost to move most processes outside the US and then return them is VERY high, in fact its a challenge to save money unless the company can capture economy of scale. This means for example building cars or any process that is people and regulatory intensive. When I made my presentation to the company I was consulting for they were stunned at how few dollars they could really save. In the case of the turmoil caused and the impact on layoffs and payouts it would have been years to achieve recapture of your investment.

What our Govt should do is unchain our capitalist engine and remove the blanket of regulations and tyranny. Do that and keep the union OUT and we can become an island of capitalism that supports the world like we did post WWII until the unions started closing business and forcing them offshore.


direction, the real incomes of most American households still are smaller than in the late 1990s.
Yes they probably are but there’s a lot of reasons for it. First off plain & simple the jobs we are doing for the most part don’t warrant high pay. Those higher paying jobs that moved overseas for the most part were insanely high paying jobs because of unions. If you don’t count the timeframe when unions were first started (& desperately needed) & just look at unions in the last 50 years they have done more to harm American workers than even the government. And it’s not just the high wages for a low skill set job, it’s being unreasonable.
I like the example of train cabooses. In the old days there was a need for 3 to 4 people to work in each caboose. Well with computers & improvements they now only need 1 person for that job. The railroad companies wanted to eliminate all but one person but had to deal with unions. The compromise reached was that they could get rid of 1 person but had to keep 2 people, one of which didn’t have a job. How does that even make sense?
Long ago American used to save money. (They actually didn’t have a goal of breaking even every payday). That money was loaned out in the local area to stimulate businesses etc. How many people under 50 years old do you know that save on a regular basis or invest on a regular basis? I know exactly 2 people that don’t live payday to payday. They don’t have fancy cars or high def tvs but they do have security. Well, really what I said only applies to one of them, the other makes so much money that he has all the bells & whistles plus saves & invests. He also works 24/7 & pays more in taxes than I make in a year but still I think the argument is valid.
I would add that we went through the same sort of thing in the 70’s & I’ve heard all of this before. The big difference between the 2 is in the 70’s more thought was put to those retiring soon & how the economy was going to screw them.


I agree. There’s a REASON why a car that you could buy for $3000 just a few years ago now costs $35,000, and it AIN’T because the car companies have gotten too greedy.


By a few years ago, you mean like, 1965…LOL?


In the 1980’s, most cars were under $10,000.


The average cost of a car today is $33k, the average cost of a car in 1980 was $7200. You need to go back to 1965-1970 to find an average new car for $3k…Just say’in


This post kind of touched on one of my pet peeves. I guess in a nut shell I could sum it up by saying people these days have expectations that are too high. And those expectations are spread throughout out their lives. They expect that they will start out earning a lot more than they do. They expect to start out in the same lifestyle that they had before they moved out of their parents houses. They expect that they will have a good future even though they do nothing to insure it. They expect that they have the right to enjoy where they work & the hours they work & the people they work with. (If that were true it would be called “joy” not work). It’s like they feel they have the ability to demand those expectations from others or somehow the world is at fault.
Back in the old days if I spent too much money on food & didn’t have enough money to pay my electric bill it’s wasn’t the fault of Uncle Sam for not paying me enough. It was my responsibility to make sure that I used what money I got to take care of the things that I was required to take care of. Looking around I see so many examples of expectations & so few examples of responsibility. Maybe it’s because I’m old & looking at things through an old persons eyes. Or maybe we just don’t teach that stuff any more & haven’t for at least a generation.