Thursday, September 19, 2013

Why do Doomers hate Supertrains?

- by New Deal democrat

There's been something of a Doomgasm since the Census Bureau's annual median household income data came out a few days ago.

As I predicted two months ago, it basically went sideways from 2011 to 2012. This also means that it is below 2009, below 2007, and below 1999, which remains the peak. The reason it went sideways is because real median wages have stalled, and there the ongoing decline in the employment to population ratio even since the late 1990s also stalled. And one more reason I'll discuss below. Since people who are unemployed or retired bring in much less, or no, income, the median household income is dragged down as well.

I don't mean to suggest that median household income isn't a valid measure. With 70% of the economy being consumer spending, if households have less money, then consumer spending will suffer accordingly, especially since lower income households spend a higher percentage of their income. It's simply important to realize that this doesn't necessarily reflect a decline in real wages.

Nevermind. The Doomer mind is obsessed with the fact that we can't be in an economic recovery because household income insn't recovering, at least through the end of last year. Of course, by the same standard, with the exception of one year, we never really recovered from the 1973-74 recession until 1986, and we haven't recovered from the bursting of the tech bubble in 2000 at all.

That's just semantics. The real problem with this obsession is that it overlooks *why* median household income continued to fall even after the unemployment rate, and the employment to population ratio both bottomed in 2009. As I've pointed out numerous times over the last couple of years, that has everything to do with the continued high price of gasoline, which went over $3 a gallon apparently permanently in 2010, after a secular rise from $0.92 a gallon in early 1999.

We have an incredibly wasteful transportation system, which forces people to use cars even where a well designed mass transit system would work efficiently, save time and aggravation, and save travelers lots of money. Up until the last few months, we had once-in-lifetime low treasury bond rates. We could have made use of those rates to build, or rebuild, lots of infrastructure, including a transportation infrastructure that helped consumers in the face of likely permanently high gas prices. Or, as Atros puts it simply, SUPERTRAINS!

The Doomer obsession with "green shoots!", "printing fiat money!", airquote "recovery!", and the like means they fail to see - in fact, don't want to see - how important the price of gas has been in holding back ordinary consumers, and how important it is for this country to break free of the Oil choke collar.

So Doomers hate Supertrains. I know math is hard, but maybe if they really learned how to do it, they could see how much it would help the people they claim to champion if they focused on the reasons why some measures of average Americans' well-being haven't improved.