I’m sure the other dude is quite bright, if it’s whom I believe you’re referring to. I’m sure he’ll return one day.
So I have read both this post and the article posted by Lusty. I still disagree with the premise and feel that it cherry picks data points to support the premise. With that said, I disagree that there was any change in the trends as I’ve point out when taken in bunches of 5-10 years rather than 1 year prior and 1 year after.
Also, increasing deficit spending is a great way to make economic markers look good. Just as during the Obama years the Fed artificially pushed up the stock market the same occurred with deficit spending in the Trump years.
If you look at the indicators I provided for 2011 (the housing market crash recovery) through 2019 (Pre-Pandemic) all indicators move in a positive direction, even unemployment. Had the Obama economy continued for another 2 years at the same trend lines he would have overseen the same numbers as Trump, I suspect, even without the unpaid for tax breaks for people like me and the deficit spending that accompanied it.
Originally Posted by NoirMan
Gramm and Solon's point in the WSJ article isn't primarily about the corporate tax cuts and economic or GDP growth. It's about the corporate tax cuts and their effect on jobs and middle class income. For years the rich got richer but middle class incomes stagnated. Maybe this will illustrate the point.
Median real household income, 2020 dollars:
1999 $63,423
2009 $60,200
2017 $64,557
2019 $69,560
I inserted 2009 because that was the lowest point of the recession. Coincidentally it's when Obama took office, but that's irrelevant to the point.
Now look at real GDP per capita, in 2012 dollars:
1999: $45,326
2009: $49,473
2017: $55,692
2019: $58,141
After the GOP corporate tax cut took effect, on 1/1/2018, you finally see the middle class making significant income gains, over and above the per capita GDP growth rate. For 20 years median incomes stagnated, barely rising since 1999. Then they boomed. Is this coincidence? Not entirely in my opinion, for reasons explained by Gramm and Solon. Deregulation played a part too.
So what do we have to look forward to going forward? Well, average hourly and weekly earnings in August, 2021 are up 4.3% year-on-year. But CPI inflation is up 5.3%. The cost of goods and services are going up faster than wages, so again the middle class is slipping behind. I'd attribute this in part to the huge amounts of COVID relief dumped into the economy, including the $1.9 trillion bill passed earlier this year with no GOP support, which is jacking up inflation. Larry Summers, a Democrat and perhaps the best known economist who served in the Clinton and Obama administrations, would probably agree with that.
Sources:
Real GDP per Capita:
https://fred.stlouisfed.org/series/A939RX0Q048SBEA
Real Median Household Income:
https://fred.stlouisfed.org/series/MEHOINUSA672N
Average hourly earnings:
https://www.bls.gov/news.release/pdf/realer.pdf
CPI:
https://www.bls.gov/news.release/pdf/cpi.pdf