I finished up David Stockman’s latest bible-sized rant, Trumped! A
Nation on the Brink of Ruin…And How to Bring It Back (2016). While
spending the first 50 pages hitting on the economic realities that enabled an
outsider like Trump to make his run at the Oval Office (the book ends after the
party conventions but before the election), the remaining 400+ pages are a re-visit
of the author’s very strong views on Keynesian central bank policies, beltway
war hawks, and fiscal waste in Washington – all topics that were examined in
his last book.
With that said, there were some data points that I thought useful
for future dinner parties. To wit (one of Stockman’s favorite terms, by
the way):
-Since 2000, there are 5 million more prime working Americans and not one
has a job, and the number of households receiving means-tested benefits has
doubled to 100 million.
-Total credit market borrowings by households was $14.2Tn in 2007 and stands
at $14.3Tn now. Maybe Richard Koo is right.
-Since 2000, real capital consumption has increased by 53% while real net investment is down by 17%.
-Business debt has increased since the eve of financial crisis from $10Tn to
$12.5Tn, but it's gone towards non-productive ends like stock buybacks, LBOs
and financial engineering.
-In speaking to the financialization of the economy, since 1987
the value of debt and equity securities have moved from 2.4x to 5.4x GDP.
-We have $3Tn of imported goods and services and $10Tn of consumption.
That seems like a good place to tax, rather than payroll and corporate
income.
-Since 2010, there have been $360Bn in auto sales, but there has also been a
surge in auto loans of $355Bn.
-The recent pronouncement that the social security trust fund is solvent
until 2034 is premised on the entirely unrealistic assumption that the US
economy will grow by 5.1% per year for the next 12 years. The pace of GDP
growth since 2000 has been 3.8%, and it's been at a reduced 2.8% growth
rate over the last seven years and 3.3% over the last four.
-80% of the highly-traveled bridges in need of repair sit in California,
mostly in the greater Los Angeles area. Sounds like CA taxpayers should
be responsible, not all Americans through some enormous infrastructure program.
-60% on new debt issuance in China in recent years has gone to pay interest.
As a closing thought, I don’t think that I need to read another one of his books. Over 1,200 pages later, I get the point.
