“This man will not fail!”

August 29, 2012

The highlight of the Republican national convention last night was Ann Romney’s emphatic proclamation that “this man will not fail!”  It was preceded by a littany of candidate Mitt Romney’s many successes in life, both in the private and public sectors – his business success and his success in cutting spending and balancing the budget as governor of Massachusetts.  And her proclamation was also a swipe at President Obama’s obvious failures to restore the economy, bring down unemployment and rein in the exploding debt. 

But past successes are no guarantee of success as president of the United States.  First of all, regarding Romney’s success in balancing Massachusetts’ budget:  of course he was successful.  Nearly every governor is successful at balancing the budget of his or her state because nearly every state’s constitution requires that the budget be balanced.  The governor and his legislature were duty-bound to agree on some combination of spending cuts and revenue increases in order to achieve a balance.  They can’t go home until they do.  And, let’s not forget, governors’ jobs are much easier than the president’s job in that regard because the states have a big sugar-daddy – the federal government – to pick up the slack. 

As president, Romney will have no such luxuries.  Our constitution doesn’t require a balanced budget because our founding fathers never imagined that our leaders would be so stupid as to create such a fiscal mess.  So there is no driving force for Congress to compromise and reach a consensus.  Under President Romney, Republicans will be just as adamant about not raising taxes and Democrats, smarting from four years of Republicans’ stone-walling efforts to reach a compromise each time we bumped our heads against the debt ceiling, will now be even less willing to cut spending.  It’s highly unlikely that Romney will be any more effective in breaking the gridlock in Washington. 

And success in the business world is no predictor whatsoever of success running the federal government.  The objectives of each are polar opposites.  There is only one goal in the business world.  It’s not creating jobs.  It’s not helping the overall economy.  It’s not improving the lives of people.  It’s not the high-minded, almost-philanthropic slogans that each corporation proclaims in their image-building ads on TV.  It’s none of these.  The only goal of business is making money – as much as possible – in any way legally possible.  The interests of employees are of no concern at all  (at least to the extent that the business is able to retain a minimum of highly productive employees), much less the interest of the common good.  For business leaders, the business is the master that all others in the organization serve.

That’s not a criticism.  It’s the way things must be in a society that utilizes capitalism as its economic model.  If such an economy is to succeed, profit must be the first priority of its business leaders.

But the role of government is the polar opposite.  The common good is the chief objective.  While it’s in the interest of the government of a capitalistic society to maintain a business-friendly atmosphere, the role of government is to assure that capitalism functions as our servant, and not our master.  It’s role is to establish boundaries that prevent businesses from heading down a path that’s not in the interest of the common good.  That requires some empathy for others. 

My wife and I had an interesting discussion the other day with our son who is working on his Phd in psychology.  For some reason, we got into a discussion about sociopaths vs. psychopaths, and what the distinction might be.  We were aware that a sociopath is a person who is virtually devoid of empathy, incapable of having sympathy for others.  Our son pointed out that there really is no difference; they’re terms that are used almost interchangeably, but the term “psychopath” is generally applied to those whose lack of empathy has resulted in some violent crime.  Sociopaths are not necessarily violent.  There are plenty of sociopaths who function normally in society.  These are kown as “functioning sociopaths,” my son explained.  While sociopaths are lacking in empathy, they also are fully capapble of recognizing others’ emotions and feelings and are able to manipulate them to their advantage. 

I remarked that a sociopath may be well-suited to being a CEO of a corporation, since the job so often requires decisions that may negatively impact a lot of people.  He replied that, in fact, in psychology texts, corporate CEOs are often cited as examples of “functioning sociopaths” – making them ideally suited to making decisions that hurt many people without giving it a second thought.  They go home and sleep soundly. 

While sociopathic qualities may serve a business leader well, it’s a quality that makes one poorly suited to serving the common good.  I’m not saying that Romney is such a person, but stories I’ve heard make me wonder if he lacks empathy.  Even last night, following an emotional speech by his wife and the thunderous applause of admiring thousands, his reaction seemed to be little more than a rehearsed smile. 

His wife, Ann, is wrong.  If elected, Romney will fail, but not for any of the reasons I discussed above.  He will fail because, challenged with reviving the economy and reining in the debt, he faces only three choices:

  1. Cut the federal budget deficit in a meaningful way, most likely through deep spending cuts (but don’t be surprised if some tax increases are included) in the belief that reining in spending will somehow boost the economy.  This will placate those whose biggest concern is our exploding national debt.
  2. Make only token cuts, but otherwise continue to run budget deficits of close to a trillion dollars per year in order to avoid a recession.
  3. Address our failed trade policy to bring millions of manufacturing jobs back home.

Those are the only three choices he has.  The only one that would have any meaningful impact on restoring the economy – the last – is one he will clearly not choose.  He has already promised a huge new, all-encompassing free trade deal.  Our trade deficit will likely get worse.  There’s no hope that it would improve.

That leaves the first two options.  The first would surely drive the economy into recession.  He knows that.  His economic advisors know that.  They know that anything that takes money out of the economy – like taxes – hurts the economy.  And they know that anything that puts money back in the economy – like federal spending – helps the economy.  So he won’t do it.  They may shift spending from social programs to defense spending, but there won’t be any real reduction in the deficit.  You can take that to the bank. 

Which means that he will default to continuing the status quo – running huge budget deficits to stoke the economy with money that is drained away by the trade deficit – kicking the can down the road.  In all likelihood, it will be in the guise of a budget that predicts less spending and more revenue in the future, when the economy is mysteriously healed and the macroeconomy is inexplicably growing again at 4-5% per year.  Probably the time frame will be about 8-10 years out so that he never has to explain why we never really arrived there. 

Romney will fail because his economists will continue to rely upon growth, including population growth, to cure economic problems that have been caused by growth itself and by attempting to grow through free trade with nations where growth-induced economic problems are even worse.  How can he possibly succeed when the field of economics that he will reply upon for economic advice is itself a complete and utter failure?


Immigration on the Decline?

August 24, 2012

Earlier this month, upon the release of GDP data for the 2nd quarter of this year, I observed that in spite of the decline in GDP, per capita GDP actually rose, thanks to a slowing rate of population growth.  We know that the fertility rate has fallen to its lowest level in 25 years.  But I was curious to see whether immigration may be slowing as well.

Unfortunately, immigration data (at least the data available to the public) is only current through 2011.  Nevertheless, I thought it a good time for an immigration update, the first I’ve done since publishing Five Short Blasts in 2007.  So here’s a chart of the number of persons granted permanent legal resident status, by year, dating back to 1820:

LPR by year

As you can see, today’s annual rate of immigration rivals that of immigration’s heyday in the early 1900s.  Since the end of World War II, immigration has risen rapidly from 38,000 in 1945 to over one million in 2011.  In 1991, it hit a record of over 1.8 million, thanks to the amnesty program that granted millions of illegal immigrants “legal permanent resident” status.  Following that peak, immigration declined dramatically through the 1990s, only to spike again beginning in 2000.  Immigration has remained fairly flat during the Obama administration, slightly below the most recent peak reached in 2006. 

This data paints a picture that is in stark contrast to ideas we may hold about which party is tougher on immigration.  Republicans are typically perceived to be tough on immigration while Democrats are viewed as being soft and sympathetic to potential immigrants.  What we see here is that immigration soared to its very worst levels under president George H.W. Bush in the early ’90s.  It then moderated dramatically during the Clinton administration.  It shot up again under George W. Bush, and has once again moderated slightly under Obama.  Not what you’d expect.  It’s not what I expected.

But the United States’ population has grown dramatically since 1920.  Perhaps it’d be a more meaningful analysis to express the rate of immigration as a percentage of the population.  Here’s a chart:  LPR by year as % of population.

Now the data looks dramatically different.  The history of U.S. immigration can now be clearly divided into three distinct phases:  pre-depression, depression/WWII and post-WWII.  During the first phase, immigration ramped up rapidly from 1820 to 1854, rising from less than 0.1% of the population per year to over 1.6% of the population.  From that point, it swung regularly and wildly in cycles that lasted 20-25 years.

During the second phase, with the onset of the Great Depression, the rate of immigration was cut by 90%, falling from 335,000 in 1927 to only 23,000 in 1933.  Clearly, with unemployment soaring to over 30%, President Roosevelt had the good sense to stop importing more labor, unlike President Obama.  It remained at this extremely low level through 1945. 

There’s a couple of very important points that need to be made here.  Today, we’re often told by business and political leaders that we must import workers because of a shortage of this skill or that skill.  And we’re told that an unemployment rate of 4-5% represents “full employment” – that it’s not possible to drive unemployment lower.  Yet, as the U.S. cranked up the war effort, the military actually pulled men out of the labor force at the same time that factory output had to be dramatically increased.  It did this without importing any additional labor.  Young girls and housewives – “Rosie the Riveter” – stepped in to fill the void.  None of them had any experience welding, riveting and working as mechanics and machinists.  They were trained, and quickly.  And unemployment fell from its depression level of greater than 30% to less than 1%.  It just goes to show that the rationalizations we hear today for our high rate of immigration are a bunch of B.S.  There is no shortage of labor in the U.S.  What we lack are business leaders with a little initiative needed to train workers and political leaders acting in the best interest of the American people.

The third phase began immediately after WWII – a very steady ramping up of immigration.  This is just speculation on my part, but this phase began at the same time that the Global Agreement on Tariffs and Trade was signed.  Perhaps it’s another indication that a new breed of economists had taken over,  hell-bent in their commitment to driving macroeconomic growth through free trade and by stoking it with population growth. 

Not counting the three year period of amnesty for illegal aliens from 1989 to 1991, immigration as a percentage of the population reached its peak in 2006 at 0.42% of the populaton.  It has fallen since then, to only 0.34% of the population in 2010 and 2011. 

But perhaps the most meaningful measure of immigration is how much it contributes to overall population growth.  Check out this chart:  LPR by year as % of population growth

As you can see, during that first phase of immigration from 1820 until the Great Depression, there were actually a number of years when immigration contributed well over 100% of America’s population growth.  It happened 19 times.  In other words, the U.S. population would actually have declined in those years were it not for immigration.  It happened for the last time in 1914.  This period truly was the heyday of U.S. immigration. 

In 1931, immigration’s contribution to population growth fell below 10% and didn’t rise above 10% again until 1947.  In 1933 it fell below 2%. 

Since the start of “phase 3,” immigration’s contribution to U.S. population growth rose again steadily to 25% in 1988, then spiked to 72% in 1991 during the amnesty period.  After that, it fell steadily to 24% in 1999, rose again to 42% by 2006, and has then fallen again to 34% in 2010 and 2011.  Thus, it appears that immigration’s contribution to population growth has plateaued and that a decline may now be underway. 

Many people – perhaps most – believe that high rates of immigration are our legacy – that we somehow owe it to the world to keep open the golden door.  From this data we can see that there is precedent for making dramatic cuts to immigration – on the order that I proposed in Five Short Blasts – when it’s in the best interests of the U.S. economy and the American people.  All it takes is the kind of common sense and backbone displayed by FDR – something sorely lacking in more recent presidents.

A Clear Choice in November

August 18, 2012

You’ve probably noticed that, as the presidential campaign has picked up steam and as more has become known about Romney and, much more recently, his running mate, Paul Ryan, I’ve had very little to say.  It’s not that I haven’t given it a lot of thought but, the more I think about it, the more bored and disenchanted I’ve become.

Upon Romney’s selection of Paul Ryan as his running mate, political analysts were quick to proclaim that the election now offers a clear choice.  Now that I’ve had time to think about it, I agree.  We do have a clear choice.  We can go to the polls in November to vote for Romney or Obama, or we can choose to stay home and at least avoid wasting an hour of our lives that we’ll never get back.  Look at it this way:  even if you’re among the youngest of voters – 18 years old – your life expectancy says that you have about 525,000 hours left to live.  If it’s a close election with less than 1% of the votes separating the winner and the loser, then it would take a swing in votes of approximately 750,000 to change the election results.  In other words, the percentage of your life that you’re wasting is greater than the odds that your vote will make a difference. 

And, make no mistake, casting your vote for either Obama or Romney is a waste of time.  All domestic economic issues are, ultimately, either rooted in or heavily impacted by only two key issues – trade policy and immigration.  On these two issues, there isn’t a lick of difference between Obama and Romney.  On the subject of trade, both are adamant supporters of free trade so, with either, we’re assured of another four years of goods trade deficits in the range of$800 billion per year.  And, since deficit spending is the only way to make up for that drain on the economy, that assures that budget deficits will continue to run close to $1 trillion per year, regardless of what promises either candidate makes to reduce the deficit.  The only difference will be how the deficit is spent.  With Obama, the poor will get a little more relief.  With Romney, the wealthy will be a little better off and the poor will struggle a bit more.  For everyone between those extremes, there will be no difference whatsoever. 

There’s even less difference between Obama and Romney on the subject of immigration.  Obama and the Democrats openly support high rates of immigration, including turning a blind eye to illegal immigration.  Romney and the Republicans make a lot of bluster about illegal immigration but, once in office, all we’ll get is some token enforcement while they quietly go about the business of boosting H-1B visas and ramping up legal immigration to placate wealthy donors who want to keep downward pressure on wages and benefits.  The end result will be the same:  throwing more fuel on the fires of unemployment, higher energy prices as more consumers put more pressure on limited supplies, and more greenhouse gas emitters at a time when we’re supposed to be drastically cutting our emissions.  I could go on. 

Republican philosophy favors and rewards hard work, entrepreneurship and risk-taking.  I like that philosophy.  But I don’t like depriving people through bone-headed trade policy of their opportunity for hard work and then throwing them under the bus, denying them assistance they’re now forced to rely upon. 

Democratic philosophy favors helping such people, but at the risk of creating a moral hazard for the rest of us by disincentivizing hard work.  Why should I work hard when all these other people appear to be sitting back and living off of government largesse?  I’d like the Democratic philosophy more if, at the same time that they’re helping those displaced from jobs by our trade policy, they’d actually get off their bleeding-heart asses and do something to fix it. 

Neither party is interested in doing a damn thing to get this country back on track.  That would entail some very hard work and some unpleasant encounters around the punch bowl at G20 meetings.  Instead, they’re content to polarize, pander to their bases, and try to sucker independents with promises that they never intend to keep. 

OK, I’m being overly cynical about voting.  It’s not a complete waste of time.  There will be local issues on the ballot where a few votes either way can have a meaningful impact on your life.  But don’t fool youself about your vote for president.  Your one vote out of 150 million votes, cast for either of two candidates from the same Republicrat party, is about as meaningless as it gets.  The odds of your vote making any difference in your life is about the same as your odds of winning the lottery which would, in fact, make a huge difference in your life.  So, if you’re a person who’s all fired up about this presidential election, you might stop and reconsider.  Maybe your time would be better spent with a trip to your local 7/11 to buy a lottery ticket instead of wasting it on a trip to the polls.

Again, I’m being overly cynical.  I do plan to vote in November.  But for whom?  Not Obama.  Obama’s done some good things as president.  He bailed out the auto industry and he got Osama bin Laden.  But he’s failed miserably on trade policy, breaking his promises to rewrite NAFTA and to get tough with China.  He and his surrogates have been door mats in trade negotiations.  His immigration policies have been even worse, accelerating legal immigration and encouraging more illegal immigration.

And not Romney.  He has plans for much bigger free trade deals.  And while his promises to get tough on illegal immigration are appealing, I strongly suspect that any such moves will be token in nature and will tend to make the problem go away by making it easier for immigrants to enter legally.  Romney is proud of his business record and will judge his success in rehabilitating the economy by how well business is doing.  If corporate profits rise, it doesn’t matter if it’s done through more outsourcing and more cuts to wages and benefits.  If tax cuts go straight to their bottom lines or are used to finance more overseas investment, no matter.  And the whole supply-side, trickle down economics he embraces?  Been there and done that, and look where we are.  “Trickle down” worked when the trickle actually went down, as it did under Reagan, before most of our manufacturing jobs left.  Now, the money spent by the wealthy on luxuries trickles out to foreign manufacturers and does little to help anyone here, other than themselves.  And stories about Romney – his leading a gang in high school who attacked another student and cut off his hair (and then denying remembering the incident), and loading the family dog into a crate for a ride on the roof of the car – leaves me wondering whether he suffers from a serious lack of empathy, something that should be of concern for anyone lower on the economic ladder than Romey. 

That leaves me no choice but to use my vote as a protest – using it in a futile effort to vote for someone else.   And who better than myself?  Look at my platform.  Can you find another candidate with one better?  So I plan to write in my own name.  My wife has said that she’ll do the same.  Consider it yourself.  Will it make a difference?  Not likely.  But who knows?  It’s kind of like the lyrics from “Alice’s Restaurant”, a 60’s song by Arlo Guthrie about one boy’s experience at the draft board:

… there’s only one thing you can do and that’s walk into the shrink, wherever you are, just walk in say “Shrink, you can get anything you want at Alice’s restaurant.”

And walk out. 

You know, if one person – just one person – does it, they may think he’s really sick and they won’t take him. 

And if two people – two people – do it, in harmony, they may think they’re both faggots and they won’t take either of them.

And three people do it, three – can you imagine?   Three people walking in singin’ a bar of Alice’s Restaurant and walking out?  They may think it’s an organization. 

And can you, can you imagine fifty people a day?  I said fifty people a day walking in singin’ a bar of Alice’s Restaurant and walking out?  Friends, they may thinks it’s a movement.

(The term “faggot” was used by Guthrie to mock the prevailing attitude toward gays that you’d have found at the draft board in those days.)

Well, friends, maybe it’s time to start a movement.  You have a clear choice in November – join the movement or waste your vote on a Republicrat.  If it’s just my ballot and my wife’s that has my name penciled in, it won’t make a bit of difference.  Fifty ballots won’t either.  But 500?  Or 5,000?  That might catch somebody’s attention and raise some eyebrows.  Maybe it’ll start a movement.

Trade Deficit with S. Korea Worsens After Enactment of Trade Deal

August 9, 2012

In October of last year, Congress passed a new trade deal with South Korea that went into effect in March of this year.  This was an agreement originally negotiated by the Bush administration in 2007.  It was renegotiated by the Obama administration to delay for five years reductions in tariffs on South Korean cars and to give the U.S. broader access to the South Korean auto market.  The president hailed it as a big coup for American workers.  Because South Korea is more than 15 times as densely populated as the U.S., I predicted it would have the opposite effect and that our trade deficit with South Korea would worsen.

With this morning’s release of trade data for the month of June, we now have four months of this new trade deal under our belts, so it’s time to begin evaluating the effectiveness of this deal.  So far, as I predicted, the results aren’t good.  In the four months that this trade deal has been in effect, we’ve racked up a trade deficit with South Korea of $5.45 billion, an 18% increase over our trade deficit during the same four months last year.  That’s an annualized trade deficit of $16.35 billion.  Only once, in 2004, was our trade deficit with South Korea worse. 

Reuters columnist David Cay Johnston went to South Korea to see for himself whether or not the trade deal is working.  Check out his report and be sure to watch the embedded video.  Mr. Johnston is trying to spot American-made cars.  However, I’d like you to pay attention to something else – the volume of traffic.  Here’s the report: 


Mr. Johnston reports that he is standing on the busiest street in downtown Seoul.  Seoul is the largest city – the capital city – in a nation that’s fifteen times as densely populated as the U.S.  Yet, traffic is flowing very smoothly because there’s very little of it.  In fact, in the scene in which Mr. Johnston is standing on the corner, watching for an American-made car, only one car passes by every few seconds.  Now imagine the same scene on the busiest street of any major American city.  The streets would be absolutely clogged with traffic.  Mr. Johnston would need a team of people to count the cars. 

The problem is not so much that such a small fraction of cars in South Korea are American-made, but that there are so few cars – relative to the size of their population – regardless of where they’re made.  The South Koreans have free access to our vibrant auto market and all we get in return is, supposedly, free access to a market that practically doesn’t exist.  On a per capita basis, South Koreans own far fewer vehicles because there’s no room for them.  It’s absolutely impossible to have anything other than a large trade deficit with a nation with such low per capita consumption.  We come to the trading table with vast, healthy markets and they come to the trading table with nothing to offer but a bloated labor force hungry for work. 

In 2011, we imported 430,000 vehicles from South Korea, and exported only 22,000 to them.  Through June of this year, we’ve exported only about 12,950 vehicles to South Korea – no significant improvement.  Someone explain to me how surrendering the production of over 400,000 vehicles per year does anything other than eliminate approximately 100,000 jobs. 

Four months isn’t a lot of data.  I’ll continue to follow and report on this, but so far the results are exactly what I predicted – bad. 


U.S. Manufactured Exports Rebound in June

August 9, 2012


The U.S. Bureau of Economic Analysis (BEA) reported this morning that the U.S. trade deficit fell dramatically to $42.9 billion from $48 billion in May – the third consecutive monthly decline and the lowest trade deficit since December, 2010.  The decline was led by a $2.6 billion surge in manufactured exports, followed by a $2.1 billion decline in oil imports and a $1.2 billion decline in manufactured imports.  Here’s a chart of the overall balance of trade, beginning with January, 2010 when President Obama vowed to double exports in five years:  Balance of Trade.

That’s all good news, but it’s more likely a temporary blip in a worsening trade picture.  The jump in manufactured exports to $111.4 billion follows two previous monthly declines and remains below the high of $111.6 billion set in March.  Here’s the chart:  Manf’d exports vs. goal.  While manufactured exports made up a little ground in June, June still marked the ninth consecutive month of failing to meet the president’s goal of increasing at a rate that would see them double in five years.  And overall exports fell short for the eleventh consecutive month.  Here’s a chart of the overall balance of trade in manufactured goods:  Manf’d Goods Balance of Trade.  As you can see, the improvement in June is an upward blip in an overall downward trend. 

Exports to the European Union continue to hold up pretty well, good news in light of the worsening economy there.  Imports from the EU fell, but only to a normal level following a spike in May. 

The trade deficit with China rose by $1.4 billion to $27.4 billion.  The record is $29.0 billion, set in August, 2011. 

By the way, just to keep things in perspective, the $37 billion trade deficit in manufactured goods in June translates to an annual deficit of $444 billion.  Assuming that two thirds of the cost to manufacture those products is labor – $297.5 billion – and that each manufacturing job pays $50,000 per year, the trade deficit in manufactured goods represents a loss of 5.95 million jobs.

Big Decline in Employment Fuels Jump in Unemployment Rate in July

August 6, 2012

As is often the case, the good news from the establishment survey portion of the jobs report, released by the Bureau of Labor Statistics (BLS) on Friday, grabbed the headlines.  Nonfarm payroll employment rose by 163,000 – significantly more than the low expectations of most economists.  The stock market was ready for some good news.  The uptick in unemployment, to 8.3% from 8.2% a month earlier, was shrugged off.  And no one took any note of the really bad news from the household survey that caused it.  In July, the employment level fell by nearly 200,000 jobs – the biggest decline in over a year.  And were it not for the fact that the government once again claimed that 150,000 workers had mysteriously vanished from the labor force (when, in fact, the labor force actually grows by over 100,000 workers per month), the unemployment rate would have jumped to 8.4%.  Here’s a spreadsheet that contains the figures, as well as the calculations of the unemployment rate, both real (my calculation) and trumped up (the government’s calculations):  Unemployment Calculation.  And here’s a chart of those unemployment rates:  Unemployment Chart.

The number of unemployed Americans rose to 17.315 million, the highest level in four months.  Here’s a chart:  Unemployed Americans.  And per capita employment actually fell for the first time in three months, nearly wiping out the gains of the prior two months.  Here’s the chart:  Per Capita Employment.

All of this is just further verification that the U.S. economy is now firmly stuck in a “new normal” of 8%-or-greater unemployment.  Take away the unsustainable rate of deficit spending of $1 trillion per year (as may very well happen early next year) and things will get much worse.  Businesses are already cutting back in anticipation of this, as reflected in the manufacturing reports during July.  All of this spells bad news for President Obama’s chances for re-election. 


Slowing Population Growth Boosts Per Capita GDP in 2nd Quarter

August 1, 2012


Things have been a little crazy here lately and I’ve fallen behind once again.  So the news about 2nd quarter GDP, released on Friday (link provided above), is already a little stale.  But there’s a twist in that news that merits comment.

The Bureau of Economic Analysis (BEA) announced that growth in the nation’s gross domestic product slowed in the 2nd quarter to a very anemic annual rate of 1.5% from a slightly upwardly-revised figure of 2.0% in the first quarter.  So I expected that I’d be writing about a decline in per capita GDP to only 0.5% – very close to a recessionary level.

But that’s not the case.  When I crunched the numbers, per capita GDP actually held steady at an annual rate of about 1.1%.  Upon checking my numbers, I found that growth in the U.S. population, using data taken from the Census Bureau site, has actually slowed dramatically.  Here’s a chart of the percentage change in the U.S. population:   Quarterly U.S. Population Growth Rate

As you can see, although the growth rate in the 2nd quarter typically rises, it actually fell this time, to its lowest level since I started tracking it, with the exception of the correction that took place in the first quarter of last year as a result of the 2010 census.  But this isn’t just a one-quarter blip.  There seems to be an acceleration in the rate of decline in population growth over the past couple of years. 

The result is that there was actually a very slight up-tick in per capita GDP in the 2nd quarter.  In other words, every American is actually slightly richer as a result of fewer-than-expected people sharing the GDP.  Every American got a slightly larger piece of pie in the 2nd quarter because fewer Americans showed up at the table than expected.  Here’s a chart of per capita GDP:  Real Per Capita GDP

What’s going on here?  In my previous post, we learned that the fertility rate has fallen to a 25-year low, approaching the level needed to reach a stable population.  And, if the CDC (center for disease control) ever updates it’s data for death rates and life expectancy, I expect we’ll see that the death rate is actually rising slightly, primarily due to the effects of obesity, but due to the effects of rising poverty as well.  That leaves only immigration to maintain population growth and, so far, it doesn’t seem to be happening.  Has the administration been quietly ratcheting back on immigration too?  I don’t know, but it’s something I’m going to investigate.  More on this later.

In the meantime, the good news here is that slowing population growth is already yielding benefits for every American.