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The Dud American Century

Isn't this great? Nothing matching airplanes or air-conditioning. But Facebook, Twitter, WhatsApp...
REMEMBER 1999? asks Bill Bonner in his Diary of a Rogue Economist.
What a great time to be alive!
Mankind stood on the foothills of Olympus ready to join the assembly of gods – rollicking, frolicking and generally misbehaving without regret.
The World Wide Web was gaining velocity. It was widely believed that breakthroughs in communications had "removed the speed limits" to economic growth. Information was now readily and easily available to everyone.
Any dope in Peoria could go on the web and find out how to manufacture a bomb in his basement or make a cherry pie in his kitchen.
And the genius in Kuala Lumpur or Kabul was now liberated from the lowbred, backward and benighted people around him; he could see what fun it would be to have a Beverly Hills ZIP code.
And he could reach across the World Wide Web and get a chisel and a steel file to create a killer website...and free himself from his miserable circumstances.
So many so many places...all yearning for home-delivered pizza and fortunes from day trading stocks – this was supposed to lead to rates of progress never before seen by human eyes.
The evidence could be witnessed in the stock market. Shares of start-ups promising breakthroughs in all areas – from transportation to medicine to home entertainment – were selling at earnings multiples utterly disconnected from the norms that had ruled investing hitherto fore.
What price was too high for a technology that revealed the secrets of the cosmos and unleashed its hidden power?
Progress in statecraft and politics, too, seemed unstoppable. China took the capitalist road in 1979. Russia followed a decade later. Turkey, India, Brazil – all the big "Third World" countries – became "emerging markets"...aping the US capitalist-democratic model.
This model – of democracy and state-aided capitalism – looked like a winner. In 1989, American political scientist Francis Fukuyama wrote his famous "The End of History" essay, arguing that political and economic perfection may have been achieved:
"What we may be witnessing is not just the end of the Cold War, or the passing of a particular period of post-war history, but the end of history as such: that is, the end point of mankind's ideological evolution and the universalization of Western liberal democracy as the final form of human government."
And in 2005, New York Times columnist Thomas Friedman published The World Is Flat. It hallucinated that all the world's economies competed on the same level ground...according to the same rules and same principles (shown to them by the US, of course).
Amid this giddy euphoria came the crash of the Nasdaq...and bursting of the dot-com bubble.
"Well, maybe we got carried away by those dot-coms," was the general response. "But now we have real heroes in the public sector who can save us."
In February 1999, the "Committee to Save the World" – Alan Greenspan, Robert Rubin and Larry Summers – appeared on the cover of Time. The trio was purportedly saving the world from the Asian financial crisis.
Six years later, President Bush awarded Alan Greenspan America's highest civilian award, the Presidential Medal of Freedom, for his work in goosing up the economy following the recession of 2001.
And in 2009, Time named Greenspan's successor, Ben Shalom Bernanke, its "Person of the Year" for taking "extreme measures" to "stop the panic" of 2008.
In the 20th century, a relative handful of inventors, tinkers and scientists – working in relative isolation, often with little funding – had given the world the automobile, radio, atomic power, painless dentistry, the Pill, moving pictures, antibiotics, airplanes, air-conditioning and the Internet.
Now, in the 21st century, millions of scientists, entrepreneurs and engineers – all connected by the Internet – are on the job. They should be able to set the world on fire. Instead, at least so far, it has been a cold shower.
Today, we will focus on the proof: This century, for America at least, has been a flop.
 We are 15 years into the 21st century. Can you think of a single innovation that is equal to the automobile or the airplane? Or air-conditioning?
We can't. All we can think of is Facebook, Twitter, WhatsApp, Snapchat and other frivolities that are more trouble than they are worth.
But the most damning evidence of a failed century comes from the realm we study every day: the economy.
And here, we are much obliged to President Reagan's former budget adviser and author of The Great Deformation David Stockman for rehearsing the many failures of 21st-century economic policy. (You can follow David at his website: David Stockman's Contra Corner.)
What, he asks, have "$700 billion in TARP, $800 billion worth of fiscal stimulus, upward of $4 trillion of QE money printing and 165 months out of 1,890 months in which interest rates were cut or were held at rock bottom levels" wrought?
"The number of breadwinner jobs is still 2 million below where it was when Bill Clinton" was in the White House, says David. Jobs in manufacturing, construction and mining/energy are down 21% so far this century.
You'd think that all these scientists and engineers would mean a big increase in productivity and wages.
Since 2007, nonfinancial business productivity growth has fallen to just half the rate experienced between 1953 and 2000.
This is a big part of the reason that real median US household income has fallen from $57,000 in 2000 to $53,000 today. If incomes continue to fall at that rate, the typical American family will have only $25,000 of income by the end of the century.
In the 20th century, more and more people joined the workforce and earned money. According to Stockman's site, 56% of Americans aged 16-54 had work in 2000. Since then, Americans have been falling out of the labor force. Today, just 45% of the working-age population is employed. Part-time work is increasing, however.
The part-time economy is where people work an average of 26 hours a week and earn an average of less than $10 an hour (not even $15,000 a year). The only sectors that have seen net new job creation are in the "HES complex" (health, education and social services) – the parts of the non-military economy most heavily controlled and financed by government.
In all other sectors, more jobs have been lost than gained.
GDP growth, jobs, productivity and incomes – all the things that matter to regular people – have slowed, or fallen, in the 21st century.
So far, the century is a dud. A disappointment. And a barely contained disaster.

Bill Bonner has co-authored a number of New York Times Bestsellers including Financial Reckoning Day, Empire of Debt and Mobs, Markets and Messiahs. In his own opinion, Bill's most recent title, A Modest Theory of Civilization: Win-Win or Lose, is his best work yet. Bill also founded The Agora, a worldwide community for private researchers and publishers, in 1979. Financial analysts within the group have exposed and predicted some of the world's biggest shifts since that time, starting with the fall of the Soviet Union back in the late 1980s, to the collapse of the Dot Com (2000) and then mortgage finance (2008) bubbles, and more recently the election of President Trump.

See full archive of Bill Bonner articles

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