Albert Esplugas blogs the following magnificent quote from Niall Ferguson’s Empire: The Rise and Demise of the British World Order and the Lessons for Global Power:
Schoolchildren and tourists are still taught the story of the American Revolution primarily in terms of economic burdens. In London, the argument runs, the government wanted some recompense for the cost of expelling the French from North America in the Seven Years War, and of maintaining a 10.000 strong army to police the disgruntled Indians beyond the Appalachian mountains, who had tended to side with the French. The upshot was new taxes. On close inspection, however, the real story is one of taxes repealed, not taxes imposed.
(…) In January 1770 a new government in Britain, under the famously unprepossessing Lord North, lifted all the new duties except the one on tea. Still the protests in Boston continued.
I was looking at the new earnings data released by the BLS this morning, which shows real average income for all workers declining 0.6 percent year over year. Realistically speaking, this means that earnings are flat for people with jobs. People without jobs, who aren’t included in the survey, are likely much worse off in general.
We might also keep in mind that when making year over year comparisons, that March 2009 was just a few months after the panic of 2008, so to have had so little improvement compared to the early months of 2009 is a grim commentary indeed.
Also, when thinking about household debt, unemployment, and continued increases in the price of gasoline (which rose 15 percent over the last 6 months), household budgets in America are in extremely dire straits.
If this were only a short term phenomenon, it would be one matter, but when looking at what has happened over the past decade, the continued malaise is really just more of the same in spite of the fact that it was masked by a brief bubble in the middle of the decade.
For example, American median household income in 1998 (adjusted for inflation) was $51,295. Ten years later, in 2008, it was $50,303. Over the same period, household debt increased 139 percent.
Now come the years of de-leveraging with stagnant incomes, which will be painful.