Let’s do something exciting today. Let’s talk… GDP!
Ok - for those of you who stuck around after that rousing opening sentence, I’ll start with a primer and go from there.
GDP = Gross Domestic Product. The formal definition of GDP according to the International Monetary Fund (IMF) is “Gross domestic product… represents the total value of final goods and services produced within a country during a specified time period, such as one year.”
GDP matters because it is perhaps the broadest measure of what an economy is producing. Growth in GDP means growth in economic activity. The idea of measuring GDP is that is can be an indicator of change (up or down) in other key economic areas such as jobs, wages, business income/profit, investment and government services (via tax revenue).
Historically, post WWII, the average annual growth in GDP is approximately 3.1%. This chart shows “Real GDP” growth - which takes inflation into account, for the post WWII period:
Growth in GDP (on average and also peak growth for individual years) has been declining over time, with early post-WWII years showing higher growth than more recent years. For example, average annual GDP growth from 1947 - 1979 was 3.71%, while 1947 - 2025 was only 3.08%, a decrease of 17% in the average.
Side Note: of course, Trump the con man, in his attempt to stay one step ahead of the carnage he’s created, has claimed the U.S. could see GDP growth of up to 20% under his watch. Hint: It’s. Not. Going. To. Happen.
In the U.S., solid GDP growth has become shorthand for the media and politicians to claim all is good with our economy.
Don’t listen to them.
Why? Because growth in GDP can - and is - distributed unevenly amongst different economic entities and classes.
Think of a corporation that grows rapidly, increasing sales, profits and cash flow from year to year. The corporation can use that free cash flow in different ways:
It can hire more people to handle its growth and/or it can raise wages and pay bonuses to non-supervisory workers to reduce turnover and reward those workers.
Alternatively, it can invest in the business - in capital and research/development - to give it a better chance of maintaining its success into the future.
It can also reward its shareholders through increased dividends and share buybacks (which used to be illegal and considered stock manipulation), while also rewarding its top executives with gigantic compensation packages, side benefits like private jets and paying for executive’s tax bills, and stock options.
In Instance 1 and to some extend Instance 2 (if success with Instance 2 loop back to Instance 1), the fruits of growth are enjoyed by everyone who participates in making the organization successful. However, if the focus for the org’s management and board is using free cashflow mainly for Instance 3, then the corporation’s growth benefits only an elite few.
Unfortunately, in the post-Reagan U.S., and even more so in the Trump years, the benefits of GDP growth have gone mainly to those comprising Instance 3 - large corporations, their C-Suite executives and their shareholders.
Not coincidentally, increased worker productivity - while historically tracking with increased worker compensation - now goes mainly to corporations and the elite:
As GDP continues to grow, where do we stand as a country?
A Federal Reserve survey found 37% of Americans couldn't cover a sudden $400 expense with cash or cash equivalents
A US News survey found that 43% of Americans do’t have the funds to deal with a $1,000 emergency
A Zebra Insurance survey found 46% of respondents didn’t have enough savings to cover even a month of expenses
Not good. Where has all of that value of final goods and services produced ended up?
This chart pretty much tells the story:
Billionaires and the Epstein Class have more than they can ever spend in 1,000 generations, and they’re spending a shit ton of money today to ensure the rest of us continue to struggle while they buy their 10th home, 350-foot super yacht and private jet(s) all while building underground bunkers or securing visas (effectively, citizenship) in faraway places to protect themselves when everything falls apart.
So don’t let the GDP touters fool you. If the rules of the game are such that the benefits of growth aren’t distributed equitably amongst all of us, GDP growth is just another tool for the wealthy elites to live in their bubble world of luxury while nearly half of Americans struggle to get-by day-to-day, praying they don’t lose their job or buy medicine or need to fix their car.
This is the Republican scam and always has been - at least since the days of Reagan.
Actively make sure government does not work in the eyes of voters/citizens, then blame government and Democrats for government not working. Use that strategy to treat government as a personal piggy bank to enrich family, friends, donors and cronies.
Cut taxes on corporations and the wealthy to transfer wealth upwards (but always denigrate safety net programs that they claim unfairly transfer wealth downwards).
Promise that economic benefits will “trickle down” from the wealthy elite to working and middle-class Americans (hint: They. Never. Do.).
Ignore deficits and debt when in power to transfer wealth upwards but decry deficits and debt when Democrats are in control and attempt to reduce inequality.
Rile up low-information (i.e., ignorant) voters by bombarding them with cultural inanity such as trans people are threatening your kids and destroying our society, while immigrants are somehow the reason you're struggling economically and your life sucks (hint: It’s. Not. True.)
Sadly, it has worked. But it can only work for so long. We’ve got an economy of the elite, by the elite and for the elite. But history shows us that when inequality becomes too great, and opportunity fades way, that’s when the pitchforks come out.
Belatedly in honor of Dolly.
Dolly Parton - 9 to 5
