More stuff that never happened before…
We keep a list of things happening in this recession, which have never happened before. We have already showed you how industrial capacity dropped for the first time during the dot-com bubble collapse, and again in this recession. We also showed you that the current fall in the ability of the United States to produce goods dwarfed that previously unprecedented fall.
Now we want to show you something that is altogether unprecedented in post-war history.
Below is a chart of US annual GDP since 1947, plus imports into the United States during the period. Normally, GDP is calculated on the basis of all domestic output minus the things we import from abroad. However, in the US case – and only in the US case – we think the subtraction of imports from GDP is entirely unnecessary, because, as we showed earlier, the US alone can import without driving down the value of its currency, or suffering a collapse of domestic consumption. What occurs, instead, is the relocation of industrial capacity off-shore, as previously mentioned.
United States GDP plus imports since 1947
As you can see from the chart, there hasn’t been a year over year fall in total US GDP plus the value of its imports since 1948. (The fall in 1948 is too small to be seen on this chart.) You will also notice that by this measure, the US economy (including both domestic output and all imports) topped out at almost $20 trillion in 2008, before falling for essentially the first time in post-war history.
Below we show a year over year change in GDP plus imports:
GDP plus imports, year over year change
What this means is that there has always been a shadow GDP in the US economy that is not caught by conventional statistics. American companies can, for instance, relocate their operations offshore and import back into the United States as long as the US is owner of the world reserve currency – these imports are the unpaid labor of the trade surplus countries captured by the United States Dollar Empire. It also means that periodic recessions, as we have experienced since 1948, never resulted in a contraction of the US economy when the value of imports are added to that which is domestically produced. The recessions likely were engineered solely to keep wages stagnant.
This “recession” marks a change: the combined value of GDP plus imports has fallen for the first time in post-war history and by nearly 7 percent.
