How the Fed Killed Growth and Mugged the Hamburger Instead, by David Stockman

The Fed has robbed savers, driven U.S. manufacturing to places like China and Mexico, facilitated the government’s debt binge, and debased the dollar’s purchasing power. Other than that, it’s done a great job. From David Stockman at lewrockwell.com:

Recently, it was reported that US industrial production rose in April for a fourth consecutive month, and owing to a jump in auto assemblies was up 1.1% from March and 6.4% versus prior year. So the usual suspects were out beating the Wall Street tom-toms about economic strength and no recession on the horizon.

But as demonstrated in the chart below, what we are mainly getting once more is born-again production, not net growth. That is, remove the April 2020 Lockdown swoon and scroll back to the interim high in December 2014 and what do you get?

Well, what you get is a piddling 0.26% per annum growth rate over the past 7.5 years. And for want of doubt, dial back to the pre-crisis peak in November 2007 and you get a per annum growth rate of just 0.21% over the past 14.5 years.

US Industrial Production Index, November 2007-April 2022

So, no, the US industrial economy is not strong—it’s been flatlining for the better part of the current century. And that’s something new under the sun, not in a good way.

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