What If We’re in a Depression But Don’t Know It?

by Charles Hugh Smith

How could we be in a depression and not know it? Well, there are a couple of ways:

  1. The official statistics for ‘growth’ (GDP), inflation, unemployment, and household income/ wealth have been engineered to mask the reality.
  2. The top 5% of households that dominate government, Corporate America, finance, the Deep State and the media have been doing extraordinarily well during the past eight years of stock market bubble and ‘recovery,’ and so they report that the economy is doing splendidly because they’ve done splendidly.

What If We’re in a Depression But Don’t Know It?Rather than accept official assurances that we’re in the eighth year of a ‘recovery,’ Smith looks at a few charts and reaches his own conclusion. He starts with the civilian labor force participation rate—the percentage of the civilian work force that is employed and moves on through wages as a percentage of GDP; GDP per capita and median household income; the growing changes since 1973 to wages among men at the top and middle of earnings distribution; corporate profits after tax; the Fed’s balance sheet; net buybacks and changes in debt from US companies report and account; and stock buybacks propping up the S&P 500.

So is the economy in a depression? Not if you’re a corporate bigwig skimming vast gains from corporate buybacks funded by the Fed’s free money for financiers.

But if you’re a wage earner who’s seen your pay, hours and benefits cut while your healthcare costs have skyrocketed—well, if it isn’t a depression, it’s a close relative of a depression.


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