NO, THEY’RE NOT CRAZY CONSPIRACY THEORISTS. THEY'RE JUST PISSED OFF.

My husband found some startling statistics on the decline in the average per capita disposable income of Americans—adjusted for inflation-- over the past 60 years.  Disposable income is the amount of money that an individual or household has available to spend or save after income taxes have been deducted.  The statistics are grouped and compared by presidencies from Lyndon Johnson to Joe Biden and can be viewed in a slide show produced by Microsoft News.   I’ve also summarized and reproduced them in the text below. 

Although real per capita disposable income (unadjusted for inflation) has steadily risen since the days of Lyndon Johnson, as shown by this chart produced by the St. Louis Fed, because of inflation, those gains have been not just been erased; they have actually been reversed.

Regardless of which party has controlled Congress or determined who sat in the Oval Office since Lyndon Johnson occupied it, Americans’ per capita disposable income has been on a steady downward trajectory when you take inflation into account.    

In 1963, at the end of Johnson’s term, the average real per capita disposable income was $17,181, which is equivalent to $130,520 in 2023 dollars.  My father earned a pretty average income in 1963, and he was able on a single salary to send me to Radcliffe College in 1965, comfortably service the mortgage on a four-bedroom house on an acre in New Jersey, and drive a Ford Country Squire like the one below.  My mother did not have to work to provide our lifestyle.  We were middle middle class.

By 2023, however, the average per capita disposable income adjusted for inflation had dropped to $46,557—a decline of 65% as compared to 1963.  Who could afford to send a child to an elite Eastern college, pay the mortgage, and own a car on that kind of single income?  Answer:  No one.  (By the way, my room had the dormer window, second from the right.)

No wonder many Americans have seriously soured on the economy and see the country as headed in the wrong direction.  No wonder these same Americans are looking for political change, any change, because in their world, life hasn’t gotten better in at least two generations.  In fact, it’s gotten worse. 

How much worse economic life has gotten can be seen from the statistics from the MSN slide show, excerpted here.  When you look at the disposable income figures below, remember that they are an average, not a mean.  They take into account the sharp increase in wealth and resulting large increase in disposable income among the very rich, as well as the appreciation in ordinary and extraordinary investors’ stock portfolios.  The average American has not benefited from these gains reported by the St. Louis Fed.  On the contrary, the average American is seeing the American dream crumbling.

From Microsoft News:

[A president’s] economic performance continues to heavily influence how people vote. If the economy does well, an incumbent president has a much better chance of being re-elected.

To be fair, the president does have some power to influence the economy. For one, trade policy can make a big impact. And during times of crisis, the president can expedite relief that may significantly lessen the long-term economic damage that may otherwise have lingered.

Still, the economy is complex. When we dive into the numbers (which we'll do shortly -- the numbers will be what they were when their terms ended), we realize most presidents have been good for the economy in some ways, and less good in others.

From LBJ to Biden: How the Economy Performed Under Each President

Lyndon B. Johnson (1963-1969) 

·       GDP growth: 2.6%

·       Unemployment rate: 3.4%

·       Inflation rate: 4.4%

·       Poverty rate: 12.80%

·       Real disposable income per capita: $17,181

·       Disposable income per capita (adjusted for inflation): $130,520

Richard Nixon (1969-1974)

·       GDP growth: 2.0%

·       Unemployment rate: 5.5%

·       Inflation rate: 10.9%

·       Poverty rate: 12.00%

·       Real disposable income per capita: $19,621

·       Disposable income per capita (adjusted for inflation): $110,961

Gerald Ford (1974-1977)

·       GDP growth: 2.8%

·       Unemployment rate: 7.5%

·       Inflation rate: 5.2%

·       Poverty rate: 11.90%

·       Real disposable income per capita: $20,780

·       Disposable income per capita (adjusted for inflation): $95,602

Jimmy Carter (1977-1981)

·       GDP growth: 4.6%

·       Unemployment rate: 7.4%

·       Inflation rate: 11.8%

·       Poverty rate: 13.00%

·       Real disposable income per capita: $21,891

·       Disposable income per capita (adjusted for inflation): $67,143

Ronald Reagan (1981-1989)

·       GDP growth: 2.1%

·       Unemployment rate: 5.4%

·       Inflation rate: 4.7%

·       Poverty rate: 13.10%

·       Real disposable income per capita: $27,080

·       Disposable income per capita (adjusted for inflation): $60,887

George H. W. Bush (1989-1993)

·       GDP growth: 0.7%

·       Unemployment rate: 7.3%

·       Inflation rate: 3.3%

·       Poverty rate: 14.50%

·       Real disposable income per capita: $27,990

·       Disposable income per capita (adjusted for inflation): $54,005

Bill Clinton (1993-2001)

·       GDP growth: 0.3%

·       Unemployment rate: 4.2%

·       Inflation rate: 3.7%

·       Poverty rate: 11.30%

·       Real disposable income per capita: $34,216

·       Disposable income per capita (adjusted for inflation): $53,895

George W. Bush (2001-2009)

·       GDP growth: -1.2%

·       Unemployment rate: 7.8%

·       Inflation rate: 0.0%

·       Poverty rate: 13.20%

·       Real disposable income per capita: $37,814

·       Disposable income per capita (adjusted for inflation): $49,141

Barack Obama (2009-2017)

·       GDP growth: 1.0%

·       Unemployment rate: 4.7%

·       Inflation rate: 2.5%

·       Poverty rate: 14.00%

·       Real disposable income per capita: $42,914

·       Disposable income per capita (adjusted for inflation): $48,811

[NOTE for 2024] Donald Trump (2017-2021)

·       GDP growth: 2.6%

·       Unemployment rate: 6.4%

·       Inflation rate: 1.4%

·       Poverty rate: 11.90%

·       Real disposable income per capita: $48,286

·       Disposable income per capita (adjusted for inflation): $48,286

Donald Trump is mostly better than average. Inflation was just 1.4% during his years, which is the second lowest. The poverty rate during his years also ties him with Ford for the second lowest on this list. GDP growth was also fourth highest for him. At over 6% though, unemployment was on the high end for him, putting him fifth highest in that category.

[NOTE for 2024] Joe Biden (2021-Present)

·       GDP growth: 2.6%

·       Unemployment rate: 3.5%

·       Inflation rate: 5.0%

·       Poverty rate: 12.80%

·       Real disposable income per capita: $46,682

·       Disposable income per capita (adjusted for inflation): $46,557

As of this writing, Biden has been in office for a little over two years, so it's still difficult to compare him to other presidents who completed a term or two. Nevertheless, the unemployment rate for Biden is the second lowest on this list, and GDP growth is the second highest. He is in the middle of the pack for poverty and inflation.

Note, too, that disposable per capita income has continued to decline during the Biden presidency—from $48,286 under Trump, to $46,557 under Biden--so far.  That could change:  it could further decline or improve, but it is unlikely to improve to a degree that would be perceived as significant.

To sum up:  The reduction in an inflation-adjusted disposable income of $130,520 in 1963 to one of $46,557 in 2023 means the average American today has only 35% of the disposable income he or she had 60 years ago.  These Americans have seen their ability to consume and to save eroded by inflation and the surge of extreme wealth upward.  They know they keep losing ground every year.  They are neither crazy conspiracy theorists nor are they stupid.  They're royally pissed off but also afraid for their future and that of their children.  Their anger and fear is likely to be an important factor in the 2024 election. 

Because “economic performance continues to heavily influence how people vote,” as the MSN report says, those who have not benefited from the American economy will probably vote for change.  Sadly, however, they are unlikely to get the change they need, because the people running the global economy--and effectively, the American voters’ lives-- are not their elected officials.  They are the globalists, the people who showed up to see and be seen at COP28 in Dubai last week and who will show up to see and be seen at the World Economic Forum in Davos in January.   (Oh, look!  Attending Davos in 2014 cost almost as much as an average American's real disposable income that year.)

The fact is, the people who determine disposable income are the donor class, the hedge fund managers, the think tank hot shots, the central bankers, the NGO philanthropists, and the corporate CEOs.  In other words, they are the people who have seen their disposable income skyrocket at the expense of others.  

Sixty-five percent less in one's wallet is the kind of thing a person notices. 

Keep it real!

Marilyn