Back in April (Pump Priming, 4/15), I wrote “the jury is still out on the Great Drought of 2013. Still, surveyors in the Sierras just reported the snowpack is about half normal after the driest January-March since they started keeping records in 1895.”
Well, the jury is in, and 2013 is ending as the driest year on record. Don’t know if this is further evidence of climate change, but you may want to consider cacti instead of tulips for your garden this spring.
On the money front, real growth in the third quarter was 4.1 percent and unemployment has fallen to 7.0 percent, further evidence the economy is okay despite efforts by the GOP to make Obama look bad before the 2014 election.
Nominal GDP should be comfortably over $16 trillion for 2013, a gain of over 6 percent.
Saw a FED report last week that there’s been a $2.2 trillion rebound in home equity since last year, a record for a 12-month period.
The Dow and NASDAQ composite reached new highs last week. That’s an 82 percent gain in the Dow and a 155 percent gain in the NASDAQ since the pre-Obama close in Dec. 2008.
Hard to estimate totals since many investments are privately owned, but one source also put investments at $16 trillion, which means the net gain in investments over five years is in the $7-8 trillion range.
Unfortunately these gains are not spread evenly. You probably have friends who couldn’t stomach the plummeting value of their retirement accounts in 2008 and got out at the bottom. If they waited to get back in, they’re probably skeptical about numbers that show the recovery. So the rich are getting richer again, but not everybody is sharing.
I’m still searching for data on how the public sector did oin 2013. Many state and local governments have gotten their current accounts in balance which offers welcome relief. I did find that Calpers, the pension fund for lots of public employees, had assets recover to $278 billion this year from a low of $164 billion in 2008. Too late to save Newport Beach’s trash haulers, but maybe it will take some of the steam out of the mindless rush to outsource everything.
Despite the recovery, income distribution will be a major topic in 2014. The rich are getting richer, but the middle and lower income levels have been going backward since the 1980s. Culprits include globalization, tax changes going back to the Reagan years, trends in education, etc., so there’ll be plenty to write about in 2014.