R. Emmett Tyrell Has Money Illusion

Cactus treats to some hilarity from R. Emmett Tyrell:

If their calls for retreat gain no support from the electorate, perhaps they will change the subject to another of their favorite misconceptions, to wit, the economy is going to hell. Actually, the economy is chugging along in a healthy and protracted period of growth. For the past five years, per capita gross domestic product has grown at 11%. We are living through a vast global economic boom, and the Democrats seem completely unawares. In 2008 their presidential candidate will be moaning that we have lost a war and are economically in a hell of a mess. The Republican will only have to point to a healthy economy and the success of General Petraeus’s splendid army to win. Then the Democrats will whine that the Republicans stole the election from them. That is my prediction, and I base it on the evidence.

I did leave off most of his rant as to how we are winning the war in Iraq but we Democrats are just too stupid to recognize it. After all, Cactus did ask:

Why not adjust for inflation?

Cactus was also trying to reproduce over what five-year period that nominal per capita GDP actually rose by 15 percent. I’m not sure either but I did check the GDP deflator for 2007QII versus the GDP deflator for 20022QII using table1.1.9 of this source. It would seem prices have risen by 15 percent over the past five years. So real per capita GDP fell by about 4 percent and Mr. Tyrell is so unaware of the distinction between nominal income and real income that he thinks the economy is booming? OK, Lawrence Kudlow makes the same mistake routinely. The founder of the American Spectator is as stupid as those nitwits at the National Review! Go figure!