Comparing Economic Recoveries
On Saturday, the following graphic came across the electronic transom from the Obama for America campaign, suggesting that I “should forward” it, e.g., sharing it on Facebook or on Twitter.
Note the emphasis on job creation.
But first, let’s take a longer view, and focus on historical recovery more generally. In a quarterly update in August, the Council n Foreign Relations the “economic recover in historical context.” After asking, “How does the current recovery, which according to the National Bureau of Economic Research officially started in June 2009, compare to those of the past?,” they provide a series of charts, including the following two that compare the current recovery to the real GDP growth “relative to the end of recession” as well as comparing the growth in nonfarm payrolls.
A bit more context. A search for “economic recovery” at the Concise Encyclopedia of Economics produced a short essay on “disaster and recovery" by Jack Hirshleifer. Especially interesting is how quickly Germany and Japan recovered from complete military devastation. Hirshleifer begins:
“Defeated in battle and ravaged by bombing in the course of World War II, Germany and Japan nevertheless made postwar recoveries that startled the world. Within ten years these nations were once again considerable economic powers. A decade later, each had not only regained prosperity but had also economically overtaken, in important respects, some of the war’s victors."
Now, let’s focus on comparing the current economic recoveries, however. Over this past weekend, at Investor's Business Daily, John Merline asks whether the “Obama economic recovery is as bad as it appears?” He writes, in part:
“But the data are clear that Obama's economic recovery — which started in June 2009, five months after he was sworn in — has been worse than any recovery since the Great Depression.
“Overall economic growth has been slower in this recovery than in any of the previous post-World War II recoveries, according to the Minneapolis Fed, using data from Bureau of Economic Analysis.
“In the 12 quarters since the Obama recovery started, real GDP has climbed 6.7%. That's below even the GDP growth rate in the 12 quarters after the 1980 recession ended — despite the fact that there was the intervening deep and prolonged 1981-82 recession.
“The picture isn't any better when looking at job growth.
“Obama often boasts that the economy has added 5.2 million private-sector jobs in the 31 months since employment bottomed out in February 2010. But that rate of job growth lags every previous recovery as well if, as Obama does, you start counting at the point where jobs bottomed out."
If you believe that a picture is worth a thousand words, Merline provides the following chart comparing economic recoveries back to the 1948-1949 recession:
In an editorial this weekend, the Wall Street Journal laments the “chronic fatigue economy,” complaining, “We borrowed $5 trillion and all we got was this lousy 1.7% growth.” However, they include the following chart comparing the President Reagan and President Obama economic recoveries. The WSJ chart, which follows, compares the two economic recoveries:
As Fox News likes to say, "We report, you decide." For your humble scribe, the answer is clear. However, let the American Thinker's Rick provide the conclusion. On May 30, 2012, he wrote:
"The one thing about economic issues during an election is that people decide for themselves, based on their own personal financial situation, how good or bad the economy is. If they, or their brothers, sisters, uncles and other relations are having a problem getting a job, the unemployment rate becomes meaningless and they will likely vote based on their personal perceptions of the economy."
And finally, be careful the next few days as Hurricane Sandy does her thing on the Washington, D.C. area. I probably won't be growling for the next two or three days.
Additional references that discuss post-war recoveries, or this recovery, see Peter Ferrara's explanation at the American Spectator or Conn Carroll at the Washington Examiner. Also posts by James Pethokoukis at the American Enterprise Institute's blog, AEIdeas -- here and here. Economist John B. Taylor discusses economic recoveries on October 15, October 17, and October 25, 2012. Finally, Greg Mankiw has posts about economic recoveries on March 4, 2009, March 3, 2009, which includes the note in an analysis by the President's Council of Economic Advisers noting that rebounds follow recessions, and June 5, 2012. The Cato Institute's Jim Powell had this article in Forbes explaining "how bad economies recover fast when government gets out of the way."