I find myself more and more these days trying to give historical context to current events, to clarify current events for the various millennials in my life.
Here’s a big one: while the media is turning cartwheels about the “Obama Recovery” (happening an unprecedented eight years after the crash – worse than the Great Depression), the best quarter of GDP growth in this “recovery” is lower than the worst quarter of Reagan’s recovery, from 1983 through 1987.
But never mind – the media will keep the narrative of Obama the Economic Lightworker warm and dry.
But with Hillary Clinton in the picture, there’s another wrinkle. John Hinderaker notes at Powerline (with some emphasis added):
n 1992, Bill Clinton announced that “It’s the economy, stupid.” That was pretty much the sole theme of his campaign. He ludicrously claimed that the country was then experiencing “the worst economy since the Great Depression,” a lie that the press, to its everlasting shame, not just allowed but often endorsed. So what was the level of GDP growth that Clinton relentlessly denigrated?
According to the Bureau of Economic Analysis, the quarterly growth numbers for 1992, in chained 2009 dollars, were 4.8%, 4.5%, 3.9% and 4.1%. That’s right–the growth that Bill Clinton derided as the “worst economy since the Great Depression” was around four times what we are now seeing under Barack Obama. And Hillary Clinton promises to continue Obama’s anti-growth policies.
I remember the recession at the tail end of the Bush 41 administration – as the economy adjusted from a Cold War economy to civilian spending – very well; it slowed down my transition from radio to IT by a few harrowing months when I was welcoming a couple of new children into the world. But it was a short recession with a sharp recovery (“Thanks, Ronald Reagan, for that “peace dividend!”) that led to 15 mostly-prosperous years…
…whose various windfalls are long in the past.
How you view the recovery depends on who you are, and what you are doing.
I remember during the Bush (W) administration the monthly jobs report on NPR was always followed by grave warnings that any number less than 250,000 was a sure sign that the economy was collapsing with Recession and inevitably Depression close on its heels. Its marvelous how govt economists have learned to use a smaller glass rather than complain about it being half empty all the time.
1 is the new 5. And if anyone thinks the recession is over, boy are they deluded and ignorant. Or just drunk on libturd Kool-aid.
You’re lying with statistics.
Pretty safe bet that when you provide only a link to Hinderaker, a discredited source, and no links to a reputable source — or any source — for the rest, that you have diddly squat to support your claims, and are cherry picking. Good sources don’t cherry pick, don’t provide only one metric.
http://www.nytimes.com/2009/06/01/opinion/01krugman.html?_r=0
Krugman has far better credentials that Hinderaker, AND I can produce others to support this opinion with analysis that has survived examination and criticism by other qualified economists.
You also fail to note that Reagan towards the end of his administration abandoned his trickle down economics for standard Keyensian economics plunging the US into debt that continues today.
Do you know who William Niskanen is? I do. I followed his work during the Reagan era.
“William Niskanen noted that during the Reagan years privately held federal debt increased from 22% to 38% of GDP, despite a long peacetime expansion. Second, the savings and loan problem led to an additional debt of about $125 billion. Third, greater enforcement of U.S. trade laws increased the share of U.S. imports subjected to trade restrictions from 12% in 1980 to 23% in 1988.”
Do you understand what that did to the US economy or how it relates to the statements made about the result of Reaganomics? I doubt you do.
The problem with the Obama recovery is that most of the advance of the recovery has benefited the 1% and very little has gone to the rest of the people of the United States. Not by Obama’s design, but by the rigged system that both Hillary and Bernie have been talking about this and other election cycles. It is a problem with who profited, it is not a fair indictment of the recovery overall. Had Obama faced less obstruction by the right (remember that promise of jobs being the priority when the right obtained majorities? that then became a focus entirely on making the Obama election a one-term presidency to the detriment of the country), then you might have seen a different pattern to the recovery.
Emery correctly states that recovery depends on who you are and what you are doing. You just won’t state who that was because the right never criticizes the wealthy; for example I have never seen you oppose unmerited extreme increases in compensation to the C-class no matter how inept they might be. While those increases vastly exceed compensation during other periods of broad growth in the economy that DID benefit more broadly.
How you view the recovery depends on who you are, and what you are doing.
Maybe, but I’m going to remember how the hourly people at the job I used to work were treated. If you were not part of the top 10% or so, you were gone after a few months. The Obama economy is a killer, and not just figuratively. You’d see the same guys every weekend at the Legion or at one of Waseca’s 18 liquor license holders. They were not seeing what they could do to distinguish a Chambertin from an ordinary Burgundy, to put it mildly.
“How you view the recovery depends on who you are, and what you are doing.”
That’s why we use objective measures, like GDP growth, to measure the state of the economy.
The economy wants to grow because individuals want their own economy to grow. Macroeconomics is mostly just aggregating the supply and demand of individuals. It is difficult to keep the economy from growing.
It is a charade to condemn free trade and immigration restrictions, calling them ‘anti-growth’, while praising anti-growth environmental and labor regulations.
DG,
You need to go back to my responses to your comment on the Kaepernick post yesterday. Please respond.
While I should not respond to this, I will, if only to show you your utter logical vacuity:
Pretty safe bet that when you provide only a link to Hinderaker, a discredited source…
According to who? According to what?
No, he’s not. And his post links, in turn, to a whole lot of other people…
…but I’ve already written too much. Because:
Krugman has far better credentials that Hinderaker
He’s been discredited.
AND I can produce others
You have been discredited.
to support this opinion with analysis that has survived examination and criticism by other qualified economists
Oh, really?
You CAN provide it?
Then why didn’t you?
Sort of like your neighbors who are experts on whatever subject you’re writing about, but whose identities can’t be revealed?
You’re trying to play “appeal to authority“. It’s a logical fallacy, and it’s in your comment…but I repeat myself.
Can you attack Hinderaker’s, or Joe Doakes’, assertions?
Give it a shot, instead of jabbering about “credentials” – which are only as meaningful as the results they deliver. Hinderaker delivers. Krugman does not.
NOTE, DG: Until you respond to the responses on my post about Kaepernick, not another comment of yours will EVER escape the moderation queue.
Do it now.
There will be no second request, and no compromise.
Yesterday, we had the Core-meister at City Pages mocking Conservative’s credibility for claiming the home-made shotgun was turned in or paid for. There was no evidence that was true. And then he promptly cited Sgt. Cathy Michael, the Minneapolis Police Department’s Public Affairs Officer, who confirmed the shotgun was turned in and they will pay for it. The mocker was oblivious to the sources CITED IN HIS OWN ARTICLE.
Today, we have Dog Gone complaining that John Hinderocker is not a credible source, he should cite better source material. But read the objectionable quote:
“In 1992, Bill Clinton [BILL CLINTON IS A SOURCE] announced that “It’s the economy, stupid.” That was pretty much the sole theme of his campaign. He ludicrously claimed that the country was then experiencing “the worst economy since the Great Depression,” a lie that the press, to its everlasting shame, not just allowed but often endorsed. So what was the level of GDP growth that Clinton relentlessly denigrated?
According to the Bureau of Economic Analysis, [THE BUREAU IS A SOURCE] the quarterly growth numbers for 1992, in chained 2009 dollars, were 4.8%, 4.5%, 3.9% and 4.1%. That’s right–the growth that Bill Clinton derided as the “worst economy since the Great Depression” was around four times what we are now seeing under Barack Obama. And Hillary Clinton [HILLARY IS A SOURCE] promises to continue Obama’s anti-growth policies.”
Holy cow, another Liberal mocking Conservative credibility while ignoring the sources stated in the article. Is this some new form of mental illness? Or perhaps a disease? Is it catching?
.
BG wrote: “That’s why we use objective measures, like GDP growth, to measure the state of the economy”
When one measures the world economy, the US has the strongest economy in the world.
Show us the data, eTASS. You are an engineer right? You deal in absolutes, no? Surely you can provide the specifics that led you to make your definitive statement. We’ll be waiting with bated breath, but I am not holding it.
So your natural inclination after being exposed as a dumbass is to double down on stupid?
When one measures the world economy, the US has the strongest economy in the world.
Define “Strongest”, Emery. Yes, we’re the biggest, we’ve still got good fundamentals, and all that, but….fact of the matter is that during the Obama administration, economic growth has been around 1-2% and job creation has been treading water in terms of population growth. Plus, twenty trillion in official debt and four or so times that in unfunded liabilities cast a huge shadow, I think.
And for Mad Dog: “In God we Trust, all others must provide data.” Appealing to the perceived authority of a Nobel awarded in part because of Krugman’s affinity with Obama does not count.
Emery said:
“So your natural inclination after being exposed as a dumbass is to double down on stupid?”
I can see that is your inclination, Emery …
When one measures the world economy, the US has the strongest economy in the world.
Ah, the least terminal cancer patient standard. Very apt.
How you view the recovery depends on who you are, and what you are doing.
No wonder you’re a Clinton supporter. She’s making certain that those coal miners will lose their jobs and have to go find lower paying service jobs because she doesn’t approve of what they’re doing.
I benefit from the current structure of the economy: knowledge worker, highly educated, and very successful at what I do. Does that mean that I believe that the current structure is the best for the country? No, it does not. Too many structural changes to trade have made what I do far more valuable than it should be relative to other parts of the economy.
Krugman has far better credentials that Hinderaker
Pull your little dish up close dog, I have a steaming pile of WRONG for you…
Why Paul Krugman Is Wrong – The Huffington Post
Why Was Paul Krugman So Wrong? | The Nation
Paul Krugman Is Wrong – Forbes
Paul Krugman is wrong about capitalism – Salon.com
Paul Krugman Is Wrong Yet Again About Obamacare – Forbes
How did Paul Krugman get it so Wrong? – Booth School of Business
Who Has Two Thumbs And Is Wrong About The Financial Crisis? – The Huffington Post
Budowsky: Why Paul Krugman is wrong | TheHill
Paul Krugman is Wrong… Again – The Daily Reckoning
What Paul Krugman Got Wrong About Ireland’s Economy – Daily Signal
Paul Krugman has got it wrong on austerity | Business | The Guardian
Paul Krugman and Hillary Clinton Are Wrong about the 1990s – Time.com
What Paul Krugman and Ezra Klein Get Wrong About TARP – The Fiscal Times
You poor thing, I could do that all day. You may take your dish back to the corner until you are called again.
Part of the overall problem for this recovery is, frankly , that we’re reaching debt and regulation saturation levels and that we’re at risk of “turning Japanese”. All the recoveries since Reagan have gotten progressively worse (yes, I used that word on purpose). It’s to the point that the government can’t use financial stimulus to actually stimulate the economy, and now all the “stimulus” is going into blowing bubbles in speculative investments. That’s been great for the stock market since companies are taking free money and doing mostly nonproductive things with it like buying back their stock and doing M&A. Companies just don’t see the risk of investing in productive activities like building new factories as being worth it when they can get as good or better returns at far lower risk using financial engineering.
Regional fed directors, nominated by big banks, will argue for higher rates because they would help the banks’ margins. Yellen will have an increasingly hard time holding the line.
I thought the purpose of raising interest rates was to slow down an over-heated economy, like adding an inhibitor to slow down a chemical reaction such as lead in gasoline.
Where’s the evidence our economy is overheated?
So your natural inclination after being exposed as a dumbass is to double down on stupid?
Link to support your definitive statement that “US has the strongest economy in the world.”, please. That is the question. Please answer it. Can you? Very simple task. Surely an engineer should have no problem producing such a simple answer.
JD, the economy is not overheated. But there comes a point at which interest rates will not have the effect that the Fed desires. I believe that we’re at that point right now. The Fed is making taking on debt free, but companies are using that free money for purposes other than production. Corporate debt at this point is being used for stock buybacks to reward investors, which is driving up the price of stocks. The other use of corporate debt is for M&A, which is actually destructive of jobs and production since investors demand “synergy”.
If you ask why corporations aren’t using debt for more “productive” uses, the answer is pretty simple: it’s lower risk in an environment where innovation is punished and change is heavily regulated and often criminalized, as well as where demand may not exist. Consumers in general are heavily leveraged, too, and are unable or unwilling to absorb more debt.
So I tend to agree with the bankers that interest rates need to rise. For them, they need to rise so that they can survive — it’s hard to leverage when the multiplier is multiplying a 0. But for the general economy, restoring a balance in risk taking and economic activity is necessary. Just don’t be overweighted in stocks when the Fed begins to normalize since they will be hit hard.
Are you working the slide rule eTASS to determine where the link is? Surely you have made the statement that “US has the strongest economy in the world.” based on a credible, peer reviewed data set. All we are asking for you is to show where you got that data. You know, to support the statement you made with such unerring confidence, air of infallibility and authority.
Just when I thought dumb had reached it’s nadir, a new bottom is breached.
Per nerdbert’s comments, it’s worth noting that productivity declines have been observed lately. That means that capital is not being devoted to new productivity, which seems to demonstrate that we are indeed approaching a Japan style event. Yikes.
And I would guess that, stuck in a place where taxes, regulation, and debt load all conspire to make the return on investment artificially low, the only way out is to reduce the artificial burdens (taxes, regulation, debt) in such a way as to restore ROI. In other words, disavow the Obama legacy.
Emery; yes, you’ve reached a new low, but all you have to do to recover is to either provide some evidence for your claim (since it’s vague, good luck), or apologize for it. Like Deming noted, “In God we trust, all others must provide data.”
It must be sad when the only one laughing at your jokes is you. Or are you getting caught in an internal loop of non-sequiturs? Or are you getting a hernia because goalposts you consistently have to carry are so heavy? I pity the people who have to rely on your work output. Somebody might get hurt.
bb, nerd, major companies are sitting on mountains of cash and as nerd observed, other than M&A they are not spending it. There is very little indication that global economy is going to recover any time soon which means demand sucks, for a luck of a better word. Yes, there are pockets of demand here and there, but these will be filled by capacity increases already on the books and steel in the ground. And speaking of productivity – the most jarring statistic which came out of today’s jobs report is that there are now more people in the US employed by the goobernement than by the manufacturing sector. Let that sink in for minute.
JPA asked a straightforward question, Emery. No vitriol, just a simple request to cite some supporting evidence for your inane statement. Instead of taking that opening for a bit of civil discourse, you doubled down with another inane statement.
Here’s a tip: You don’t need to make asinine statements to convince us of your qualifications to do so, but your credibility is lacking when ever you attempt to make a serious point for yourself, as opposed to plagiarizing someone else’s intellectual property.
swiftee, we are not going to get a reply from eTASS. Because he knows he cannot provide us an answer to support his statement. Because he pulled that statement out of his ass and I bet it took him all of 5 seconds to figure out it is indefensible. But maybe I am giving him too much credit and he is really that obtuse and moronic. And that would also mean he would have to admit he was wrong. And that simply cannot stand.
You see, all you have to do is go to http://www.imf.org to get the answer (I use GDP numbers in my daily work). Cannot be more official and simpler than that. And no, US does not have the strongest economy as measured by GDP. As a matter of fact, US GDP is below the world average. Sigh… I pity the fool. Everything he says is bullshit. QED.
Am I understanding you fellows correctly – all that money the employer took from my paycheck and “invested” in carefully selected stock funds for my retirement . . . is being ballooned by the Fed and will crash soon, taking my pension with it?
When one measures the world economy, the US has the strongest economy in the world.
It depends on what you mean by ‘strongest’, dunnit? And whether strongest (however measured) is actually the goal?
GDP growth in real dollars is a good first-order measure of the health of an economy. The US is doing a little better than some nations, much worse than others, and much worse than our own historical average of GDP growth.
This is not rocket science. You want GDP to grow faster, increase the marginal ROI. Increase the marginal ROI by reducing taxes or decreasing regulation in by economic sector (if that is how you want to do it).
This is all according to J.M. Keynes. I don’t know why people say Obama and the Democrats are keynesians, I think their policies would have J. M. Keynes scratching his head, wondering what the Hell theory of economics they were following.
JD, if it’s any comfort, I’m still in the market in a fairly significant way. It is, after all, the only thing with any return these days. But one of my 401(k)s allow for automatic rebalancing between funds as often as every quarter, so I take some money off the table automatically. It means I didn’t get nuked during the 2008 meltdown, I merely got slammed.
And if it’s any further comfort, I’d bet that we go Japanese and the only return on capital will be in the market, while the economy declines into the doldrums. It’s easier politically for us to wind up poor, over regulated and over dependent on the government than to take meaningful action since so many parasites seek the safety of debt slavery to the risk of capitalist freedom. I mean really, you could lose it all through bad decisions, so it’s better to wind up with a safe nothing than risk being shown to be a fool. Or at least that’s the premise behind Social Security and the Democrats’ desire to take over your 401(k).
So it’s likely the money you have in stocks is safe, but you won’t have enough to retire since there will be no way to get an adequate return on your savings. Feel better now?
Nerdbert, thanks, I needed that . . . NOT!
Side story: my wife and I exchanged our timeshare condo for a week in Cozumel this winter. Place was full of Canadians. Trump was getting headlines and a group at the bar asked me what I thought.
“I work for the local bureaucracy so my pension is funded by the state legislature, IF they decide to keep funding it. But that’s okay, because my savings are in the stock market, which is managed by the federal government. Basically, my future depends on the promises of politicians. Trump? He’s the least of my problems.”
Big laugh all around – some things are universal.
/The OECD says that compared with our chief competitors, the United States is leading the pack — by miles. From the first quarter of 2008 until the same period this year, U.S. gross domestic product expanded by 10.85 percent. That compares with growth of just 0.64 percent in the Euro area and 0.06 percent in Japan./
http://www.oecd.org/unitedstates/economic-survey-united-states.htm
Projected GDP Ranking (2015-2020)
(Source: International Monetary Fund World Economic Outlook (April-2016)
Date 04 Aug 2016)
/This ranking is based on projection by IMF outlook April 2015. In 2015, Top ten countries in nominal terms will be : United States, China, Japan, Germany, United Kingdom, France, India, Brazil, Italy, and Canada. In ppp terms, Top ten countries will be : China, United States, India, Japan, Germany, Russia, Brazil, Indonesia, United Kingdom, and France./
http://statisticstimes.com/economy/projected-world-gdp-ranking.php
Emery’s fishing report from Woman Lake near Longville, MN. The fishing has been good. Bass have moved into the wild rice and Walleyes are moving up onto the flats (6-8 ft) in the evening. We are using a ‘Texas Rig’ for the Bass and a black and gold jointed Rapala (J-11) for Walleyes. Tight Lines to my SiTD fishing enthusiasts!
JD, I know your pain. When I joined IBM the pension was gold-plated. Years later they offered a 401(k) that was lousy by any standard(*) almost all my fellow employees wondered why I jumped in 100% into what was offered. My statement was that IBM couldn’t afford that pension and it would soon go away and leave me, a relatively young employee, holding the bag. I was laughed at at the time, but they no longer have a pension plan at all. My pension got converted to a “defined contribution” cash pension at a pitiful amount because I was so young such that my 401(k) is now 3x the size of the pension I had from well before the 401(k) started. Ugly. If I hadn’t gone full into the 401(k) when I did, I would have really been screwed.
(*) And the IBM 401(k) is still lousy — you don’t even get your matching contributions until December, just in case they lay you off before that. The selections of funds aren’t bad, but the IBM part is abusive.
Emery, your stats are crap. You seem to have mistaken ‘share’ of world GP for GDP growth. Sort your chart by growth in GDP. The US is #20, with lower growth (as a percentage of GDP) than the economic power houses of Bangladesh, Nigeria, and Spain.
No BG, what you’re saying is the IMF’s and OECD’s stats are crap. Good luck with that argument.
Uh, no, Emery, I am saying that you read them wrong. The abysmal US GDP growth rate is lower than the GDP growth rates of nineteen other countries, including Nigeria, Bangladesh, and Spain.
The US total share of GDP growth in dollars is #1 because the US is the largest economy in the world. The proper comparison for our purposes is current US GDP growth rate to its historical average. That is 3.22% (1947-2016).
BG says: “The abysmal US GDP growth rate is lower than the GDP growth rates of nineteen other countries, including Nigeria, Bangladesh, and Spain.”
Do you really want to compare the US economy to that of Nigeria and Bangladesh?
eTASS, you could call you an idiot moron, but then I would be insulting idiot morons. I could call you a waste of brain cells, but you obviously do not have any.
You made a statement, and it was dead wrong by the official (IMF) measure of GDP. Nigerian economy is strong – for Nigeria. But that does not compute in your brain. I was so right about you carrying goal posts around, it must be a full time job. One of the signs of intelligence is an ability to learn and to admit you are wrong, but not for you. Ergo, you lack intelligence. You nose has been smeared in your own feces and yet you think you smell roses. You are pathetic.
I think you massively overestimate how much I think of your rambling.
I only recently discovered the “Numberphile” videos. They’re pretty awesome.
https://youtu.be/shEk8sz1oOw
Gauss was just… well, Gauss.
Me:
The proper comparison for our purposes is current US GDP growth rate to its historical average. That is 3.22% (1947-2016).
Emery:
Do you really want to compare the US economy to that of Nigeria and Bangladesh?
WTF?
BTW, the reason you should not compare the aggregate increase in US dollars during a recovery to the aggregate increase (in US dollar equiv) to other nations is because it does not give you useful information on the well being of the US economy. Think of what happens on the other end — if the US went into a mild recession for three semesters with a total of 1% decline of GDP, the raw dollar value of GDP decline would make it appear that the recession was 5X as bad as in other countries with smaller GDPs that declined by a similar amount. It is like comparing the raw number of jobs gained or lost in the US (population 320 million) with the number of jobs lost or gained in the UK (population 65 million). It is simply not a useful number.
One of the problems with having most of the wealth from the current recovery ending up in the hands of the top quintile is that people in the top quintile, who tend to be policy leaders, experience a boom while the rest of the people are suffering economically.
This is a terrible thing for a republic. The economic elite wants to stay the course, while the hoi polloi wants people like Trump or Sanders to over turn the chess board.
No BG, what you’re saying is the IMF’s and OECD’s stats are crap. Good luck with that argument.
eTASS, you ignorant slut with misplaced sense of everything and learned in nothing. What you cited were opinion pieces on what stats mean – a spin. And opinions are like assholes – you know that better than most. But then again nobody ever accused you of being able to comprehend the difference. You moved the goal posts to find the spin that suited your narrative. Good job, doggie… You are still wrong.
LIke Emery’s stats. OK, we’re doing well in comparison with the sick man of Asia and sick Europe. OK, so we’re not in the hospital….yes, glad for that, but….that’s our measuring stick? Seriously?
There is no frickin’ way Emery works in engineering. And no Emery, sanitation is not an engineering field of practice, whatever your Vista Print card says.
I don’t doubt that Emery’s an engineer–“sanitation” could simply be a great way of describing “cleanliness” (ie. clean room specs), especially in any product that uses or interacts with living thing, and I know as well that there are a lot of fellow engineers out there who believe about the same stuff that Emery does or a lot worse. I just think that it’s silly to think that a comparison with the EU or Japan–dealing with the fallout of decades of idiot economic decisions–really is meaningful for our country. Hopefully it never will be, but if Hilliary gets in for a few years, I may have to change my mind on that.