Tuesday, March 01, 2011

The ObamaConomy

Applicants at Oshkosh Truck Corp lining up for ~700 jobs.

(Pic credit JSOnline Mark Hoffman)

In the six quarters since the recession ended, the economy under Barack Obama has grown by about 4.4%, and by only 2.7% in the most recent four quarters. By comparison, in the six quarters after the early 1980s recession ended while Ronald Reagan presided, GDP increased by almost 10%, with 8.5 points of that growth taking place during quarters three through six.

The glaring shortfall in growth under Obama might not be so troubling but for the catastrophic results it has caused in the employment market. In mid-January, I noted, based on data available at the time, that Reagan’s first six post-recession quarters saw the creation of over 4 million jobs, while only 72,000 jobs were created during Obama’s comparable six quarters.

Incompetence, doctrinaire Socialism, direct sabotage of private-sector.

You expected better results?

PJ Media


J. Strupp said...

Tale of two different recessions of course:

The recession of the early 80's was Fed. induced and resolved rather quickly via tighter monetary policy to squeeze out high inflation expectations. This one was caused by a demand shock which historically takes years to resolve (read "This Time is Different"). I guess I have to remind you of this again from time to time so you don't attempt to rewrite history that we all just lived through over the last 3 years.

No matter, the way to faster growth following a demand shock recession/depression is for the government to pick up the slack and create demand. We didn't. We aren't. Your side of the argument cares about immediate deficit reduction which runs contrary to higher GDP growth and higher employment (see England). You can't care about both in the short term, Dadster. It's fine if you think we need immediate fiscal restraint. But please spare me your deep concern over growth and job creation when your side of the aisle is trying to do everything to balance the budget and slash jobs (public and prviate) at the same time. Like I said, feel free to push this agenda (Obama is). Just make it clear that slower growth and higher unemployment over the next decade is an acceptable outcome of your agenda. You can't change the math so embrace the outcome.

Deekaman said...

Government doesn't create growth and I have about $3 trillion to prove it.

Amy said...

Hm. Obama's gonna have to work harder. That's a line for jobs, not a line for stale bread and government cheese....

J. Strupp said...

Government can create demand. This is a factual statement no matter what side of the aisle you are on. Your number refers to debt. Which doesn't makr any sense.

Deekaman said...

See my previous comment. It clearly has not worked.

J. Strupp said...

What has not worked? We didnt spend 3 trillion on boosting demand if thats what you mean. Not even close. If we did we would be in much better position today then we currently are.

Deekaman said...

Tell me what HAS worked. And "created or saved" and "would be much worse" don't count.

J. Strupp said...

Unemployment Insurance extensions have worked well. Emergency federal aid to states undergoing a budget crisis as revenues collapsed early in the crisis have worked. Tax cuts worked to a very minor degree.

Infrastructure spending was never tried for the most part. In the end, most of Fed. stimulus ended up being offset by the collapse in state balance sheets. We really didn't spend all that much in boosting AD to be honest. $3 trillion would have made a difference.

Mark Zandi and Alan Blinder have a good summation of the stimulus package impact:


Deekaman said...

How has unemployment insurance done anything other than encourage people to not take the jobs that are out there? "Emergency aid to states" just allowed them to dig a bigger hole as we have seen here in Wisconsin.

Tax cuts?

I have not read Zandi and Blinder, but I will.

J. Strupp said...

"How has unemployment insurance done anything other than encourage people to not take the jobs that are out there?"

What jobs were/are "out there"? Again, I don't live in a world of anecdotal evidence. The data tells the story. Workers per job opening was aweful over the last 2 years and continues to be at crisis levels:


UI has allowed people, who cannot find a job, the ability to survive during this crisis. People on UI tend to use every last penny they receive to put food on the table which boosts AD. This is accepted by pretty much every economist in the world as being essential government spending in times of severe recession/depression.

"Tax cuts?"

Yes, tax cuts. You got one via ARRA. You didn't know that?

Anonymous said...

"How has unemployment insurance done anything other than encourage people to not take the jobs that are out there?"

Give a holler when you learn the difference between what unemployment insurance pays vs. an actual job.

Deekaman said...

I actually know from experience. I also know from experience that there are quite a few, mostly young, who are "taking time off". They have no bills and no responsibilities. It pays too much.

Deekaman said...

There was no "tax cut" from ARRA. Rebate, I suppose, but no cut.