The Worst Economic Recovery Since the Great Depression
By Peter Ferrara on 3.14.12 @ 6:08AM
And all of it a preview of the Great Reelection Crash of 2013.
The record of President Obama's first three years in office is in, and nothing that happens now can go back and change that. What that record shows is that President Obama, with his throwback, old-fashioned, 1970s Keynesian economics, has put America through the worst recovery from a recession since the Great Depression. The American people are much poorer now because of that, and will remain poorer, falling farther and farther behind, until we change course and restore traditional American prosperity.
The recession started in December, 2007. Go to the website of the National Bureau of Economic Research to see the complete history of America's recessions. What that history shows is that before this last recession, since the Great Depression recessions in America have lasted an average of 10 months, with the longest previously lasting 16 months.
Dude, Where's My Recovery?
Yes, the economy was in recession when President Obama entered office, which he never tires of telling us. But that was not unique to Obama. There have been 12 recessions in America since the Great Depression. The American people have forgotten what that was like because President Reagan and his Reaganite Republicans gave us a 25 year economic boom from 1982 to 2007 with no serious downturn.
President Obama's responsibility was to manage a timely, robust recovery to get America back on track again. His record in achieving that is not to be measured from the worst of the recession, but to previous recoveries in U.S. history. And, no, President Obama cannot say that his recovery is so bad because the recession was so bad (worse than he thought he now tells us, after spending all of 2008 telling us it was the worst recession since the Great Depression). The American historical record is that the worse the recession the stronger the recovery, as traditional, long-term, American prosperity has always been restored.
Based on that historical record, we should be in the third year of an economic recovery boom right now. That is what we experienced under Reagan, which was the last time we recovered from a recession of similar magnitude.
In the first 2 ½ years of the Reagan recovery, the American economy created 8 million new jobs, the unemployment rate fell by 3.6 percentage points, real wages and incomes were jumping, and poverty had reversed an upsurge started under Carter, beginning a long-term decline. While Obama crows about 227,000 jobs created last month, in September, 1983 the Reagan recovery less than a year after it began created 1.1 million jobs in that one month alone. In the second year of the Reagan recovery, real economic growth boomed by 6.8%, the highest in 50 years.
In contrast, under President Obama, unemployment actually rose after June 2009, when NBER counts the recession as officially ending, and did not fall back down below that level until 18 months later in December 2010. Instead of a recovery, America has suffered the longest period of unemployment this high since the Great Depression. Even today, 51 months after the recession started, the U6 unemployment rate counting the unemployed, underemployed, and discouraged workers is still nearly 15%.
And that doesn't include all the workers who have fled the workforce under Obama's economic oppression. Under Obama's supposed recovery, the number of working age Americans not in the labor force rose by 7.14 million. As John Lott and Grover Norquist recently observed, "There is no comparable post-World War II 'recovery' where this type of exodus has occurred."
While in the second year of Reagan's recovery the economy boomed with real economic growth of 6.8%, the highest in 50 years, last year the American economy limped along with real economic growth a paltry 1.7%. The first quarter of this year will be similar.
Today, over 4 years since the recession started, there are still almost 24 million Americans unemployed or underemployed. That includes 5.6 million who are long-term unemployed for 27 weeks, or more than 6 months, the highest since the Great Depression. The number of Americans employed part-time for economic reasons was still 8.1 million. The Bureau of Labor Statistics (BLS) says, "These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job."
Another 2.6 million persons were marginally attached to the labor force, essentially unchanged from a year earlier. The BLS says, "These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey."
African Americans have been suffering an outright depression under Obama, with unemployment today, 51 months after the recession started, still over 14%. Black unemployment has been over 14% for Obama's entire term in office. Black teenage unemployment today is still nearly 35%, where it has persisted for Obama's entire term as well.
Hispanics have also been suffering a depression under Obama, with unemployment today still in double digits at nearly 11%, where it has also persisted for Obama's entire term. Over one fourth of Hispanic youths remain unemployed today, which also has persisted for years.
The Census Bureau reported last September that more Americans are in poverty today than at any time in the entire 51 year history of Census tracking poverty. Americans dependent on food stamps are at an all time high as well. White House spokesman Jay Carney recently tried to blame the Republicans for that, saying that it was their policies of deregulation that caused the recession. But actually it was liberal policies of overregulation forcing the looting of the banks for subprime loans under threat of discrimination suits that caused the recession. See, e.g. Paul Sperry, The Great American Bank Robbery.
Moreover, it was Obama's responsibility to foster a timely, robust recovery restoring traditional American prosperity. Where is that? The absence of that is because Obama doesn't believe in traditional American anything.
Census also reported last September that real wages and incomes have been falling so steadily under Obama and his confused, throwback, Keynesian/neo-Marxist Obamanomics, that real median family income in America has dropped all the way back to 1996 levels.
Obama's Rip Van Winkle Act
Supposedly a forward-looking progressive, Obama proved to be America's first backward-looking regressive. His first official act in office was to increase federal borrowing, the national debt, and the deficit by nearly a trillion dollars to finance a supposed "stimulus" package, based on the proven failed Keynesian theory left for dead 30 years ago by President Reagan. Keynesian economics holds that increased government spending, deficits and debt are what promote economic growth and recovery. That theory arose in the 1930s as the answer to the Great Depression, and, of course, it never worked.
Obama's dogged, unlearned, continued pursuit of such failed Keynesian policies is why his own budget shows that by Election Day 2012, he will have doubled the national debt, in just one term of office, added as much to the national debt in that one term as all prior Presidents, from George Washington to George Bush, combined!
This was the beginning of President Obama's Rip Van Winkle act, pretending not to notice anything that happened over the prior 30 years proving the dramatic, historic success of the new, more modern, supply-side economics. That more modern view holds that incentives for increased production are what promote economic growth and recovery. Indeed, Obama's Rip Van Winklism pretended not to remember the 1970s either,