The press, even in the wake of yesterday's awful reported 2.9 percent annualized first-quarter contraction, continues to regale us with noise about the economy's "recovery" during the past five years.
As P.J. Gladnick at NewsBusters noted yesterday, CNNMoney.com's Annalyn Kurtz, in giving readers "3 reasons not to freak out about -2.9% GDP," concluded her report by telling readers that "This recovery is underway, but it's choppy and still very slow." Actually, it may have resumed this quarter. At the Associated Press yesterday, Martin Crutsinger all too predictably wrote that "the setback is widely thought to be temporary, with growth rebounding solidly since spring." After almost five years of this nonsense, it's long past time that they start telling readers, listeners, and viewers that this economy bears more resemblance to the 1930s economy under Franklin Delano Roosevelt than it does any post-downturn economy we've seen since the end of World War II. Hard proof follows the jump.
I have updated two charts I first created after May's reported first-quarter contraction of 1.0 percent ago when I realized how persistently awful this economy's performance has been.
Before going further, I should note that the scope of human suffering occurring now, though downplayed by the press, is nowhere near what it was in the 1930s, and I'm not trying to pretend otherwise.
I should also note that the government presented only annual economic growth statistics until 1947, but that the Depression itself and the recession of 1937-1938 officially began and ended at various times during the years involved. Thus, I had to estimate growth and contraction during certain quarters in those years. Those estimates are here.
With those caveats, by two specific measurements, the post-recession Obama economy has performed barely better than the economy did during the first 16-19 quarters after the Great Depression ended. Additionally, in comparison to the other post-downturn economies seen after World War II, the Depression and Obama-era economies are in a horrible class by themselves:
In every other recovery, the economy was at least 10.9 percent larger than its pre-downturn peak 16 quarters — or fewer, in several instances when an earlier subsequent recession occurred — into their respective recoveries. But 16 quarters after their "recoveries" began, the Obama and FDR economies were only 4.6 percent and 4.3 percent, respectively, larger than their pre-"Great Recession" (fourth quarter 2007) and pre-Great Depression (third quarter 1929) peaks, respectively. That's less than half of any post-recession economy we’ve seen since. Even given three extra quarters (upated to incorporate yesterday's GDP report), the Obama economy is only halfway towards matching what the worst other post-World War II recovery achieved.
One argument Obama and his administration's defenders constantly make is that the hole dug in 2008-2009 was extraordinarily deep by all but Depression-era standards. As seen below, that argument doesn't help their cause; it hurts it:
The post-Depression bounceback was dramatic because of the 29 percent contraction which preceded it. But even that degree of expansion only got the economy back to slightly above where it was in mid-1929 — and then came the recession of 1937-1938.
Given that the 2008-2009 contraction was the deepest post-World-War II contraction on record, the administration's “deep hole” argument would really dictate that the current recovery should be the second-strongest on the chart. Instead, after 16 quarters of “recovery,” it was the worst. Even given three extra quarters, it barely clings to second-last place.
My suggestion to those who follow the news: Every time you hear about "the economy," mentally substitute "the Obama economy, which has performed barely better than it did under FDR in the 1930s." If you're with friends, relatives, or acquaintances, and the broadcast report you're seeing or hearing is particularly obnoxious in its false optimism, say it out loud, and come to this post when they challenge you.
There is no point in comparing the Obama economy to any other post-World War II post-downturn economy. That's because there is no comparison.
Cross-posted at BizzyBlog.com.