Saturday, September 3, 2011

Three Charts (not) to Email to Your Right-Wing Brother-In-Law suggests “Three Charts to Email to Your Right-Wing Brother-In-Law". Here are a few pictures to think about before you do so.

The graphs created by select the last year of the Bush presidency (not his entire term) to note that the recession started in 2008. Recessions actually happen very frequently in the US economy. This gives us a wealth of data with which to compare the current President’s performance. The first graph in the picture below plots the trends of many recessions. We evaluate using the same basis as employment statistics. In particular, we plot the employment as a percentage of its lowest value during a recession over time, for a number of recessions (from 1950 on). We can look at the growth of employment after the trough of a recession. Usually, the economy recovers rather quickly; in the graph, this corresponds to a steep uptick after hitting 0.

The current recession is the very bottom black line on the graph. This means that currently, we’re doing worse than any recession in the past 60 years in terms of recovery. Since Obama had been president for months before the trough, it wouldn’t seem natural to blame Bush alone for the slowest recovery that we have seen in the last 60 years. Just below the first graph, there is a comparison our recession--the blue line--with the average recovery after a recession. We are doing a poor job relative to the average.

In the second column, we look at another interesting trend: job growth before and after the passage of Obamacare. While the country seemed to be recovering at a reasonable rate and coming out of the recession before the passage of this bill, job growth slowed dramatically immediately following the passage of Obamacare in April 2010. Below this, the last graph depicts the actual stimulus rollout. The solid black line depicts funds received by organizations from the stimulus. Contrary to the deceptive picture painted by, the stimulus has been doled out at a fairly constant, increasing rate since the beginning of 2009. The article from, however, makes the ridiculous suggestion that the slowing of job growth and the constant unemployment rate is caused by the stimulus “winding down”. That is false. Just because there is no bill on the table doesn't mean that our economy isn't being "stimulated," and these are the results.


  1. Payrolling is the business practice of referring a contingent worker to a staffing vendor or payrolling provider so that they are the employer of record responsible for employer taxes, payroll, and all legal matters pertaining to employing workers.


  2. The initial rebound from the recession was, as is typical for recessions fairly reasonable - particularly in the markets. Hence the statements by Obama's economists that the recession officially ended circa 2Q09. Remember "Recovery Summer". All of that related to events long before Obama's policies could have an impact since little legislation had been passed. Unfortunately Obama's policies of hyper-regulation, increased taxation and the passage of a massive unfunded entitlement in Obamacare that immediately raised the prices of every business (who provides insurance) not to mention implied massive future taxation that had to be entered into every business plan, augmented further by the massive squandering of circa a trillion dollars of federal spending largely in payoffs to unions directly (the rip-off of GM note holders to reward the UAW) and indirectly by financing expansion of federal and state government and the SEIU together combined with a campaign of vilification of business produced an atmosphere where businesses saw the handwriting on the wall. Rational expectations trumped the Keynesian attempt at stimulus. Businesses focused on making themselves more robust by building stronger balance sheets, reducing expenditures, deferring expansion and the normal rebound from recession converted to the current stagnation . . . . to be followed by stagflation, hyperinflation, and economic collapse unless this irrational behavior is reversed. Obama adopted economic policies opposite to those of Reagan and produce economic consequences opposite to those of Reagan. The only small consolation is knowing that the world is a logical place after all.