I can’t believe this is necessary, a sign of the times and a perfect example/explanation of how it got this far. In case you haven’t heard, President Trump has gotten into a Twitter spat with his predecessor former President Obama. For reasons that have nothing to do with legitimate economics (small “e”), both men are attempting to take credit for this economy.
An economy that on the tablet of history actually falls somewhere in between the Great Inflation and the Great Depression. Yes, the two worst periods in the modern economic chronicle. It really is that bad and these guys are arguing over who’s responsible.
If the world made any logical sense the two of them (and George Bush, too) would hang their heads in shame. Thus, the game. By pretending everything is awesome both are making the case neither should be blamed. Presidential success stories.
Eleven years ago today, near the bottom of the worst recession in generations, I signed the Recovery Act, paving the way for more than a decade of economic growth and the longest streak of job creation in American history. pic.twitter.com/BmdXrxUAUf
— Barack Obama (@BarackObama) February 17, 2020
Did you hear the latest con job? President Obama is now trying to take credit for the Economic Boom taking place under the Trump Administration. He had the WEAKEST recovery since the Great Depression, despite Zero Fed Rate & MASSIVE quantitative easing. NOW, best jobs numbers….
— Donald J. Trump (@realDonaldTrump) February 17, 2020
Obama said he started it, made it, kept it going when the “stimulus” bill was signed. Trump fired back that Obama’s terms were economic disasters (true) and that he was the one who changed everything around (very much untrue).
The con is the measuring stick. The BLS said that the labor market’s winning streak reached 112 months in January 2020 (which further requires we ignore that +1 placeholder currently sitting in the February 2019 slot). That’s supposed to be good because it is implied that a large and larger tally of plus signs strung together would be preferable to an alternate case where negatives show up.
This is demonstrably false. Furthermore, it takes very little work to produce the demonstration:
Compared to each and every modern business cycle case the latest one seriously, significantly, obviously underperforms every time. And not by a little, like Obama/Trump made it close but are losing on a technicality. The gap is enormous. Even though the current “win” streak is up to 112 months, and those prior cycles were punctuated by additional recessions, the earlier examples come out way, way ahead every single time.
The number of positive months is meaningless. What matters is the elevation gained when the economy is growing, not how many times it might fall back in between. Growth is not a succession of avoiding minus signs. There can be no more irrelevant measure of economic success.
I’ll even include the fifties when there were three pretty substantial recessions all taking place within ten years. That previous cycle still outperforms and it’s not even close.
Not only that, I’m measuring each recovery and therefore showing you the most charitable view of where things stand right now. Factoring the scale and size of the recession preceding each recovery when comparing these business cycles, the “recovery” following the Great “Recession” somehow it actually gets worse.
In fact, what you might begin to suspect is that it would have been so much better if there had been some additional recessions along the way in the 2010’s – because that would’ve meant actual growth in between them instead of the dead, lifeless but heavily smoothed “recovery” we actually have experienced.
The same lack of growth which gave us…President Donald Trump. And might add a President Bernie Sanders on top.
American’s infatuation with populism and socialism is no mystery. Everyone says the economy is booming but it actually isn’t, and it hasn’t for such a very long time people have largely forgotten what a boom looks like (it doesn’t look anything like this). Therefore, claims like these go unchallenged. Everyone just nods their angry heads and gets back to finding their way to overturn the whole “booming” system. For some reason.
Opinion surveys which quite frequently record record high satisfaction with today’s economy aren’t actually finding genuine satisfaction so much as popular opinion – set in large part by Presidential declarations. What those surveys are instead showing is that Americans, like Europeans and the Japanese before any of us, we are all becoming acclimated and normalized to a world where growth doesn’t exist.
Not real growth, anyway. “At least it isn’t worse” (jobs saved) is one hell of a nothing standard, in every way completely unlike true economic expansion.
The Fed has done its (real) job only too well. The greatest trick the puppet show ever produced was in convincing the world an actual boom can’t exist (R*); this is the best that can be done.
When the Presidents are fighting over what both agree is a boom, who’s to say it isn’t one? All the evidence, every last bit of it, that’s who.
Congrats to both parties, kudos to Bush-Obama-Trump. You’ve all underperformed FDR as well as Nixon-Ford-Carter. That’s the real f-ing boom.