Why Obama Will 'Own' the Recession

Y'all

I generally see it as "ya'll," which would contract "ya" and "all," though I think it would more properly be "y'all," which would contract "you" and "all."

Lance of TX @ Jan 09, 2009 11:24:19 AM

Natural economic cycle

There is something called a "business cycle", and there are longer term, but much less understood, economic cycles as well. One could argue that the debt boom that has gone bust started in 1982 and has ran for 25 years. Others plausibly argue that we are near the end of a 300 year credit boom which started with the UK's first printing of fiat currency and European-style central reserve banking. Also, about 300 years ago the current world order based on nation-states began, and that too may be nearing an end. Obama's choices may be constrained by forces that no one understands and are out of anyone's control. But if we have a massive inflation two years from now, Obama will "own" it for sure, in a political sense.

Andrew P of VA @ Jan 09, 2009 08:01:23 AM

THE NEW DEAL

GDP grew and unemployment declined from 1933-1940. The New Deal worked!

http://tinyurl.com/8293wq

Steve J. of AZ @ Jan 09, 2009 04:40:35 AM

Administrations ranked by average annual rate of job growth:

1. Johnson 3.9%

2. Carter 3.1%

3. Truman 3.0%

4. Kennedy/Johnson 2.6%

5. Clinton 2.4%

6. Nixon 2.2%

7. Reagan 2.1%

8. Nixon/Ford 1.6%

9. Eisenhower 0.7%

10. HW Bush 0.6%

11. W Bush 0.3% (Probably lower after the last two months of data comes out)

Administrations ranked by average annual rate of increase in male median full time earnings:

1. Truman 3.4% (estimated)

2. Nixon 3.1%

3. Johnson 2.51%

4. Kennedy/Johnson 2.47%

5. Eisenhower 0.5% (estimated)

6. Clinton 0.3%

7. Reagan 0.085%

8. W Bush 0.083% (Through 2007. Probably lower when we see the 2008 data.)

9. Carter 0.0%

10. Nixon/Ford -0.4%

11. HW Bush -0.7%

The source for the job growth data is the BLS. The source for the median earnings data since 1960 is here (page 46):

http://www.census.gov/prod/2008pubs/p60-235.pdf

Median earnings growth for years prior to 1960 was crudely estimated from the following:

http://www.rand.org/publications/classics/wohlstetter/R578/R578.chap3.html

Administrations ranked by average annual real GDP growth:

1. Johnson 5.1%

2. Truman 4.9%

3. Kennedy/Johnson 4.6%

4. Clinton 3.7%

5. Reagan 3.4%

6. Carter 3.3%

7. Nixon 3.0%

8. Eisenhower 2.9%

9. Nixon/Ford 2.6%

10. W Bush 2.3% (Through 2007. Probably lower after we see the final 2008 data.)

11. HW Bush 2.1%

The source of this data is the BEA.

Numerous people have pointed out that the relative economic performance of presidents based on party affiliation favors the Democrats. The best general book on the subject that I have come across so far is "Unequal Democracy" by Professor Larry Bartels of Princeton University. He shows that not only does inequality fall during Democratic presidencies but that income growth is greater for all people regardless of income levels under Democratic presidencies (the upshot is that policies that minimize inequality also help the wealthiest). His book also goes into the the public policies that may have led to these differences in economic performance. Here is a link to a New York Times article on his book:

http://www.nytimes.com/2008/08/31/business/31view.html?_r=2&scp=1&sq=alanblinder&st=cse&oref=slogin

Mark A. Sadowski of DE @ Jan 09, 2009 01:21:35 AM

DEMOCRATS ALREADY OWN THE RECESSION

It was Democrats in Congress who are largely responsible for the current economic problems. The Democrats were anti-energy anti-business and eager to screw with Bush's tax cuts. They also defended fannie and insisted on jerking mortgages around and throwing money around ... end result: businesses in a panic, oil shock,

Throw in Paulson and the bailout and you have a prescription for economic crisis.

As mentioned, many companies have gone "John Galt" on Obamanomics and are hunkering down in expectation of higher taxes, bad regulations and worse.

The real problem that makes Obama 'own' this is that he is about to enact a terrible plan that will socialize the country, ramp up spending by HUGE amounts but do ABSOLUTELY NO GOOD FOR THE ECONOMY.

Just watch. 2010 the unemployment will be higher then than now. Why? No new jobs. Same problem with FDR's New Deal. Govt spending doesnt and NEVER HAS created private sector jobs.

If you want that you need to go the Reagan route and CUT TAX RATES.

Travis Monitor of TX @ Jan 09, 2009 01:10:16 AM

Ah, thoughtful and informed debate

Bill Lowe of OK (Jan 08, 2009 08:52:45):

You went to the trouble of writing 9 paragraphs.

Your very first sentence was enough to get me (and many others, I'll wager) to stop reading.

While I appreciate your saving me some time, don't you have any regrets about wasting yours?

Graham @ Jan 09, 2009 00:29:37 AM

It's never the Ideology Stupid!

Reading Petho's constant ideological banter is both inaccurate and plain lazy...It's as if there's only one "answer" to any financial problem: "cut taxes and govt spending"...The only interesting point from Obama's speech today, was when he called this current clusterf*** a "self made problem"..Part of the reason that our financial crisis grew unchecked is because the "Financial Media" is too interested in spinning ideology rather than looking at the circumstances as they exist..If Petho is half the "expert" that he presents himself to be, he'll note the GIGANTIC factor that were not present in the Ghosts of Recessions Past: The Credit Crisis! The credit crisis is a confidence-crisis which feeds into the recession. This creates a continous "loop" that makes this different than the "normal cycle" of recession...There's no CONFIDENCE because investors don't TRUST the "free market"..Government is intervening with a series of good steps and bad steps, in order to try to jumpstart CONFIDENCE which will spur growth...Maybe the author can put down the free-market-cures-all koolaid for a minute and observe the problem as it exists..In other words: This is NOT like 1981!...Even Greenspan noted that he never thought that the unchecked, free-market model would fail. He gave the mea culpa because he see's the facts as they exist..Of course, he's not vested in continuing the propaganda like this author is...Petho's more interested in the coverup and in shifting the blame to Obama, congress and/or "minorities and poor people".

TruthHurts of PA @ Jan 08, 2009 23:57:34 PM

Why do Republicans have so many recessions start on their watch?

The official dates of recessions are set by the NBER and are available here:

http://www.nber.org/cycles/

Bush has had two recessions start on his watch. Clinton had none. Bush's father had one. Reagan had one. Carter had one. Nixon had two. Johnson had none. Kennedy had none. Eisenhower had three! See a pattern here? With the exception of Carter, Republicans are always the ones who break the economy, and then Democrats are the ones who have to clean up the mess.

Mark A. Sadowski of DE @ Jan 08, 2009 23:10:39 PM