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The Slow Agony of the Obama Recovery The Slow Agony of the Obama Recovery

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Economy

Economy

The Slow Agony of the Obama Recovery

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President Barack Obama(Official White House Photo by Pete Souza)

Under President Obama, America is experiencing one of its weakest recoveries from recession in the modern statistical era. This is the indisputable conclusion from the past three years of job-creation and economic-expansion data, reinforced by Friday’s Commerce Department estimate that gross domestic product grew by just 1.5 percent in the second quarter of this year.

This is why surrogates for presumptive Republican presidential nominee Mitt Romney hammered Obama over the GDP number on Friday morning. Rep. Paul Ryan, R-Wisc., said the figures were the “the latest sign of a failed economic agenda.” Glenn Hubbard, the dean of Columbia University’s business school and Romney’s top economic adviser, called the statistics “very disappointing for the future of the economy.”

 

How disappointing is this recovery, by historical standards? If you look at postrecession job growth under every president who inherited a recession at the start of his term or within his first year in office, stretching back to Franklin Roosevelt, you’ll only find one president who did worse.

George W. Bush.

Following the brief recession that began and ending in 2001, Bush presided over an economy that grew at a 2.6 percent clip over the next three years. Hubbard, incidentally, was one of Bush’s chief economists at the time. That growth tops the 2.2 percent average growth under Obama in the three years since the Great Recession officially ended in June 2009. But compared with other modern presidents who battled early term recessions, both rates are anemic.

 

Check out this comparison of GDP growth under Presidents Roosevelt, Nixon, Reagan, Bush, and Obama in the first three years after the end of the recessions they each inherited:

Now check out the comparison on the numbers that matter most for American workers: the rate of net job growth. Here’s a month-by-month job chart of those presidents’ performances (excluding Roosevelt; monthly jobs data-collection didn’t start until the end of the 1930s), again in the three years after the National Bureau of Economic Research -- a private-sector arbiter of business cycles -- declared their inherited recessions to be over:

 

Here’s a scatter plot of the total three-year, postrecession job growth under all those presidents, Roosevelt included:

One thing to note about those figures: Private-sector job growth is a full percentage point higher under Obama than net job growth overall; that means that state, local, and federal government layoffs – shrinking government employment – has been a drag on his job growth. Bush got a small boost in net job creation from government hiring.

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Put another way, private-sector job growth has been 3.5 times higher under Obama than under Bush in the first three years after their respective recessions ended.

Democrats often argue, with some merit, that Obama was dealt a very different recession than Bush, Reagan or Nixon – a financial crisis of a magnitude unseen in America since the Great Depression. That makes Roosevelt the best comparison. And while the data are not entirely comparable – again, the government wasn’t tracking monthly jobs figures or quarterly GDP under FDR – the contrast is clearly unflattering for Obama.

Check out FDR’s job and GDP growth rates, roughly from the trough of the Great Depression:

It’s pretty easy to see where these comparisons point us, politically. Obama wants to cast himself as the next FDR; Republicans want to chain him to his own record (and spent part of this week criticizing him for not being Bill Clinton on the economy). Romney is promising his policies would bring Reaganesque results; Democrats will try to paint Romney as the second coming of the second Bush.

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