Not what a real Recovery looks like!?!

It was one mean mother fracking recession that the last Republican administration left us with, not at all like the 11 more or less garden variety previous recessions that the United States experienced since the end of World War II. If you are old enough to vote you are old enough to remember at least one or two prior to the Great one that we are now slowly recovering from. Do you recall hearing the term “Global Panic” applied to any of those? Nope, use of that phase was previously reserved for descriptions of the Great Depression. When something that bad happens it takes a LONG time to dig out from under it. The Great Depression officially lasted over 3 ½ years, from August 1929 to March 1933 and the economy was so fragile coming out of it that we reentered a deep Recession in 1937 which required another year for us get out from under. It took U.S. involvement in World War II before Americans got to see anything that looked “like a real recovery.”

No one likes remembering their fear. Maybe that’s why Mitt Romney can’t seem to hold onto a picture of what the world plunged into in September of 2008. Perhaps excerpts from this piece, first published by Fortune in December 2008, might serve to remind him:

“(Fortune) -- The world changed forever on Sept. 15, 2008, the Monday Meltdown, a day that will live in the annals of finance alongside Black Tuesday, Oct. 29, 1929. We are still odds-on to avoid a depression like the one that followed Oct. 29, but the Monday Meltdown made one more likely, and has claimed trillions of dollars of wealth worldwide and triggered a global recession. Understanding the financial shock that occurred that day is vital to finding a way out of our current mess…” http://money.cnn.com/2008/12/15/news/economy/monday.meltdown.fortune/index.htm

Three months after that epic crash and sentences like “We are still odds-on to avoid a depression like the one that followed Oct. 29, but the Monday Meltdown made one more likely…” were still being made. One month before Barack Obama was sworn in as President of the United States, the possibility that the world might yet slide into another Great Depression was still being discussed as entirely plausible. Unemployment rates hit 26.7% in the U.S. during the 1930’s Great Depression (when women weren’t really considered as part of the permanent work force).

The author of that Fortune piece, Jeffrey D. Sachs, also wrote: “The Monday Meltdown turned a boom-and-bust cycle centered mainly in the U.S. and U.K. into a global financial panic.” Those are precisely the type of fear inducing words, “meltdown” and “global financial panic”, that Mitt Romney seems to have purged from his political memory banks. That is what Barack Obama was facing when he took the oath of office to become President of the United States in January of 2009.

Sachs concluded with this:

“Only the work of historians will tell us whether the Fed, White House, and Treasury might have saved the day through a softer landing for Lehman Brothers. The answer would seem to be yes--if the authorities had used the preceding months to put an emergency-response plan in place."

"Starting next month, President Obama must work to assuage panic, give a sense of direction, cooperate effectively with the rest of the world, and ensure the liquidity and fiscal stimulus to get the global economy out of the Critical Care Unit and onto a path of recovery.”

Obama did all that, though you wouldn’t know it from the credit he hasn’t gotten. Instead Mitt Romney has the gall to say “This is not what a real recovery looks like.” Under the Obama Administration the U.S. economy has now netted a small overall job gain, despite the fact that job losses were hemorrhaging at 800,000 per month when he first stepped into over the Oval Office, and despite substantial job cuts in the public sector. Under 8 years of President George W. Bush our economy barely added a million jobs, total. Since the U.S. economy bottomed out in February 2910 over 4 million new jobs have been created to date under President Obama.

You could argue that President Bush’s job creation numbers looked a lot better too before the Recession hit, and that’s true, but the Great Recession happened on Bush’s watch, not Obama’s. During President Obama’s first term in office private sector jobs have cumulatively grown on average .10% annually despite his having inherited the worst economic downturn since the 1930’s. Now compare that to George W. Bush’s second term when they grew at just .06%, or better yet compare that to Bush’s first term when private sector jobs actually shrank at a minus .21% rate (those job losses fortunately were offset by job gains in the public sector): http://www.nytimes.com/2012/09/15/business/low-jobs-numbers-for-obama-but-lower-for-his-predecessor.html?_r=1

President Obama turned the American economy around and, unlike under Bush, the private sector has grown, not retracted, during his first term in office. Unlike the United Kingdom, the United States avoided falling back into a double dip recession, even though the eurozone contracted again during the second quarter of 2012. Now look at these additional markers:

In July U.S. home prices rebounded to levels they were last at nine years ago: http://money.cnn.com/2012/09/25/real_estate/home-prices/index.html

In September the U.S. unemployment rate fell to its lowest level since Barack Obama took office: http://economywatch.nbcnews.com/_news/2012/10/05/14240541-unemployment-rate-falls-to-78-as-economy-creates-114000-jobs?lite
In October the Dow Jones Index hit its 5 year high: http://www.usatoday.com/story/money/markets/2012/10/05/sept-jobs-markets/1613559/

In October U.S. indebtedness shrunk to a six-year low relative to the size of the economy: http://www.bloomberg.com/news/2012-10-09/u-s-downgrade-seen-as-upgrade-as-u-s-debt-dissolved.html

Some might note that Barack Obama isn’t running for re-election against George W.Bush, he’s running against Mitt Romney. True, but Mitt Romney is running on the exact same standard Republican playbook; more tax cuts and deregulation. You remember deregulation, don’t you? If not let’s return to 2008 again, when top economists like Jeffrey D. Sachs were explaining how we got ourselves into such a mess in the first place:

“Deregulation abetted the massive over-extension of credit by enabling Wall Street to expand trillions of dollars of lending and tens of trillions of dollars of derivatives trading on a base of households with shaky creditworthiness. The seeds of trouble were sown.”

All of the above may be true, but why should any of that excuse President Obama’s failed promises? After all Barack Obama promised back in 2009 that the unemployment rate would drop below 6% by 2012. Yes he did say that then, and yes our recovery is slower than the President initially forecast. But it turns out that the recession itself was far worse than experts were characterizing it as when Obama actually made his recovery projections. That fact was revealed in revised figures documenting the actual GDP loss during the recession that were retroactively released by the U.S. Department of Commerce Bureau of Economic Analysis:

“The overall pattern of quarterly changes during the downturn was similar in both the revised and previously published estimates, though the revised estimates show larger decreases for 2008:Q4 (-8.9 percent compared with -6.8 percent) and for 2009:Q1 (-6.7 percent compared with -4.9 percent).”
http://www.bea.gov/faq/index.cfm?faq_id=1004

In other words, bad as we all knew the economy was back when Obama made that original forecast, none of us actually knew how bad it really was. That was one mean mother fracking recession that the last Republican administration left us with. I would like to see how Mitt Romney would manage a global crisis like that any better. Then again, maybe not.