Jul 29, 2016 10:39 am ET
Even seven years after the recession ended, the current stretch of economic gains has yielded less growth than much shorter business cycles.
In terms of average annual growth, the pace of this expansion has been by far the weakest of any since 1949. (And for which we have quarterly data.) The economy has grown at a 2.1% annual rate since the U.S. recovery began in mid-2009, according to gross-domestic-product data the Commerce Department released Friday.
The prior expansion, from 2001 through 2007, was the only other business cycle of the past 11 when the economy didn’t grow at least 3% a year, on average.
Total growth this expansion ranks just 8th of the past 11 cycles. The U.S. economy, at the end of June, was 15.5% larger than it was when the recession ended in 2009.
The current expansion remains smaller than the one during Richard Nixon s administration. And that 16% expansion lasted just three years. The economy grew 18% from 2001 through 2007. It grew 52% from 1961 through 1969.
Despite the current expansion s lack of intensity—or perhaps because of it —it is now one of the longest.
There have only been three longer expansions in the past seven decades.
So far, it has occurred entirely during Barack Obama s time in the Oval Office. making it the longest expansion under a single president. The growth streak would need to extend just a little more than halfway through the next president’s term to achieve a modern record.
The average economic expansion since 1949 has lasted just more than five years. Only the expansion during the 1990s made it 10 years.
The cost of capitalizing on opportunity is so much greater now than ever in the history of the republic. This makes any effort to start or expand a business that can generate wealth and jobs insurmountable except at great cost and attendant risk. The government makes these obstacles – set in train by FDR’s power grab and types like Obama magnify them to absurd levels. That is our problem.
Recoveries in the aftermath of asset bubbles are fundamentally different animals. You can’t really compare them to Fed-induced recessions to quell inflation (which has described most post WWII recessions).
This is why the Fed has been consistently wrong on the upside when forecasting GDP growth.
Completely wrong Brent. More purposeful deception spread by the intellectual undead like Austin Ghoulsbee.
The American economy has gone through all sorts of asset bubbles. Always recovered stunningly rapidly.
Our economy has always been more flexible and entrepreneurial than other countries. Therefore we have always grown faster over the long term.
Obama imposed failed European statism and crony capitalist absurd global warming cult. With lawlessness and abuse of bureaucratic agency. Actually politically weaponing the IRS.
Delusional policy agenda and lawless will kill the economy every time. Actually, has both under FDR and Obama.
It’s far worse than the official numbers. Business investment is terrible and business confidence is poor. This is attributable to regulatory uncertainty, failure to enact tax reform, pervasive government hostility toward business, weak demand, congressional gridlock, the unhealthy reliance on the Fed to stimulate growth by issuing an unsustainable amount of debt, decaying infrastructure, and the failure to restructure our economy to deal with the effects of globalization.
Is either party capable of getting past slogans, platitudes, vicious attacks on the other and throwing social issues into the mix to generate votes in order to be effective? Flip a coin, or pick your single most important issue and you’ll be with a majority of the voters.
Two trillion expansion of the Fed balance sheet – debasing the currency
$5 trillion record borrowing
Manipulated interest rates and curve.
Obama/Clinton claim weakest economic expansion on record a top notch achievement. After a level of monetary and fiscal stimulus no economist would have even thought possible eight years ago.
The stronger the recession, history forecasts a much stronger recovery.
Epic failure. Plus Hilly is the most corrupt and treasonous candidate ever run.
What the heck has gone wrong with the ‘press’ and American common sense?
Putting $10 trillion on the National Debt on top of the secret zero percent $16 trillion to the banks to the difference and hinds who weak the economy is while rigging the results. Because I borrow $26 trillion of money from thin air is not monies we made as a country.
We got this credit card that had this limit and all we can do is pay the interest without any plan to pay the trillion we owe, yet next year a new President will ask for more money to keep the doors open to the Government! Crazy is doing the same thing but expecting a different result!
Unfortunately, the weekend print edition only showed the first graph, which is misleading at best. The 4.4% annualized growth during the brief 12 month “recovery” of July 1980 to July 1981 was preceded by a 6-month recession and followed by a 16-month recession.
The second graph rightly combines both the length of expansion and the rate of growth to show total GDP gains from trough to peak. So far, the current expansion is up 14.7%.
The two strongest expansions were associated with deep cuts in tax rates — a 43% real GDP gain from JFK’s 30% cut in tax rates in 1964-65, a 33% gain from Reagan’s 23% cut in tax rates in 1983-84 (and tax reform 1988-90), and a 39% gain from Clinton’s 29% cut in the capital gains tax in 1997.
This time, by contrast, the highest tax rates salaries, Sub-S corporations and capital gains were increased in 2013. Hillary Clinton would be wise to consider returning to the less-punitive tax rates of her husband’s stronger second term.
Also agree with the claim about tax cuts with the proviso that in each of the two instances cited, it was not just marginal tax rates but business incentives to invest that really helped spark business expansion. In the 1981 Economic Recovery Tax Act, the Investment Tax Credit of 10% coupled with Accelerated Cost Recovery System radically transformed investment ROIs, making capital expansion far more lucrative at the margin for business to invest.
Similar to Kipling’s times in Britain, we have a new sort of “White Man’s Burden” that today in America appears to have been replaced with a sort of left wing “White Heterosexual Man’s Global Redistributionist Burden.” Just as the altruistic motives drove British imperialist goals, the “New World Order” seeks to drain the American middle class of its wealth of decent jobs and redistribute national wealth through policies like immigration; legal or otherwise. The “wealthiest one percent” who can afford $35,000 a plate Obama campaign dinners are getting wealthier by taking care of the still growing 47% who cannot or will not find work.