Chart of the … year

posted at 11:36 am on December 7, 2010 by Ed Morrissey

Quite a few people have had the same reaction to this chart from Business Insider and Calculated Risk as John Derbyshire at The Corner, which is to offer a res ipsa loquitur rather than clutter it with commentary.  But there is more to be said about the ramifications of this chart:

But calling it the Chart of the Day seems too limiting.  I’d call this the Chart of the Year, for a couple of reasons.  It demonstrates the folly of the Obama administration’s insistence that we have been experiencing a recovery and any sort of significant growth in job creation.  After hitting the nadir of job losses relative to our peak inter-recession employment, we have essentially flatlined for far longer than any other post-recession period.  Nothing in the data shows a hint that we will soon break out of that pattern either, and Ben Bernanke says we’ll probably go four to five more years on this same trajectory.

In previous recessions, we had three essential tools to encourage recovery: monetary policy, tax policy, and regulatory policy.  The first has vanished; our monetary policy has become more loose than practically any other time, with Fed credit practically free at the moment and QE2 printing even more money.  The only way to encourage investment at this point is through tax and regulatory policy.  Unfortunately for us, the current administration has taken actively hostile positions against business in both areas, heaping regulatory additions onto threats to hike taxes and close loopholes, some of which allows American businesses to compete abroad while nominally remaining in the highest corporate-tax environment in the industrialized world. At the same time, the federal government plans to continue increasing spending and national debt, undermining the dollar and making the investment environment even less stable.

That’s the reason Bernanke feels compelled to move forward with QE2, even though monetary policy has all but been played out.  Nothing else is happening, and until we start using the other tools in the toolbox to recharge economic growth, it won’t happen for a very long time.


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If you mirror image that, it forms Obama’s “O” – coincidence?

lorien1973 on December 7, 2010 at 11:39 AM

Obama:
“We are headed in the right direction”

Baxter Greene on December 7, 2010 at 11:39 AM

“new normal”

WisCon on December 7, 2010 at 11:42 AM

“we’re not afraid of one guy with a computer that can make an excel graph or something…” Gibbs said…

oh wait, wrong thread….

ted c on December 7, 2010 at 11:44 AM

This isn’t the “getting the car out of the ditch” that Obi was speaking of…right?

Osis on December 7, 2010 at 11:45 AM

So because there are no options the Dems want to use (tax policy) they are going to resort to a policy we shouldn’t use (QE2)? These people are either crazy or are deliberately trying to destroy America!

CCRWM on December 7, 2010 at 11:46 AM

I think that’s because unemployment, in addition to the recession, is being impacted by the gargantuan increase in the federal minimum wage.

JohnJ on December 7, 2010 at 11:47 AM

reaction to this chart ….. is to offer a res ipsa loguitur rather than clutter it with commentary.

And to not really comment and let the chart speak for itself, too ….

Jerome Horwitz on December 7, 2010 at 11:48 AM

WisCon on December 7, 2010 at 11:42 AM

It might be. Think of it: our only major growth in the past fifteen years happened during two major asset bubbles. We’re long past the low Reagan tax rates. We may be stuck where we are for a long time. Just hope the bubble in China doesn’t burst.

TimTebowSavesAmerica on December 7, 2010 at 11:48 AM

The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation.

~Vladimir Lenin

Quantitative easing has one goal – hyperinflation.

All according to plan.

Rebar on December 7, 2010 at 11:49 AM

At one point or the other we have to ask ourselves whether this man, Obama, actually means well. He means to destroy this country and is actively pursuing that goal.

PierreLegrand on December 7, 2010 at 11:50 AM

Happy Days Are Here Again!

Joe Mama on December 7, 2010 at 11:50 AM

I love it how the libs complain and whine about the eeeeevil Regan recession and how o-so-terrible it was, and if you look at it on that chart, it’s hardly anything compared with Obama’s Great Leap Forward Downward.

Obama and Co. would KILL for Reagan’s recession at this point.

Good Lt on December 7, 2010 at 11:51 AM

The left side of that chart is like porn for progressives.

The Mega Independent on December 7, 2010 at 11:51 AM

This isn’t the “getting the car out of the ditch” that Obi was speaking of…right?

Osis on December 7, 2010 at 11:45 AM

thanks for reminding me. I’m outta slurpee too….

ted c on December 7, 2010 at 11:53 AM

Note that from the beginning of the decline, through it’s steepest drop, the Worst Congress and Worst President in History were solely concentrated on Hell Care and Cap’n Rape.

Both huge burdens on business, and job killing legislation.

Throw in the sharp increase in minimum wage as someone else mentioned, and there is no doubt this was by design.

cntrlfrk on December 7, 2010 at 11:54 AM

Just think how bad it would have been without the stimulus package. The thing speaks for itself, thank you President Obama.

Tommy_G on December 7, 2010 at 11:55 AM

I think that’s because unemployment, in addition to the recession, is being impacted by the gargantuan increase in the federal minimum wage.

JohnJ on December 7, 2010 at 11:47 AM

Well it was a shock to the system to raise it so fast, but that raise just caught it up to the true inflation rate.

Immigrants Employment has recovered in America and Chinas employment has recovered. We are not enforcing our laws on these two groups so they recover first.

PrezHussein on December 7, 2010 at 11:55 AM

I still remember arguing repeatedly with leftists in the lead up to the 2008 election that change does not necessarily mean for the better.

Well, looking at the above chart I guess I was objectively right.

Obama brought change indeed. He doubled down on everything that Bush was doing wrong, and changed almost everything Bush doing right.

18-1 on December 7, 2010 at 11:56 AM

Off topic

Just landed at Reagan national.

Saw representative Grayson.

Looked terrible. Disheveled, awnry

I Asked for a pic. He was gracious. Asked wheee I was from. I flipped the bird in the photo. Will post pic tonight on my blog.

blatantblue on December 7, 2010 at 11:57 AM

I told you, we didn’t spend enough.
– Krugman

angryed on December 7, 2010 at 11:58 AM

Actually, what does happen when/if the China bubble bursts? I’ve heard it may happen, but I’m wondering what that means for us (financially, not even considering military weirdness if they get desperate).

WitchDoctor on December 7, 2010 at 11:58 AM

OK, can we now officially start calling President Zero, President Sub-zero?

MikeA on December 7, 2010 at 11:59 AM

How about the “Chart of Three Years”?

forest on December 7, 2010 at 11:59 AM

Let’s see in previous recessions, the unemployed got 26 weeks of benefits. Today they have 150 weeks of benefits. So of course nobody is looking for a job. Why would you work when you can stay home, watch Oprah and get paid?

angryed on December 7, 2010 at 12:00 PM

What we need is a few Ivy League grads to fix this.

Oh wait…

booter on December 7, 2010 at 12:00 PM

Just hope the bubble in China doesn’t burst.

TimTebowSavesAmerica on December 7, 2010 at 11:48 AM

That is a fading dream.

Vashta.Nerada on December 7, 2010 at 12:00 PM

Doesn’t say much for status quo governance.

Speakup on December 7, 2010 at 12:03 PM

Just hope the bubble in China doesn’t burst.

TimTebowSavesAmerica on December 7, 2010 at 11:48 AM

It won’t. Some very smart people in DC have said so.

angryed on December 7, 2010 at 12:03 PM

I was hoping there was some good news to go along with the bad, but I’m not seeing it.

ornery_independent on December 7, 2010 at 12:07 PM

Why would you work when you can stay home, watch Oprah and get paid?

angryed on December 7, 2010 at 12:00 PM

Unemployment must be paying a lot nowadays to get people to watch Oprah.

WashJeff on December 7, 2010 at 12:08 PM

CR deserves a lot of credit, but we still think this chart is *the* chart of 2010!

At the very least, it directly led to one of the more significant discoveries in economics for the year…. (A tool for doing the related math is available here.)

ironman on December 7, 2010 at 12:10 PM

I Asked for a pic. He was gracious. Asked wheee I was from. I flipped the bird in the photo. Will post pic tonight on my blog.

blatantblue on December 7, 2010 at 11:57 AM

dude! ha! that’s awesome.

ted c on December 7, 2010 at 12:10 PM

One line missing; one from the Great Depression. It may be sadly relevant.

michaelo on December 7, 2010 at 12:15 PM

Meanwhile, having completed his ramp, Wile E. Coyote Super Genius readies his Acme QE2 Jet Pack.

Lily on December 7, 2010 at 12:27 PM

michaelo on December 7, 2010 at 12:15 PM

It looks a lot like the bottom red line, maybe a smidge better, surprisingly.

On graphs I have viewed which are available on the net one can see our current economy is not tracking the recession model AT ALL. I and many others have been saying it time after time. It’s a DEPRESSION.

But one has to stop listening to the propaganda from the ministry of “good facts” and instead go out and look at the real data.

Now at last bernanke confirms another thing I told you. Unemployment will remain high for at least five more years because of what ODumbAss and the clown posse have done.

If they started this very minute to take the correct action to fix it. Since they will continue to poison the private sector, it will most likely be ten years before we see improvement. IF EVER.

ODumbAss is determined to force his ideology down our throats. All I have to say to that is, yeah that ideology is working out real well for California, ain’t it?

Have you seen their unemployment?

dogsoldier on December 7, 2010 at 12:41 PM

blatantblue on December 7, 2010 at 11:57 AM

too funny

cmsinaz on December 7, 2010 at 12:41 PM

I’m a real pessimist. I don’t see a return to 5% unemployment anytime soon and in fact expect it to be 12 – 15% by the end of 2012. No data to back that up or informed financial knowledge to go with that just a gut feeling. Companies are struggling to make it and as long as they can do it with the current level of staffing there is no incentive to hire. Worker burnout will start being a factor soon and with 3 years of unemployment benefits out there for the taking I fear many more will be trying to leave the rat race and adjust their standard of living to live within their new economic reality, something the federal government will never grasp.

I hope I am wrong and the next booming sector is just waiting to bust out but I don’t see it and don’t give me this crap about green jobs being the future. At best it will remain a niche market and I just don’t know where the next boom will be.

Too much regulation, i.e.,offshore drilling ban, crushing regulations on most other private businesses along with the mandates and just a general demonization of anything associated with the word profit have put a cloud over the economic adventurers out there.

Just A Grunt on December 7, 2010 at 12:45 PM

Why would you work when you can stay home, watch Oprah and get paid?

angryed on December 7, 2010 at 12:00 PM

Unemployment must be paying a lot nowadays to get people to watch Oprah.

WashJeff on December 7, 2010 at 12:08 PM

Haha. Well done.

Mallard T. Drake on December 7, 2010 at 12:54 PM

Obama is either a stunning failure or a raging success. I’m not sure which is scarier at this point.

jnelchef on December 7, 2010 at 12:58 PM

Hurry! Print more money!

Akzed on December 7, 2010 at 1:01 PM

Unemployment must be paying a lot nowadays to get people to watch Oprah.

WashJeff on December 7, 2010 at 12:08 PM

I’m not sure I get that. Is she no longer cool among the masses? I kind of assumed she was still the queen. Wasn’t she one of the reasons for Obama’s success, constantly pimping his awesomeness on her show?

angryed on December 7, 2010 at 1:03 PM

One line missing; one from the Great Depression. It may be sadly relevant.

michaelo on December 7, 2010 at 12:15 PM

^ well, we’ve already had 20 months or so at the bottom of that trough, and Bernanke saying we’ll have four or five more years of it, sure does kind of sound like a depression…

das411 on December 7, 2010 at 1:16 PM

We should be thanking him.

tommer74 on December 7, 2010 at 1:17 PM

Hurry! Print more money!

Akzed on December 7, 2010 at 1:01 PM

Timmy’s signature broke the printing press!

Brat on December 7, 2010 at 1:26 PM

“They got me” to blame. Captain Chaos strikes again. Bwaaaaaaa Haaaaaaaaaaa Haaaaaaaaaaa.

“Now, lemme buy my shrimp guys and eat my waffle”.

dthorny on December 7, 2010 at 1:31 PM

Brat on December 7, 2010 at 1:26 PM

Hurry! Print some error-free money!

Akzed on December 7, 2010 at 1:56 PM

Akzed on December 7, 2010 at 1:56 PM

They are!

Meanwhile printers have begun reprinting the old $100 notes – without the high-tech security features and still bearing the signature of George W Bush’s treasury secretary, Hank Paulson – in order to prevent a cash flow crisis.With the holiday shopping season in full swing, authorities are scrambling to do everything they can to keep U.S. cash flowing.
‘There is something drastically wrong here,’ one source told CNBC. ‘The frustration level is off the charts.’

Brat on December 7, 2010 at 1:59 PM

where’s bayam, let’s discuss taxes and regulatiosn versus this graph.

joeindc44 on December 7, 2010 at 2:00 PM

oh crap, the right side of the current trend line is looking rather flat. not quite picking up like the bell curve shape would suggest.

This is the result of regulatory stiffling.

joeindc44 on December 7, 2010 at 2:02 PM

It won’t. Some very smart people in DC have said so.

angryed on December 7, 2010 at 12:03 PM

You mean the ones that are ALWAYS “unexpectedly” surprised at more bad economic news?

dominigan on December 7, 2010 at 2:16 PM

So far (I’m only 1/2 way through the book) Dinesh D’Souza is right.
Anti-colonialism.
BO is taking America with him on the ride to find his father.
This is absolutely vile & disgusting.

Badger40 on December 7, 2010 at 2:18 PM

Jerome Horwitz on December 7, 2010 at 11:48 AM

Ah!, but

Quantum materiae materietur marmota monax si marmota monax materiam possit materiari?

DSchoen on December 7, 2010 at 2:20 PM

“new normal”
WisCon on December 7, 2010 at 11:42 AM

Obama DID promises to end the Boom to Bust cycle.

Apr 25, 2010 … President Barack Obama promised an end to taxpayer-funded bailouts “once … revive the economy and “put an end to the cycles of boom and bust”.

Quid quid latine dictum sit, altum videtur

DSchoen on December 7, 2010 at 2:28 PM

I love it how the libs complain and whine about the eeeeevil Regan recession and how o-so-terrible it was, and if you look at it on that chart, it’s hardly anything compared with Obama’s Great Leap Forward Downward.

Obama and Co. would KILL for Reagan’s recession at this point.

Good Lt on December 7, 2010 at 11:51 AM

By this time in Reagan’s recession (1981, purple line), we were back at full employment.

The recession starting in 2001 was long, but not very deep, and Bush had to deal with the fallout from the 9/11 attacks and the Enron and WorldCom bankruptcies in 2002.

If the “bottom of the recession” was 11 months ago, that was January 2010. Obama’s inauguration was at month -12, and Porkulus was passed in month -11, when the vertical axis was at -3.2%. After nearly two years, we’re at -5.4%, for a net -2.2% job loss after Porkulus. Where are all those “saved or created” jobs?

One line missing; one from the Great Depression. It may be sadly relevant.

michaelo on December 7, 2010 at 12:15 PM

If it was on there, it would make Obama look good, but FDR look bad. Since Obiden likes to talk about how wonderfully FDR rallied the masses on TV when Hoover was President and TV didn’t exist, do they really want a reminder of the real FDR?

Steve Z on December 7, 2010 at 2:44 PM

OK, this business trip has lasted too long. Everything is starting to look like a breast.

Zaire67 on December 7, 2010 at 3:03 PM

The Four Legs of the Deflationary Stool:

1. Income decreasing, in aggregate. Less money chasing.
2. Credit shrinking. No income, no borrow.
3. Asset values declining. No equity against which to borrow.
4. Spikes in commodities to hold on to purchasing power. Increasing portion of paycheck goes to necessities, less money chasing discresionary items.

Set upon that stool is the fat ass of the federal government – borrower, lender and buyer of last resort. The ultimate To Big To Fail.

We’re in a deflationary depression. Increases in prices due to speculation, weak dollar and flight to safety is not inflation, it’s the reallotment of the paycheck into necessities. When we’re down to buying only necessities, due to the combination of lost income and “printed” money pushing up commodities, we’ll be staring down hyperinflation.

Once we’ve suffered a collapse in production, leaving most out of work, and the government is in the position to both directly and indirectly pump fresh cash into our hands to chase what little production is left in this country, we’ll know firsthand what hyperinflation is.

But first, the destruction of production through margin compression.

shuzilla on December 7, 2010 at 4:36 PM

Maybe if congress passes the tax stabilization bill it will help.

But the hand that gives also deepens the deficit by increasing entitlements. And taking money out of SS? What?

Stability has been a big problem though. I feel certain that it has to help for employers to know what bracket they are in.

The uncertainty of the healthcare system and how it effects businss has not gone away. Until that is sorted out how can businesses hire?

petunia on December 7, 2010 at 6:23 PM