Has the worst recovery ever left 6.5 million jobs on the table?

posted at 3:21 pm on May 30, 2012 by Ed Morrissey

So argues John Merline at Investors Business Daily, who analyzed the trajectories of post-WWII recoveries to gauge where job growth should have taken the American economy.  Merline prepared this argument in response to claims made by Barack Obama on the campaign trail about creating more than 4 million jobs in the past two years, a convenient starting point for Obama that we’ve noted in the past.  It’s actually just under 4 million in the private sector since May 2010 (3.829 million), which averages out to about 160,000 a month.  That would barely be enough to keep up with contemporaneous population growth, even if one disregards the 742,000 jobs lost in the ten months between the start of the recovery and the Obama jobs reference point, jobs that were lost in the first 14 months after signing the $800 billion stimulus package.

Obama’s claims are weak tea in the first place, but Merline goes farther in dismantling them by comparing the results to the normal recovery trajectory:

Employment: By this point, the average job growth in the past 10 recoveries was 6.9%. Under Obama, jobs have grown by just 1.9%, according to data from the Minneapolis Federal Reserve.

Had the current recovery kept pace with just the average recovery over the past 60 years, there would be 6.5 million more people with jobs today, and the unemployment rate would be below 7%, instead of above 8%. That assumes several million more Americans would have joined the workforce. If the current anemic labor force were unchanged, those 6.5 million jobs would drive unemployment to 4%.

GDP growth: The Obama recovery has also performed far worse than average when it comes to GDP growth. After 11 quarters, the economy is still only 6.8% bigger than it was when the recession ended. In contrast, GDP was 16% bigger, on average, by this point in the previous 10 recoveries, the Minneapolis Fed data show.

The current recovery is so slow, in fact, that it just barely beats GDP growth 11 quarters after the 1980 recession ended — even though there was the intervening long and painful 1981-82 recession. And unless GDP shoots up in Q2, the current recovery will soon be the absolute worst since the Great Depression.

Had the Obama recovery tracked the average GDP growth in the 10 previous recoveries, the economy would be almost $1.2 trillion bigger today.

Perhaps this has a direct relationship to another pattern noted by IBD in its editorial today:

To really get a sense of how dismal Obama’s confidence ratings have been, you need to compare them to those during the Reagan recovery (for a visual display, see chart).

The 1981-82 recession lasted almost as long as the last one — 16 months vs. 18 months — and pushed unemployment higher. Yet confidence roared back as Reagan’s economic policies powered a strong and sustained recovery, with the index topping 100 most months.

What reason do people have to feel confident today?

Almost three years into the recovery, unemployment is still above 8%, household incomes are down more than 5%, gasoline prices remain at historic highs, and the economy can only eke out meager gains.

On top of this, we learned this week that housing prices are back at their mid-2002 levels. So, naturally, Obama’s again making excuses and shifting blame.

On that last point, I have to rise in partial defense of the Obama administration.  Housing prices needed to return to rational valuations.  The core of the financial collapse that preceded the recession was the decoupling of rate of increase in home values from normal inflation, and the 2002-3 valuations probably represent a rational price level for today.  In fact, the big problem in this case was the Obama administration’s interventions to prevent the rational revaluations, which comprised a series of temporary and expensive subsidies that did nothing except steal demand from future quarters.  We would have already found the bottom and started to lift up from it by now had Obama and his team not interfered with the market forces that provide those rational valuations.

Otherwise, though, IBD gives a spot-on analysis, and provide this telling comparison on consumer confidence:

Clearly, this recovery has been badly bungled, and a great deal of pain caused by the outcome of Obama’s blundering.  That makes Mitt Romney as the alternative look a lot more attractive, of course, but Reason’s Nick Gillespie wonders whether Republicans have learned a lesson from the results of Obama’s predecessor:

And of course the Republicans will counter with: See, none of this would have happened if we’d only followed George W. Bush’s disastrous big-government spending ways and expansion of major entitlements and a defense buildup because sharia law is taking over whole hamlets in Oklahoma and our plan to increase annual spending over the next decade by just $1 trillion is so much better than the Prez’s to spend $2 trillion more, especially after increasing federal outlays by 60 percent or more over the previous decade when we controlled things is exactly the tonic the economy needs right now! But seriously folks, what do you expect when you let gay marriage happen? No economy can recover from that!

Exit questions: Do you think the weak recovery primarily stems from the severity of the recession that ended in 2009 or the government’s attempts to ameliorate the recession? Does it worry you more that Obama might be re-elected alongside a GOP Congress (both House and Senate) or that Romney (who supported TARP, auto bailouts, and stimulus) will be elected with a GOP Congress?

At this point, almost anything in the direction of free market principles would provide significant improvement.  Nick’s got a point, though, on the outcomes we can expect from a return to big-government conservatism.  We need strong discipline and a will to fundamentally change the direction of federal spending, and that won’t come now without a significant amount of pain.  Will the GOP deliver that kind of discipline?  At this point, with the economy in semi-permanent stagnation, it’s time to test them on it.


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Huh, that’s unexpected.

Akzed on May 30, 2012 at 3:25 PM

Scratching my head and wondering where all the liberal trolls have disappeared to.

Where is that spirited defense of this president?

hawkdriver on May 30, 2012 at 3:26 PM

But gun sales are skyrocketing…that’s good news right???…

PatriotRider on May 30, 2012 at 3:27 PM

We need strong discipline and a will to fundamentally change the direction of federal spending, and that won’t come now without a significant amount of pain. Will the GOP deliver that kind of discipline?

Does the Pope %!#@$ in the woods?

Lost in Jersey on May 30, 2012 at 3:28 PM

Clearly, this recovery has been badly bungled, and a great deal of pain caused by the outcome of Obama’s blundering.

Or deliberate destruction. Congress needs to work together NOW. Harry Reid needs to stop being an obstructionist.

dogsoldier on May 30, 2012 at 3:34 PM

How can the Reagan-Obama graph be accurate? Obama acts like they were twin brothers or something.

hillsoftx on May 30, 2012 at 3:35 PM

On that last point, I have to rise in partial defense of the Obama administration. Housing prices needed to return to rational valuations.

Housing prices are far from rational valuations. According to several sites such as ZeroHedge; there is still a huge number of properties owned by banks that are being kept off the market to purposefully inflate prices.

We are in another bubble as prices are being kept artificially high. Expect another large drop in home prices.

E L Frederick (Sniper One) on May 30, 2012 at 3:37 PM

…the MSM REFUSES to give the American public the true picture of unemployment and the economy!
I hold them (institutional media), as reponsible for the economic suffering in this country, as I do our government!

KOOLAID2 on May 30, 2012 at 3:39 PM

hillsoftx on May 30, 2012 at 3:35 PM

I love that graph. I could stare at it without the metrics. Something beautiful and simple and straightforward about it.

Axe on May 30, 2012 at 3:41 PM

Comparing today’s economic climate to the 1980′s does not make much sense, since the conditions are fundamentally different. Interest rates were double digits at the start of Reagan’s presidency, and then were cut dramatically early on; currently, interest rates have been low for going on 4 years, and will stay so for at least another 2 years. Reagan cut personal tax rates from high levels (top marginal rate of 70% in 1980), but the personal tax rates today are not nearly as high as they were at the start of 1981. Also, the price of oil pretty much collapsed in the 1980s – highly unlikely to occur now with developing economies keeping demand up. And let’s not forget that debt-financed government spending took off in the 80s – today the politicians are talking about reducing the debt, not increasing it. Finally, it is highly unlikely anyone on Wall Street would have cared about a slowdown in China’s GDP growth or Italian bond yields in the 1980s, but these factors drive the markets today. In short, we are in uncharted territory now, and there is no reason to think that the economic programs that worked 30 years ago will be as effective today. Simply put, this is not going to be nearly that easy.

TouchdownBuddha on May 30, 2012 at 3:42 PM

Make an easy-to-understand ad out of this information and virtually anyone could beat Obama in the election.

The Rogue Tomato on May 30, 2012 at 3:43 PM

Exit questions: Do you think the weak recovery primarily stems from the severity of the recession that ended in 2009 or the government’s attempts to ameliorate the recession?

Niether. it was the nature of the recession. The economy was humming before the crash based on a lot of people using their houses as ATMs and banking on ever-increasing home prices, which was not sustainable. The fall in homw prices caused people to (a) feel poorer, which caused them to spend less, and (b) removes a source of credit for new businee startups, large purchases, and home improvements which tend to help job creation. A huge number of jobs were lost in hosuing construction and related industries and retail, and those jobs have not come back because housing is still in the dumper.

The Obama Administration exacerbated the recession and delayed the recovery by throwing too much money at trying to artifically prop up home prices and stop foreclosures, which delayed the natural clearing of the market that is ultimately going to have to happen before it can come back and start producing wealth and jobs again. Everything else is just background noise.

Does it worry you more that Obama might be re-elected alongside a GOP Congress (both House and Senate) or that Romney (who supported TARP, auto bailouts, and stimulus) will be elected with a GOP Congress?

I hope for a GOP Congress with either man as President. I would surely prefer Romney because he will produce a federal budget and stick to it, and produce a coherent corporate tax policy which should help GDP growth pick up substantially. I don’t care that Romney supprted TARP and some form of of fiscal stimulus; a Republican Congress will never pass anything like those bills again.

rockmom on May 30, 2012 at 3:44 PM

We need strong discipline and a will to fundamentally change the direction of federal spending, and that won’t come now without a significant amount of pain. Will the GOP deliver that kind of discipline? At this point, with the economy in semi-permanent stagnation, it’s time to test them on it.

You know, there was this guy… had a plan to cut a trillion dollars in spending, in the first year.

It’s a good place to start negotiations from.

JohnGalt23 on May 30, 2012 at 3:46 PM

1.9% its that high?

ldbgcoleman on May 30, 2012 at 3:48 PM

Where is that spirited defense of this president?

After seeing that response from the senate dems on Obama’s “to do” list they are probably wandering aimlessly. IOW no deviation from their normal routine.

DanMan on May 30, 2012 at 3:49 PM

Think of all the jobs being saved by ignoring congressional subpoenas…

Akzed on May 30, 2012 at 3:49 PM

Scratching my head and wondering where all the liberal trolls have disappeared to.

Where is that spirited defense of this president?

hawkdriver on May 30, 2012 at 3:26 PM

Maybe bayam will jump in and scream Booooooooooooooosh!

gwelf on May 30, 2012 at 3:54 PM

How can the Reagan-Obama graph be accurate? Obama acts like they were twin brothers or something.

hillsoftx on May 30, 2012 at 3:35 PM

Actually there’s no comparison to the 1980′s recession which occurred near the height of American economic power. The 2008 financial crisis and asset bubble collapse is only comparable to other once in a lifetime financial events, such as the Great Depression. In prior recessions the country wasn’t grappling with a scenario where the average middle class family had lost about 35% of its net worth.

Of course Ed knows better and realizes that the outcome has been far worse than the Great Depression. But it drives pages views and gets the carnival barkers worked up.

bayam on May 30, 2012 at 3:59 PM

I dunno, that graph sure does look racist!

ICanSeeNovFromMyHouse on May 30, 2012 at 4:02 PM

But it drives pages views and gets the carnival barkers worked up.

bayam on May 30, 2012 at 3:59 PM

There are no bigger carnivals and circuses than you and your Pimp of all the carnivals, Obama.

Schadenfreude on May 30, 2012 at 4:03 PM

The 2008 financial crisis and asset bubble collapse is only comparable to other once in a lifetime financial events…

bayam on May 30, 2012 at 3:59 PM

I always love when this get’s brought up…

… because it gives me another chance to post the cuase:

“When these missing data were factored in, it became clear that the rejection rates were based on legitimate business decisions, not racism.”

Seven Percent Solution on May 30, 2012 at 4:10 PM

Scratching my head and wondering where all the liberal trolls have disappeared to.

Where is that spirited defense of this president?

hawkdriver on May 30, 2012 at 3:26 PM

They’re all at a wake for Kagan.

slickwillie2001 on May 30, 2012 at 4:25 PM

“When these missing data were factored in, it became clear that the rejection rates were based on legitimate business decisions, not racism.”

Seven Percent Solution on May 30, 2012 at 4:10 PM

You truly have a child-like understanding of the financial system. Many books have been written on this subject and extensive analysis of the past decade’s lending activity, so there’s no excuse to live in the dark and parrot talking points put out by bankers and their apologists. Not even conservative mortgage industry executives blame the government for the failure of US lenders.

a more recent source:
it was fraud by the big banks – more than anything done by the little guy – which caused the financial crisis

as extensively documented by a wealth of credible sources:
http://www.ritholtz.com/blog/2011/12/fbi-estimates-80-of-mortgage-fraud-involved-industry-insiders/

bayam on May 30, 2012 at 4:27 PM

Meanwhile, master golfer and campaigner extroardinaire continues his pivot to JOBS, JOBS, JOBS.\ What a sorry, lame excuse for a POTUS!

Bob in VA on May 30, 2012 at 4:28 PM

The 2008 financial crisis and asset bubble collapse is only comparable to other once in a lifetime financial events, such as the Great Depression.

How convenient, that everyone is so eager to compare Obama’s performance to that of Booooooooosh, except when it becomes plain how bad their performance really is, when magically it becomes utterly incomparable to anything else ever conceived in our lifetimes.

In prior recessions the country wasn’t grappling with a scenario where the average middle class family had lost about 35% of its net worth.

That’s because the country wasn’t grappling with federal collusion with the banking industry to artificially inflate homeownership and driving the credit industry to a point where the middle class family would not be able to bear that kind of loss, being indebted for considerably more than 35% of their net worth.

By the way, your link verifies the problem that conservatives have decried for the past four years now: that the government is complicit in the fraud, and giving them billions of dollars in bailout money instead of punishing the people who by all accounts seem to have broken the law. It also factually demonstrates other assertions made by conservatives: including the complicity of Freddie and Fannie, and the fact that the government was not ENFORCING the regulations it had IN PLACE.

I repeat: conservatives wanted defrauders to suffer the consequences of their actions, federal statists insisted the solution was for the government to give them a blank check. And your own links support everything they were saying about the myriad causes of the crisis.

The Schaef on May 30, 2012 at 4:43 PM

We would be enjoying a much better recovery right now if Obama had simply done nothing. Instead, his socialistic policies had the expected effect.

blink on May 30, 2012 at 4:36 PM

What’s your model for a better recovery, the UK? I’m not parroting but actually don’t see a better path than stimulus and Fed action (which by the way hasn’t even weakened the dollar).

Or are you questioning the projected effects on GDP of the stimulus as measured by the CBO and Wall Street economists? Or are you just filing another general complaint?

bayam on May 30, 2012 at 4:44 PM

Actually there’s no comparison to the 1980′s recession which occurred near the height of American economic power. The 2008 financial crisis and asset bubble collapse is only comparable to other once in a lifetime financial events, such as the Great Depression. In prior recessions the country wasn’t grappling with a scenario where the average middle class family had lost about 35% of its net worth.

Of course Ed knows better and realizes that the outcome has been far worse than the Great Depression. But it drives pages views and gets the carnival barkers worked up.

bayam on May 30, 2012 at 3:59 PM

Yes, yes. Of course, this is different and can’t be compared to anything else and thus Obama can’t be held accountable for anything and he and liberal ideas are actually, despite appearances, huge successes. I have books written by liberals that say so.

Monkeytoe on May 30, 2012 at 4:46 PM

What’s your model for a better recovery, the UK? I’m not parroting but actually don’t see a better path than stimulus and Fed action (which by the way hasn’t even weakened the dollar).

Or are you questioning the projected effects on GDP of the stimulus as measured by the CBO and Wall Street economists? Or are you just filing another general complaint?

bayam on May 30, 2012 at 4:44 PM

Stimulus did not work and has never worked in the past. Most historians and economists today even admit that FDR’s spending prolonged the great depression, much the same way that Obama’s policies have deepened and prolonged the current economic problems.

Cut spending, reform entitlements, keep taxes low and stop bailing out anyone. Let businesses fail. there is no such thing as too big to fail. All we are doing is screwing up the market and making things worse.

Monkeytoe on May 30, 2012 at 4:49 PM

By the way, your link verifies the problem that conservatives have decried for the past four years now: that the government is complicit in the fraud, and giving them billions of dollars in bailout money instead of punishing the people who by all accounts seem to have broken the law. It also factually demonstrates other assertions made by conservatives: including the complicity of Freddie and Fannie

I think a broad array of people from varying political beliefs agree on this point, even those on the far left and the far right. It’s a testament to the political power of big banks that their influence of Congress remains so strong.

the fact that the government was not ENFORCING the regulations it had IN PLACE.

From the perspective of liar loans, you’re right. But there are still many other ways that banks can and have engaged in unbridled greed that’s completely detached from their responsibility to consider risk when managing of federally insured deposits. Even a libertarian like Greenspan now agrees that regulations were far from adequate to address the systemic excesses in the financial markets that nearly ended capitalism as we know it.

bayam on May 30, 2012 at 4:51 PM

By the way, your link verifies the problem that conservatives have decried for the past four years now: that the government is complicit in the fraud, and giving them billions of dollars in bailout money instead of punishing the people who by all accounts seem to have broken the law. It also factually demonstrates other assertions made by conservatives: including the complicity of Freddie and Fannie, and the fact that the government was not ENFORCING the regulations it had IN PLACE.

I repeat: conservatives wanted defrauders to suffer the consequences of their actions, federal statists insisted the solution was for the government to give them a blank check. And your own links support everything they were saying about the myriad causes of the crisis.

The Schaef on May 30, 2012 at 4:43 PM

In all fairness, there were republicans complicit in all of this – such as Bush’s big push to try and get more people to own their own homes. And republicans, when they had the chance, really did little regarding Fannie and Freddie.

However, it proves that gov’t shouldn’t be involved in these things distorting the marketplace wildly and creating the bubbles. It proves the conservative point that the gov’t should not be involved and should not be so big and have their fingers in so many pies.

Monkeytoe on May 30, 2012 at 4:52 PM

But there are still many other ways that banks can and have engaged in unbridled greed that’s completely detached from their responsibility to consider risk when managing of federally insured deposits. Even a libertarian like Greenspan now agrees that regulations were far from adequate to address the systemic excesses in the financial markets that nearly ended capitalism as we know it.

bayam on May 30, 2012 at 4:51 PM

Not all regulation is bad, but the regulation that was passed was bad. there can be some reasonable regulation, but we never seem to get anything reasonable.

I love the term “unbridled greed” – such a lefty strawman. Ohhh, you’re greedy. You are just evil and terrible. Let’s not forget who spent most of their time protecting this system – Barney Frank and the dems. So, if you want to talk about unbridled greed, clean your own house first.

Monkeytoe on May 30, 2012 at 4:55 PM

I’m having a hard time buying any analysis of the effectiveness of non-existent regulations in the face of non-enforcement of the existing regulations. Non-enforcement denies us a benchmark for an “effectiveness gap” to assign to other regulations.

There is always a lot of chest-thumping about “there oughta be a law” in the wake of these crises, and true to Rahm Emmanuel’s credo, they don’t let that crisis go to waste. After Columbine, they promote trigger-lock laws, as though a trigger lock makes the difference between success and failure for Klebold and Harris. After Enron, they pass Sarbanes-Oxley, without regard for the fact that Ken Lay was convicted for his role under laws already under the books, and the new law would not have prevented that original fraud, but in the meantime makes it much more difficult for companies to go public, stifling business for all the wrong reasons.

It’s a testament to the political power of big banks that their influence of Congress remains so strong.

The point you’re missing, though, is that it’s not the conservatives promoting this level of collusion. They are pushing for separation.

The Schaef on May 30, 2012 at 4:57 PM

C’mon everyone, the answer is simple.

Obama and liberals can’t be blamed because of something or other.

The answer is to spend more and raise taxes.

And more regulation.

And then profit!

Monkeytoe on May 30, 2012 at 4:57 PM

In all fairness, there were republicans complicit in all of this – such as Bush’s big push to try and get more people to own their own homes. And republicans, when they had the chance, really did little regarding Fannie and Freddie.

Monkeytoe on May 30, 2012 at 4:52 PM

Yes, but this is why I was very specific about saying “conservatives” and not “Republicans”. The Bush/Paulson role in the bailouts does not conform to any tenet of conservatism that I am aware of. In fact, it was fiscal conservatives in Congress that fought this whitewashing effort, and even defeated TARP its first time through the House. People are so eager to do anything to look like they’re doing anything, that the people who are denounced are the ones saying the wrong solution to the right problem is still wrong. See also: Obamacare.

The Schaef on May 30, 2012 at 5:00 PM

Yah, that chart shows a slight recovery – but that’s all going to tank in September, particularly around Army bases. The fort where I work just got hit with a $100 million cut, the course where I work at is going to take a 66% cut in personnel as of September. Anybody that remains is looking at roughly a 20% pay cut. Other organizations aren’t going to get hit quite that bad, but the cuts are going to be severe and the salary cuts are across the bord (mainly because the big contractors cover the majority of the operations).

With across the board cuts in jobs, obviously people will be scrambling to try to find work – a lot of them will head back to the combat zones if they can…meaning that people won’t be buying or renting. The restaurants are going to have significantly less traffic and a lot of them will close. Basically, it’s going to be the death of a town. I can’t speak to any other bases, but anybody else involved in training is going to take a hit.

John_G on May 30, 2012 at 5:00 PM

Most historians and economists today even admit that FDR’s spending prolonged the great depression

You’ve seen enough references on Hotair to a single right-leaning book on the depression that you actually believe this?

Try reading Bernanke’s book on the Great Depression- as both a Republican and widely recognized expert on the 1930′s, you’ll be surprised by his conclusions.

bayam on May 30, 2012 at 5:02 PM

The Schaef on May 30, 2012 at 4:57 PM

This is because liberals believe they can regulate human behavior through laws. That if they just pass the right laws, human nature itself will change and we will live in utopia. That is why, despite your citations to laws already on the books successfully used to prosecute violators and/or regulation unenforced, the liberal mindset believes that passing another law will really change things this time w/o any thought to other consequences of the new law.

To a large degree, when considering a new law, it’s not about whether it is practical or makes sense, it is about making them feel like they accomplished something.

Monkeytoe on May 30, 2012 at 5:04 PM

Try reading Bernanke’s book on the Great Depression- as both a Republican and widely recognized expert on the 1930′s, you’ll be surprised by his conclusions.

bayam on May 30, 2012 at 5:02 PM

I’ve read enough about it to know it is true. Do you still cling to the belief that it was stimulus spending that brought America out of the great depression? Very, very few people still believe that nonsense.

Of course, being a true believer, your mind will never change. You will always believe that taxing, spending, and more gov’t can solve everything.

Monkeytoe on May 30, 2012 at 5:06 PM

I’ve read enough about it to know it is true. Do you still cling to the belief that it was stimulus spending that brought America out of the great depression? Very, very few people still believe that nonsense.

Of course, being a true believer, your mind will never change. You will always believe that taxing, spending, and more gov’t can solve everything.

Monkeytoe on May 30, 2012 at 5:06 PM

Of course, the problem liberals have is that they don’t actually listen to Keynes even as they worship him. Even if Keynesian stimulus actually worked, you would have to follow his advice during non recessionary times and cut spending and save money. Liberals never, ever, ever, want anything to do with that.

So, you don’t subscribe to even the limited rationality that is Keynesian economics. Instead, you simply always say tax and spend, tax and spend.

Monkeytoe on May 30, 2012 at 5:10 PM

Republicans shouldn’t have been worried about being labeled as racists for daring to suggest that there was a problem with Fannie and Freddie.

blink on May 30, 2012 at 5:10 PM

I think it is deeper than that. I think Fannie/Freddie are great patronage places where supporters, donors, past colleagues can be appointed to / hired at and make a huge amount of money and I think Republicans take advantage of it – perhaps not as obviously or to the extent of dems – but nonetheless, I think they do and don’t want that dirty laundry aired any more than dems do and also don’t want their patronage spigot shut off.

But, that is the problem with huge, over-reaching gov’t.

Monkeytoe on May 30, 2012 at 5:13 PM

Try reading Bernanke’s book on the Great Depression- as both a Republican and widely recognized expert on the 1930′s, you’ll be surprised by his conclusions.

bayam on May 30, 2012 at 5:02 PM

I’ve read enough about it to know it is true.

You obviously haven’t read his book and you keep falling back to trying to discredit ideas by labeling them ‘liberal’ as opposed to clearly stating the merits of your position, which is highly ideological.

You’re a joke. I would LOVE to discuss macroeconomic and fiscal policies with you all day.

Why don’t you deconstruct Bernanke’s book for us- I’m sure you’ll absolutely humiliate him with your knowledge of how modern economies have responded to recessions over the past several decades, and how various policies have fared.

bayam on May 30, 2012 at 5:18 PM

Maybe bayam will jump in and scream Booooooooooooooosh!

gwelf on May 30, 2012 at 3:54 PM

You truly have a child-like understanding of the financial system.

bayam on May 30, 2012 at 4:27 PM

lol

Del Dolemonte on May 30, 2012 at 5:21 PM

O’bama truly has a child-like understanding of the financial system.

credible sources = sources I believe.

bayam on May 30, 2012 at 4:27 PM

Fixed.

Del Dolemonte on May 30, 2012 at 5:22 PM

as extensively documented by a wealth of credible sources:

http://www.ritholtz.com/blog/2011/12/fbi-estimates-80-of-mortgage-fraud-involved-industry-insiders/

bayam on May 30, 2012 at 4:27 PM

Gee, Skippy, I went to your Think-Tank link, and they only quote a single person in there:

William K. Black – professor of economics and law, and the senior regulator during the S & L crisis

Since when does 1 economics professor = “a wealth of credible sources”?

Del Dolemonte on May 30, 2012 at 5:26 PM

This is rather easy – yes the GOP was complicit in the housing bubble because they got caught up promoting home ownership without regard to reality. The govt created the crisis with fannie and freddie and then after GWB finally did get religion democratic congressmen stopped any attempts at rolling it all back – mostly because the mortgage originators were getting rich and bribed the likes of Frank and Dodd to derail it – yes I said bribe, there is a reason Dodd never ran again.

We are making this way too difficult.

Reagan dealt with a high tax rates and stupid monetary policy. He had a few triggers that were obvious to pull – he pulled them and fueled over a decade of economic prosperity.

Today the issue os the govt’s over reaching into managing the market. Freddie and Fannie are still there and still dangerously overleveraged, Sarbanes didn’t exist back then, there wasn’t Frank-Dodd, new consumer protection, PPACA, the EPA wasn’t trying to regulate Carbon and therefore affordable energy out of existance.

What we need at the moment is to stop the upcoming tax increases and then roll back all those things I just mentioned. Freddie and Fannie need to go away as does Sallie. Half of the EPA needs to be eliminated and all its managers and above replaced. The PPACA has no enduring parts – it needs to go – including guarentee issue and age 26 coverage. Sarbanes, Dodd Frank and consumer protection needs to go away – completely. Green energy supports need to disappear and we need to drill baby drill everywhere.

The problem is businesses are not going to hire with all the regulation in place. The marginal return for each new employee is probably negative far too often thanks to all the regulation. Why hire when you don’t know what the total cost of doing business is.

I figure taxes need to go down – but in tandem with gutting the tax code. You know why Buffet gives Obama cover on taxing the rich – because quietly the Dims put in loopholes to protect his wealth in different ways. When Buffet drops his fight against a billion in back taxes I’ll listen. Until then he is a crook.

Get the govt out – it doesn’t work – we are watching before our very eyes the European experiment about to explode. Quietly we are also beginning to see the blow up of China, whose command economy cannot survive much longer.

Zomcon JEM on May 30, 2012 at 5:28 PM

. And republicans, when they had the chance, really did little regarding Fannie and Freddie.

Monkeytoe on May 30, 2012 at 4:52 PM

They tried.

And were rebuffed at every turn by the Democrats.

Del Dolemonte on May 30, 2012 at 5:33 PM

economics professor = “a wealth of credible sources”?

Del Dolemonte on May 30, 2012 at 5:26 PM

Great, it’s Del the stalker. You can review his sources, including the FBI, and a number of independent analyses that reach the same conclusion. It’s not that difficult given Google.

bayam on May 30, 2012 at 5:37 PM

You obviously haven’t read his book and you keep falling back to trying to discredit ideas by labeling them ‘liberal’ as opposed to clearly stating the merits of your position, which is highly ideological.

You’re a joke. I would LOVE to discuss macroeconomic and fiscal policies with you all day.

Why don’t you deconstruct Bernanke’s book for us- I’m sure you’ll absolutely humiliate him with your knowledge of how modern economies have responded to recessions over the past several decades, and how various policies have fared.

bayam on May 30, 2012 at 5:18 PM

\

I love your typical citation to authority. Look – Bernanke’s book. therefore I am right. Do you want me to compile a list of books/articles that dispute it? Is that it? Explain how the gov’t spending money it borrows on b.s. like Solyndra expands the economy? It doesn’t. Explain how spending millions to prop up public sector union employees and their pensions expands the economy? it doesn’t. gov’t spending does not, and cannot grow the economy because gov’t do not create wealth. they merely transfer wealth. So, taking $1 from joe and giving it to frank does not expand (i.e., grow) and economy out of recession. That is impossible. You cannot “grow” something merely by moving it from point a to point b. That is all gov’t spending is. Moving the money from one person to another. That can never grow the economy and thus cannot end a recession or depression. At best, it might lesson the pain during a recession by borrowing against future tax revenues. Unfortunately, we don’t have that luxury b/c of the debt we already have.

Now, one can argue that gov’t spending may be able to keep some people employed during a recession (which again, does nothing to end a recession, it only protects those people) by spending. Or, you could argue that gov’t spending employs the unemployed during a recession. Now, Obama’s stimulus did some of keeping people employed – almost exclusively public sector (state and local) union employees. Which was not very useful and all it did was push state spending problems down the road. Obama’s stimulus did not hire any unemployed b/c outside of giveaways to public sector unions, no money actually went to any jobs that were not already funded (i.e., infrastructure, highway, etc). Instead, most of the leftover money (after the union cut) went straight in the toilet to liberal fantasies like Solyndra. So, again, even assuming that gov’t spending could have worked, Obama – the idiot he is – did it incompetently and his stimulus would never work even under Keynesian principals.

You are the true ideologue here – you never found a gov’t program, a tax, or any gov’t spending you don’t support. It doesn’t take any intellect to simply spout the liberal position day in and day out. You haven’t presented any arguments here except to claim “this recession is different, wah, wah, wah, so don’t hold Obama accountable”.

Give it a rest. You aren’t nearly as smart as you think you are and you certainly have no independence of thought. Every word you type is cliche liberal memes. It’s not as if you are bringing any kind of intelligent thought of your own to bear – you simply repeat liberal cliches. “Stimulus is what is needed”. The banks are peopled by the those with “unfettered greed.”

On other threads you engage in typical liberal name-calling, calling conservatives racist, etc. You are not some smart, intellectual, independent thinker proving us wrong. You are a troll who merely posts cliches you pick up from other liberals elsewhere. That’s it. You don’t have some great grasp of economic theory that proves us wrong – you have an average grasp of economic theory of someone who took an economics course in college.

Monkeytoe on May 30, 2012 at 5:41 PM

Absolutely. I’m actually a Keynesian in the pure sense. I believe that government spending during lean years can be good fiscal policy as long as: 1) like you say, the deficit spending is compensated for in good years; and 2) the spending is rationally expected to provide a robust economic multiplier. Frisbee parks shouldn’t rationally be expected to provide much of a multiplier at all.

Additionally, I’m a believer in expanding the money supply during lean years as long as the supply is contracted (or flattened) during good years. But such contraction is currently impossible given the out-of-control deficit spending. The market realizes this which has constrained the economic growth despite robust expansion.

blink on May 30, 2012 at 5:21 PM

I agree. I would actually have no real problem with Keynesian economics if, as you say, it was actually practiced – not just the spending part. But, again, as you say, the “stimulus” that Obama pursued was just pay-off to supporters (unions) and then liberal fantasy spending (a la Solyndra) and was not even remotely Keynesian.

I don’t even think we can truly spend the way it would actually do some good these days – way too much regulation – environmental, labor, zoning. the idea that we could say – “hey, we need to put some people to work, let’s build a huge dam” could never happen in today’s world. a true stimulus project would be spending on building infrastructure that will be valuable to us for years, such that the stimulus money is not simply wasted on stupid short-term programs such that society gets no actual value out of it.

But you can’t do it. If a recession starts today, you can’t be building a new highway 6 months from now. To build a new highway takes 10 years of planning, studies, environmental review, etc. So you can’t dump money into those things. Any upcoming projects of that sort were funded 10 years ago before the recession began.

So we are left funding nonsense that does nothing good for employment or the economy as a whole.

Monkeytoe on May 30, 2012 at 5:47 PM

They tried.

And were rebuffed at every turn by the Democrats.

Del Dolemonte on May 30, 2012 at 5:33 PM

I know some republicans tried. But, at the time, they controlled congress. So they did not try very hard.

Monkeytoe on May 30, 2012 at 5:49 PM

The banks are peopled by the those with “unfettered greed.”

You drew that conclusion, I never said it. As an ex-banker, I don’t even agree with that premise. Once again, you make broad conclusions based on your need to oversimplify.

Explain how the gov’t spending money it borrows on b.s. like Solyndra expands the economy?

The government has invested heavily in R&D over the years, including very successful endeavors. No one said that Solyndra is a model.
Let’s see how SpaceX expands the economy as its commercial orders from foreign nations and companies continues to grow.

Explain how spending millions to prop up public sector union employees and their pensions expands the economy?

I didn’t know that anyone expected it to expand the economy. It was intended to prevent the economy from falling off the cliff and avoid another depression.

You don’t have some great grasp of economic theory that proves us wrong – you have an average grasp of economic theory of someone who took an economics course in college.

Given that you’ve mischaracterized too many basic facts to even address, I’m absolutely shocked with this finale… another ad hominem attack without any real substance behind it.

bayam on May 30, 2012 at 5:53 PM

Obama’s again making excuses and shifting blame.

Business as usual!

GarandFan on May 30, 2012 at 6:10 PM

Typo in the title:

“Has the worst recovery ever left 6.5 million jobs on the table?”

Correction:

“Has the worst recovery President ever left 6.5 million jobs on the table?”

Apologies – the management.

sdbatboy on May 30, 2012 at 6:11 PM

It was intended to…

And intentions are all that matter to you, right?

Results are what matter- the US didn’t fall into another Great Depression.

bayam on May 30, 2012 at 6:16 PM

economics professor = “a wealth of credible sources”?

Del Dolemonte on May 30, 2012 at 5:26 PM

Great, it’s Del the stalker. You can review his sources, including the FBI, and a number of independent analyses that reach the same conclusion. It’s not that difficult given Google.

bayam on May 30, 2012 at 5:37 PM

Bwahahahahaha! Since when is asking you a simple question “stalking”?

Answer: When I also include in my question the (correct) fact that you cite a specific link, and then also use the words “a wealth of credible sources”. Then when the link is opened, only 1 individual is quoted by name.

As for the FBI, it’s absolutely hilarious to see a Leftist cite them as “credible” on anything. Were they also “credible” when they bugged MLK’s phone, or when their crime lab botched samples in the late 1990s?

And were they “credible” when they lied for 6 years about what really happened in the Branch Davidian compound with tear gas canisters?

And was former FBI Agent Robert Hanssen also “credible”?

Look, Dear. You were the one who went thru the trouble to find the link you posted, and then cited that link as proof of a “wealth of credible sources.” But you can’t be bothered to back it up when asked?

Now, on to another simple question.

After the S & L crisis, Congress “responded” by putting in additional layers of government regulation to make sure such a thing never happened again.

How come those increased regulations never worked?

And before answering, remember that I’ve worked in the mortgage sector since 10 years before the S & L stuff hit the fan. So I will instantly call you on any Lies you try to pass off as “credible”.

F-

Del Dolemonte on May 30, 2012 at 6:53 PM

They tried.

And were rebuffed at every turn by the Democrats.

Del Dolemonte on May 30, 2012 at 5:33 PM

I know some republicans tried. But, at the time, they controlled congress. So they did not try very hard.

Monkeytoe on May 30, 2012 at 5:49 PM

They controlled Congress, but not the Banking Committees.

Kinda hard to vote on reform when people like Chris “Waitress Sandwich” Dodd and Barney “Kiss Me, I’m Wearing a Hoodie” Frank won’t even let such proposals get a vote in the first place.

Del Dolemonte on May 30, 2012 at 6:57 PM

As an ex-banker

bayam on May 30, 2012 at 5:53 PM

All the banks you worked for Failed, no doubt. That’s why you’re an ex-banker.

Del Dolemonte on May 30, 2012 at 6:58 PM

Same topic covered, but excellent DMB song

For Those That Married Hope & Change, Grace Is Gone…But, Look On The Bright-Side Recovery Summer #4 Is Right Around The Corner

http://predicthistunpredictpast.blogspot.com/2012/05/for-those-that-married-hope-change.html

M2RB: DMB

Resist We Much on May 30, 2012 at 10:22 PM

Del Dolemonte on May 30, 2012 at 6:58 PM

Or maybe she finally got a job that was better than being a teller and loan originator.

blink on May 30, 2012 at 7:13 PM

After the S & L thing they added additional layers of regulations, many of which never worked. Just do a Google search on what was done after both episodes.

Del Dolemonte on May 30, 2012 at 11:04 PM

Chart of the Day: Illinois Democrats Were Soooo Certain They Were Right And Scott Walker Was Wrong

http://predicthistunpredictpast.blogspot.com/2012/05/chart-of-day-illinois-democrats-were.html

M2RB: Ronnie James Dio

Resist We Much on May 31, 2012 at 11:30 AM

At least SOMEBODY is fact-checking the LIAR-In-Chief. Bet you don’t see ANY of it on nitwhit television!?!

Colatteral Damage on May 31, 2012 at 6:12 PM