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Greg Mankiw

Graph of the day: Monitoring the so-called “recovery”

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CW on July 8, 2012 at 10:16 PM

I’ve had liberals tell me that the recovery was going well until the tea party was elected in fall 2010. This graph destroys that argument.

Donald Draper on July 8, 2012 at 10:18 PM

I admire Mankiw and agree with the premise that the data supports (namely that Obama’s useless as a steward of the economy) but that graph (which seems to have been produced by the St. Louis Fed) uses a common “USA Today” type visual trick to create more drama in data. Specifically they picked a Y-axis that only covers the data in question, rather than either 0 – 100% or some other logical range that would show the movement in context.

Again, the economy sucks and Obama’s a disaster, but I don’t think anyone has to resort to graphical sleight of hand to show that.

SoRight on July 8, 2012 at 10:19 PM

Real Americans aren’t stupid. They know the president is trying his best

Uppereastside on July 6, 2012 at 1:13 PM

rogerb on July 8, 2012 at 10:28 PM

I admire Mankiw and agree with the premise that the data supports (namely that Obama’s useless as a steward of the economy) but that graph (which seems to have been produced by the St. Louis Fed) uses a common “USA Today” type visual trick to create more drama in data. Specifically they picked a Y-axis that only covers the data in question, rather than either 0 – 100% or some other logical range that would show the movement in context.

Again, the economy sucks and Obama’s a disaster, but I don’t think anyone has to resort to graphical sleight of hand to show that.

SoRight on July 8, 2012 at 10:19 PM

IMO a larger X axis would add more context.

commodore on July 8, 2012 at 10:35 PM

IMO a larger X axis would add more context.

commodore on July 8, 2012 at 10:35 PM

In case I wasn’t clear, that’s what I’m saying as well.

SoRight on July 8, 2012 at 10:38 PM

IMO a larger X axis would add more context.
commodore on July 8, 2012 at 10:35 PM

In case I wasn’t clear, that’s what I’m saying as well.

Apologies, just noticed you said X-Axis and I was referring to the Y. I agree, seeing a wider time range would be useful as well although the point is that there NO recovery to speak of.

SoRight on July 8, 2012 at 10:41 PM

Can you imagine how bad that will look when we double dip?

BKeyser on July 8, 2012 at 10:44 PM

Isn’t it great to know that “the private sector is doing fine”?

CJ on July 8, 2012 at 10:48 PM

Here is the EMRATIO (same data) going back to 1948

SoRight on July 8, 2012 at 10:50 PM

Can you imagine how bad that will look when we double dip?

BKeyser on July 8, 2012 at 10:44 PM

Obama: Did you say double dip? Mmmmmm…I love ice cream. (It reminds me of my Hawaiian boyhood when I gave freebies to my pals in the Choom Gang.)

onlineanalyst on July 8, 2012 at 11:04 PM

Here is the EMRATIO (same data) going back to 1948

SoRight on July 8, 2012 at 10:50 PM

Very illuminating, to know that we are in 1981 territory.

I’m even more determined now.

Difficultas_Est_Imperium on July 8, 2012 at 11:24 PM

Obama nation

“Hope ‘n Change – 2008

From diapers to Depends – 2012

Schadenfreude on July 8, 2012 at 11:46 PM

True unemployment rate

Schadenfreude on July 8, 2012 at 11:55 PM

Here is the EMRATIO (same data) going back to 1948

SoRight on July 8, 2012 at 10:50 PM

Dude! Where’s my recovery?

I think Mitt should put this graph up in every ad he runs from now until he’s elected.

Also please notice 1981, which is what a REAL recovery looks like.

UnderstandingisPower on July 9, 2012 at 12:06 AM

Greg Mankiw may be a professor of economics at Harvard University, which gives him credibility, but I happen to prefer the two graphs below:

—

http://polination.files.wordpress.com/2012/02/2002-2011-employment-correlated-with-party-control1.jpg

—

http://polination.files.wordpress.com/2012/07/2012-1995-tax-cuts-put-people-back-to-work.jpg

—

ITguy on July 9, 2012 at 12:34 AM

Here is the EMRATIO (same data) going back to 1948

SoRight on July 8, 2012 at 10:50 PM

Note how the Bush Tax Cuts were successful in turning a recession into a true recovery. Both employment and revenues went UP for multiple years after the 2nd part of the Bush Tax Cuts were signed in 2003.

Note, too, how TARP and the Obama “Stimulus” were unsuccessful in turning a recession into a true recovery.

ITguy on July 9, 2012 at 12:44 AM

So, to summarize, not one month of the Obama administration has been as good as the Bush administration, by this measure.

J.E. Dyer on July 9, 2012 at 12:46 AM

I admire Mankiw and agree with the premise that the data supports (namely that Obama’s useless as a steward of the economy) but that graph (which seems to have been produced by the St. Louis Fed) uses a common “USA Today” type visual trick to create more drama in data. Specifically they picked a Y-axis that only covers the data in question, rather than either 0 – 100% or some other logical range that would show the movement in context.
Again, the economy sucks and Obama’s a disaster, but I don’t think anyone has to resort to graphical sleight of hand to show that.
SoRight on July 8, 2012 at 10:19 PM

Beat me to it.

MeatHeadinCA on July 9, 2012 at 12:48 AM

So, to summarize, not one month of the Obama administration has been as good as the Bush administration, by this measure.

J.E. Dyer on July 9, 2012 at 12:46 AM

Correct.

Even after the Dot Com Bust and the 9/11 attacks, the lowest number from the days of George W. Bush and the Republican Congress was 62.0% in September 2003.

Then, the second half of the Bush Tax Cuts (passed in 2003) started to kick in, and both the Employment-Population ratio and Total Receipts (Revenues) from taxes went UP, EVERY SINGLE YEAR, until… the Democrats took control of both houses of Congress in January 2007.

The last month of the Republican House, Republican Senate, and Republican President was December 2006. The Employment-population ratio (for those age 16 years and over) was 63.4%.

Then, under majority-Democrat control, the recovery stalled, then crashed, and we have now gone 40 straight months (three years, four months) with the Employment-Population ratio at or below 59.9%..

That includes the last 34 straight months at or below 58.7%.

The Bush Tax Cuts brought real recovery.
The Democrats have brought nothing but misery.

The average employment-population ratio over the entire pResidency of Barack Obama (Jan 2009 – June 2012) has been 58.7%.

Democrats talk about “jobs created” under Obama since the low point, (giving Bush all the blame for job losses and Obama all the credit for job creation), but they will never talk about how the average Employment-Population Ratio over the entire 8 years of the Bush Presidency averaged 62.7%, while the average under the pResidency of Barack H. Obama has been a full 4 percentage points lower: 58.7%.

If the population aged 16 years and over is approximately 250 Million people, then each 1% represents about 2.5 Million jobs.

Those 4 percentage points equate to about 10 Million jobs.

The Obama administration would have to find a way to create 10 Million new jobs just to get back to the average level of employment under the Bush Presidency.

And if you want to get back to where things were when the Democrats took majority control in January 2007, we’d need about 12 Million new jobs. The Employment-Population Ratio was almost 5 points higher in December 2006 (63.4%) than it is now (58.6%), and that difference, (4.8%), times the approximate number of jobs per 1% (2.5 Million jobs per 1%) = 12 million jobs!

Democrats drove us into the ditch when they took over majority control in 2007, drove us deeper into the ditch when they gained absolute control in 2009, and we’ve stayed in the ditch ever since.

To get out of the ditch, we need “REVERSE”, not “FORWARD”.

ITguy on July 9, 2012 at 1:04 AM

The Employment-Population ratio in the last month with a Republican House, Senate, and President (Dec 2006) was 63.4%.

Democrats have held majority control (2+ out of 3) of the House, Senate, and Presidency for the last 5.5 years (66 months)…

———–

In the first 33 months of Dem control (Jan 2007 – Sept 2009), the Employment-Population ratio dropped from 63.4% to 58.7%.

In the last 33 months of Dem control (Oct 2009 – June 2012), the Employment-Population ratio has never been above 58.7%.

ITguy on July 9, 2012 at 1:14 AM

I admire Mankiw and agree with the premise that the data supports (namely that Obama’s useless as a steward of the economy) but that graph (which seems to have been produced by the St. Louis Fed) uses a common “USA Today” type visual trick to create more drama in data.

SoRight

Are a fan of Pigou taxes as well? Mankiw is.

http://en.wikipedia.org/wiki/Pigovian_tax
“A Pigovian tax is a tax levied on a market activity that generates negative externalities. The tax is intended to correct the market outcome. In the presence of negative externalities, the social cost of a market activity is not covered by the private cost of the activity. In such a case, the market outcome is not efficient and may lead to over-consumption of the product.”

Mankiw is a smart man but a statist.

chimney sweep on July 9, 2012 at 2:27 AM

If the population aged 16 years and over is approximately 250 Million people, then each 1% represents about 2.5 Million jobs.

Those 4 percentage points equate to about 10 Million jobs.

Great point. Thank you for that. People already know that something just isn’t right, but this makes a fuzzy oncept solid. Now, how does Romney put this out there and make it stick in people’s minds? You know with certainty the MSM won’t do it.

Extrafishy on July 9, 2012 at 6:22 AM

No one on either side of he asile wants to talk about it much, but the economy took a nosedive when Obama won the 2008 PRIMARY. Just the potential that he might become president was enough to cause people with money to start hiding it.

MikeA on July 9, 2012 at 7:59 AM

Take away government employees from those percentages and tell me where we’re at? We’re screwed is where we’re at.

lowandslow on July 9, 2012 at 8:27 AM

ITguy on July 9, 2012 at 12:34 AM

Thanks, I just shared the empl/party data on my Facebook page with the following summary…

One of the better charts–employment data correlated with party in control…remember this Hispanics (11% unempl rate) and Blacks (14% u.e. rate) and women (15.5% u.e. rate), all who gave Obama the majority of your votes in ’08…the Pres. whose latest mesg. is “I really tried hard”….

hillsoftx on July 9, 2012 at 8:51 AM

That graph is basically the unemployment rate if you adjusted for the declining labor force participation rate. We are much worse off than when Obama took office.

Wigglesworth on July 9, 2012 at 9:23 AM