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Discussion: (7 comments)

  1. Jon Murphy

    I read Reinhart & Rogoff’s article this morning, too. Even I, who argue the recovery is better than some statistics suggest, think they were a bit off.

    The definition of what a recession and expansion is does matter. For example, my firm uses US Industrial Production as a proxy (US Industrial Production tends to move in sync with GDP, and it is reported monthly as opposed to quarterly. This gives us an idea of how the economy looks usually 6 months to a year before the GDP numbers are reported, revised, and revised again). By USIP standards, this is a fairly normal recovery.

    Anyway, I felt that Reinhart & Rogoff (two economists I respect), left me with more questions than they answered.

    So, it does matter what statistic we use to measure “the economy.” But it is also important to remember that these are just proxies. The economy is not really something that can be measured, per se. There is no “it” at all. The economy is some 330 million individuals working with one another. It is possible to only approximate all this activity. Every method we have has major flaws: GDP punishes international trade and only counts finished, new products (used goods and charity do not count). US Industrial Production only counts manufacturing, mining, and utility output; it does not capture consumer activity. Consumer activity excludes manufacturing.

    Statistics are just an approximation. Nothing more. It is far too easy to become seduced by stats. The important thing here is to keep a clear head and remember what is probably the biggest threat to human intellect: the appearance of knowledge.

  2. Thomas Sullivan

    Perhaps this “recovery” is typically bad and slow, and not unusual. But are there other factors causing weakness? Economic suppression by government is slowing growth, at least in the eyes of employers:
    1. Energy development restrictions, mostly from EPA, reducing drilling on federal land. Increasing cost of oil and electricity, outlawing new coal power plants.
    2. Promises of higher taxes
    3. Large new costs per employee by Obamacare
    4. Large increases in regulators, large volume of new regulations.
    5. Heavy restrictions on bank lending, high costs of complying with Dodd-Frank. Advantages for big banks.
    6. Vilification of the prosperous (employers). Class warfare and division. Redistribution. The private sector is doing fine. You didn’t build that.

    Without these added impediments growth and jobs would be much better.

  3. Arnold Ziffel
  4. MacDaddyWatch

    Obama is delivering 2.2% recovery GDP growth and has created ZERO jobs since he took office. The same number of people who were employed 4 years ago is the very same number who are employed today–4 years later. By definition, that’s ZERO new jobs.

    In the comparable Reagan recovery, the then president delivered 5.7% recovery growth and millions of jobs.

    Bottom line…the incompetent Oval Office simpleton needs to be shltcaned.

    1. Jon Murphy

      One minor nit to pick, MacDaddy:

      I think you mean to say that there has been Zero net new jobs created. Jobs are created and destroyed all the time (it’s a healthy aspect of the economy). However, in a growing economy, the number of net jobs created usually exceeds the number destroyed.

  5. R Richard Schweitzer

    You may have good reason to accept the NEBR calculation of “recovery.” (consistency??)

    But, actually, that calaculation is tied to the concept of GDP (which has that crucial element of government spending in the bowels of its sums)

    Looked at another way, the private economy, has been bled, tyhere has been a series of transfusions whereby the fiscal state of the governments (pl) have been bled

    If one takes the over-all conditions in the aggregate (as NEBR does GDP) there is no “recovery” in the aggregate. In fact, a case can be made that the “Fisc” has descended more than the private has leveled out. And-

    Proposals are afoot to come and get from the private as much blood as possible to revive the “Fisc.”

  6. Steven Hales

    “their the folks who make the “official” recession/recovering calls” Should be “they’re”

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