Wednesday, July 07, 2004

Paul Krugman: What Boom?

Paul Krugman tries some fancy dodges but still lets out that the economy is doing well.

If you want a single number that tells the story, it's the percentage of adults who have jobs. When Mr. Bush took office, that number stood at 64.4. By last August it had fallen to 62.2 percent. In June, the number was 62.3.

Nobody measures unemployment that way. Never have. The measure of unemployment is the percentage of adults looking for work, who can't find it. Stay-at-home parents aren't counted. Retirees cruising the Gulf Coast in RVs aren't counted. Krugman's measure includes both sets.
BUT, even accepting his flawed benchmark, during the recession the figure was only 2.2% worse than during the boom.

After two and a half years of slow growth, real G.D.P. surged in the third quarter of 2003, growing at an annual rate of more than 8 percent. But that surge appears to have been another blip. In the first quarter of 2004, growth was down to 3.9 percent, only slightly above the Clinton-era average.

Of course, the awesome surge doesn't hold. The Fed wouldn't allow it to hold, for one thing. But it does signify a corner has been turned, and Paul Krugman Ph.D. is well aware of its historical context.

Clinton lied: the worst recession since the Great Depression wasn't Bush the Elder's 1991 slump, it happened in 1982 when the economy shrank by 2%. In 1983 we had 1 quarter of 8% growth, that dropped by half over the year. But it marked an end to recession and the start of a seven-year boom.

Clearly history is repeating itself. Notice that Bush's failed policies have dragged us down to the point that we're beating Clinton's average quarterly performance.

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