Obama's Recovery A Flop Of Historical Proportions

[Geee]

Investors Business Daily:

As President Obama prepares to deliver yet another speech about stimulating the economy — this one to a joint-session of Congress (with or without the NFL game on the monitors) — it's worth reviewing the results of his efforts to date.

It has now been a little over two years — and eight full economic quarters — since the end of the recession Obama inherited. It's time to ask: How does his record of economic growth in the wake of a recession stack up against the records of other presidents?

The National Bureau of Economic Research (NBER) defines a recession as "a period between a peak and a trough" during which "a significant decline in economic activity spreads across the economy and can last from a few months to more than a year."

By consensus, the most recent recession ended in June 2009, less than six months after Obama took office.

According to the NBER, in the 60 years prior to Obama's tenure, we had 10 recessions. In the two years following those respective recessions, average real (inflation-adjusted) quarterly GDP growth was 5%, according to federal government figures. In the two years of Obama's "recovery," average real quarterly GDP growth has been just 2.4%, less than half of the historical norm coming out of a recession.

What's the difference (in more practical terms) between 2.4% and 5% growth over two years? According to Obama's own budget, this year's GDP will be about $15 trillion. (It's running neck and neck with the national debt.) A 2.6% shortfall, therefore, equals about $780 billion over two years.

If you divide that evenly among the U.S. population of 312 million people, that works out to a shortfall of $2,500 per person — or $10,000 for the average family of four. Call it the Obama penalty.

Some might argue that the anemic post-recession growth rate under Obama has resulted from his having inherited a worse recession than most. There's little doubt that he inherited a particularly long (18-month) and significant recession. But the historical record suggests that, pre-Obama, the general rule was: the worse the recession (or depression), the better the recovery.

In other words, one would have expected such a severe downturn to be followed by a particularly strong stretch of economic growth. That, of course, hasn't happened.