5 Myths About President Obama Economic Recovery

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Investors Business Daily:

Over the past several months, President Obama has spent much time pleading for patience on the sluggish economy and ongoing high unemployment, arguing that the economic hole was so deep and the crisis so monumental that a slow recovery — now in its 30th month — was inevitable.

But in making his case, Obama appears to be perpetuating several myths about the recession he inherited and the slow recovery over which he's presided. Among them:

1) The recession was unexpectedly severe. "I think we understood that it was bad, but we didn't know how bad it was," Obama said recently in an interview with a Seattle radio station.

However, several economists had been warning late in 2008 about the severity of the crisis. A January 2009 National Association of Business Economics survey found the "worst business conditions since the survey began in 1982," which was during that deep and prolonged recession.

During his campaign, Obama routinely depicted the downturn in the direst terms, calling it "the worst financial crisis since the Great Depression" in his first debate with Sen. John McCain, R-Ariz.

If Obama didn't know how bad the economy actually was when he was sworn in, he soon found out. Just one month after taking office, the Bureau of Economic Analysis reported that real GDP had fallen 6.2% in Q4 2008, nearly double its earlier estimate, and the biggest quarterly drop since the 1981-82 recession.

2) The country had to dig out of a historically deep hole. Obama often explains the length of the recovery by noting how deep the recession had been.

But while the so-called Great Recession lasted 18 months and sent unemployment to 10.1%, the 1981-82 recession was comparable in length and severity. That one lasted 16 months, and pushed unemployment even higher, to 10.8%.

The difference is that today unemployment is still at an historically high 8.6%, and it's only that low because the labor force has declined. Real GDP is a mere 0.04% above its pre-recession peak. At the comparable point in the Reagan recovery, unemployment had plunged to 7.3%, while the economy had grown 12% above its pre-recession peak, and was still climbing fast.

3) Everyone knew the recovery would take a long time. In his recent "60 Minutes" interview, Obama claimed that "I always believed that this was a long-term project," and "that it was gonna take more than a year. It was gonna take more than two years. It was gonna take more than one term."