EconomyFollow

This is my response when people say that black people are worse under President Obama. "look at the black unemployment rate!" It's as if they don't remember the past.

Only in books, not like for realsies

Colonel Sandurz: Try here. Stop.
Dark Helmet: What the hell am I looking at? When does this happen in the movie?
Colonel Sandurz: Now. You're looking at now, sir. Everything that happens now, is happening now.
Dark Helmet: What happened to then?
Colonel Sandurz: We passed then.
Dark Helmet: When?
Colonel Sandurz: Just now. We're at now now.
Dark Helmet: Go back to then.
Colonel Sandurz: When?
Dark Helmet: Now.
Colonel Sandurz: Now?
Dark Helmet: Now.
Colonel Sandurz: I can't.
Dark Helmet: Why?
Colonel Sandurz: We missed it.
Dark Helmet: When?
Colonel Sandurz: Just now.
Dark Helmet: When will then be now?
Colonel Sandurz: Soon.
Dark Helmet: How soon?

Um... That's not how you do averages. You add up all the values over the period in question and then divide them by the number of values you've used. You can't just look at the point at the beginning and the point at the end and subtract. Here's why:

Imagine two scenarios:

A. DOW starts at 10,000, goes up to 15,000 in the second year, stays there for 6 years, then drops down to 9,000 in the last year.

B. DOW starts at 10,000, goes down to 5,000 in the second year, stays there for 6 years, then jumps up to 11,000 in the last year.

By your ridiculous math, you'd say the economy was better in scenario B, but in reality it was much much better in scenario A.

Of course, all of this assumes that average market prices over a period of time is a complete (or even valid) measure of the entire economy. There's a lot more than just market prices involved. What's normally used are things like unemployment rate (and yes, adjustments for LPR should apply there), GDP growth rate, interest rates, inflation rates, wage levels, upward mobility rates, tax rates, debt rates, etc. Those are the factors that most directly affect the majority of the citizens economic prosperity. Can I get a job? Does that job pay enough? Will that job result in increased prosperity over time? Will the money I earn become less valuable over time? How much of those earnings to I get to keep? How much will I continue to keep over time? These are the questions most people are asking when they're trying to figure out if an economy is good or bad, not "how well did the market do?".



Again. Start and finish values do not an average make. You're also missing context. Go look up the same values for the Clinton administration, then the Bush administration, and then the Obama administration. Notice a pattern? If you were to actually average the numbers in each set, you'd find that every single administration had a higher average than the one before. There's a number of factors for this, but the point is that dollar values go up over time. The numbers in the market, therefore, also go up over time.

What you're doing would be like me arguing that Obama's economy is worse that Bush's because a loaf of bread costs more today than it did 8 years ago. Um... That's inflation. It's normal (which is why, you'll notice, I didn't make this argument).



Yes, it is. Unemployment was lower on average over Bush's term than it has been during Obama's. GDP growth was higher on average over Bush's term than it has been during Obama's. Inflation, adjusted wages, interest rates, etc, have been relatively unchanged. The point is that those trying to make Bush's economy look bad always do so by simply comparing start and end points, without looking at the middle. Bush was handed an economy with a low unemployment rate, but happened to leave office right in the middle of a recession, with a relatively high rate. So he's bashed for "loosing jobs", but the reality is that for the majority of his term, unemployment was quite low. Obama, on the other hand, was handed an economy with a highish unemployment rate, saw it immediately jump to a very high (10%) rate, stay there for a couple years, and then sloooooooowly trickle down until just in his last year and a half, it's back to where it was for most of Bush's term, and that only if you ignore the labor participation rate.

It's has been much harder to find a good paying job over the last 7 year than it was over the previous 8. And that's the fact that matters here.



No. Based on actual numbers that aren't horrifically manipulated in order to support an absurd conclusion. Try checking out this site. Plug in "last 20 years", and look at the period from 2000 on. Now. Apply this math concept called calculus and calculate the area under the line for the years from 2001-2009 and compare to the same calculation for 2009-2015. Heck. You don't need to calculate anything. One glance at the chart tells you that total unemployment over Obama's term has been much much much much much (do I need more muches?) higher.

That's how you compare these things. And when you do, it's really obvious that Bush's economy, while not perfect (no economy is), was much better in terms of jobs at least, than Obama's. It's not where the start and stop numbers are. It's the area under the line that matters.

Interesting. For once, you are not completely wrong ( about the averages, don't get too excited ). I also love how you attempt to dismiss DOW as an argument, because it does not fit the narrative. Now only gainful employment matters. Fine.

Your own link from macrotrends you so helpfully posted, contrary to you characterization, shows a huge spike at the end of 2008 ( surprise ) and slow, but steady decline in unemployment by 2014. In simple terms, Obama inherited terrible situation and made it bearable. Bush inherited decent economy that was chugging along and managed to run it into the ground by the end of his two terms. Which one of the two is better? The answer should be simple.

You are right that the area under the line matters. It may surprise you, but the direction you are going matters too. Ask those people who lost their jobs. They might tell you whether they think they had it better then.

At least now we are not shedding them like then. Wait, it seems like the economy is adding some jobs. Then again, we do have TPP coming so we might shedding again quite soon.

What's inflation at again?

And you've completely ignored the bulk of my postings where I stated that market values are not the best indicator of economic health. How about commenting on all the other stuff I talked about instead of obsessing on the one indicator you seem to think is the only thing that matters?

I dismiss the DOW (at least the numbers used earlier) for a number of reasons. It's hugely influenced by speculation and thus exhibits larger exaggerated swings, it only represents a small portion of the market itself, the market is only a part of the economy as a whole (and may not at all represent economic health for most workers in said economy), and the numbers we're looking at aren't adjusted for inflation. As I pointed out above, every 8 year period of the DOW is higher than the 8 years previously. Yes, even Bush's average DOW numbers were higher than Clinton's, which were higher than Bush 41's, which were higher than Reagan's, etc, etc, etc. So just saying "the numbers are higher now" doesn't mean much. When you compare the numbers today after the markets have recovered to the point right when they were at maximum negative impact from recession, it means even less.



I'm not a big fan of the whole "inherited this, inherited that" claim. Economies don't turn on a dime, and the factors that lead to crashes can be varied and unpredictable. Timing of those crashes, therefore, is somewhat random. We could say that Bush "inherited a recession", if the start of his term was just a few months later (the official recession at the beginning of his term started in Jan 2001). He could not possibly have been responsible for the causes of that recession, right? Yet, you argue he "inherited" an economy that was chugging along nicely, despite that clearly not being the case.

My point is that the factors that lead to recessions are often a matter of random timing and it's hard to pin fault on one president, or one congress, or one set of actions and policies. However, the factors that affect recovery can be said to belong to the president and congress acting at the time. The fact that the Obama recovery was very very slow relatively speaking is hugely relevant. Lots of people lost their jobs in 2008/2009. The issue is how long where they unemployed, and how quickly did the economy get back on track. And that's how you judge a presidents economic success. And on that measure, Obama did very poorly.



During the first 7 years under Bush? Compared to the entire 7 years so far under Obama? They had it much better then. They were employed. Many of them are not now, and have not been (or have been underemployed) since. That's a "bad time", and it didn't get better for many of them under Obama.



Except you're forgetting the entire point of this thread. The labor participation rate is very high. What this means is that we're not actually adding more jobs than people are dropping out of the labor force. Here's the article I read (so not the Breitbart one). Here's the telling part:



142k jobs were created. 579k people left the job force. That's a net loss of jobs. This has been going on for some time. My point is that what appears to be a recovery in terms of unemployment rate really isn't one (or isn't much of one). Most estimates of the "true rate" (adjusted to what the LPR was when the recession started to get a correct relative unemployment rate) is somewhere around 8-9%. Which means that we haven't really recovered much at all from the high of around 10%. And that's before looking at underemployment (lots of people are working jobs making relatively less today than they were making pre-crash).

So moving in the right direction perhaps, but very very slowly and with questionable benefits for those affected. Another indicator is yearly GDP growth rate. If the pie isn't growing at a sufficient speed, but population still is, that means less economic prosperity to go around. And Obama has not yet cracked the mid 2% range yet. Which is pretty awful. It's also another reason why looking at the stock market isn't a great indicator. High market values with log GDP growth generally means that companies traded on those markets are doing well, but that this likely represents more offshore investment and productivity than here in the US. Which yeah, also affects job creation rates. Which is like the 800lb gorilla in the room. And that's been at best hit or miss. It's certainly not been the roaring recovery that we were promised would happen if only we passed the recovery act (which we did).

Obama made all the growth disappear... Which is why it was gone before January 20, 2008.

GOP economics, folks

Edited, Oct 7th 2015 6:18pm by Jophiel

Heil Hitlary!

Good news, folks! All your jobs aren't gone because of Bush's failed economy! They're just... devalued! Much like your house, savings, etc. Wasn't it a fun ride though? Don't blame Bush! seriously, he did nothing but sit and watch it unfold so you can't really blame him, right?...

Because the economy hasn't been hit so hard since the 20s? When a Democratic socialist staged a comeback rivaling that of the '04 Red Sox?

Jobs aren't "economic growth". Jobs are the result of that growth. You're mixing up concepts. Badly. Jobs can be lost. Growth really isn't. Growth is measured by things like GDP and market values. Those measure the "size" of the economy. Those in turn can affect things like jobs and wages. Which yes, in turn can affect growth due to effects on purchasing. There's a feedback effect between these factors, but they are not all the same thing.

What I find amusing is that you are steadfastly ignoring the key arguments I have made and instead are choosing to use "gotcha" arguments based on manipulating the terms and concepts of the issue itself. I said that many sectors of the economy grew during Bush's term, not just housing. The valuation loss in the housing market affected those due to credit issues, not because the growth in those sectors disappeared. And again, that's about investment confidence, not actual assets disappearing. I also pointed out that your claim about Bush's recovery being built on a bubble (again, so you can defend Obama's tepid recovery) was absurd, since past recoveries have been similarly fast, and didn't have housing bubbles going on.

You're grasping at straws to try to defend the indefensible. Obama's recovery has been horrible and there's no one to blame that on other than Obama and the Democrats. As the OP shows, even the unemployment rate recovery (which is what impacts the average person the most) is somewhat illusory when you account for labor participation rate. How the economy "feels" to the average person kinda matters here. Stock markets have been recovered for several years now, why hasn't this helped the working class much? We should have booming job creation rates right now (should have for 4 years really). We should have 3-4% GDP growth rates right now. We aren't, and we haven't. Normal recessions are followed by a huge upswing recovery with high numbers in those areas. We haven't seen that in this recovery.

It's hard to argue that this can be anything other than Obama's poor policies after the recession. We can run around trying to place blame on the recession itself, but as I said earlier, it's what you do in response to a recession that really matters. And Obama's response was the wrong one.