- Post 12 June 2012
- By CNSNews.com
Which makes our current anemic economic condition Obama's legacy, not George Bush's fault.
(CNSNews.com) - Although President Barack Obama said in a speech last week that during his time in office “we've gone through three and a half years of very difficult times,” the last recession ended three years ago this month--in June 2009--and since then the United States has been in an economic expansion period, according to the Business Cycle Dating Committee of the National Bureau of Economic Research.
The committee, comprised of prominent economists, is described by the New York Times as “the official arbiter of economic turning points.”
It made its official declaration that the last recession had ended during the month of June 2009 in a statement that it published on Sept. 20, 2010.
“The committee decided that any future downturn of the economy would be a new recession and not a continuation of the recession that began in December 2007,” the committee said in that Sept. 20, 2010 statement. "The basis for this decision was the length and strength of the recovery to date."
“At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in June 2009,” the statement said. “The trough marks the end of the recession that began in December 2007 and the beginning of an expansion. The recession lasted 18 months, which makes it the longest of any recession since World War II. Previously the longest postwar recessions were those of 1973-75 and 1981-82, both of which lasted 16 months.
“In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity,” said the committee. “Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The trough marks the end of the declining phase and the start of the rising phase of the business cycle. Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion.”
Since World War II ended in 1945, the National Bureau of Economic Research says, there have been 11 business cycles, each with an expansion and a recession. On average, post-World-War-II recessions have lasted 11.1 months and expansions have lasted 58.4 months. We are now in month 37 of the current expansion.
The NBER Business Cycle Dating Committee that determined that the last recession ended in June 2009, included Prof. Martin Feldstein of Harvard University, who was President Ronald Reagan’s top economic adviser; Prof. Jeffrey Frankel of the John F. Kennedy School of Government at Harvard; Prof. Robert Gordon of Northwestern University; Prof. James Stock of Harvard; Prof. James Poterba of MIT, who is the president of NBER; and Prof. Robert Hall of Stanford University, who serves as the committee’s chair and who is a senior fellow at the Hoover Institution.
David Romer, whose wife, Christina Romer, chaired President Obama’s Council of Economic Advisers from January 2009 through September 2010, was on leave from the NBER Business Cycle Dating Committee when it determined that the last recession ended in June 2009. Since then, Christina Romer has joined him on the committee.
In the eleven quarters since the recession ended in the second quarter of 2009, real Gross Domestic Product has never grown by as much as 4 percent in any quarter. In those eleven quarters, it has grown by: 1.7 percent, 3.8 percent, 3.9 percent; 3.8 percent; 2.5 percent; 2.3 percent; 0.4 percent; 1.3 percent; 1.8 percent; 3.0 percent and 1.9 percent.
When the recession ended in June 2009, unemployment was at 9.5 percent. It subsequently peaked at 10.0 percent in October 2009. Since then it has never dropped below 8.1 percent. In May, it was 8.2 percent, up from 8.1 percent in April.
“And so, yes, we've gone through three and a half years of very difficult times,” President Obama said in Los Angeles last Thursday. “I had to make a bunch of decisions that weren’t always popular. But we made the right decisions. Because it turns out that the American people are tougher than tough times.
“Because of the resilience and the grit of the American people all across this country, we’re starting to see progress again,” said Obama. “We’re starting to move in the right direction again. But--and here’s the reason I’m here today--we’re not finished. We’ve got more work to do. This journey is not over. There are still too many folks out there who are hurting, who are desperate for a job but can’t find one.”