http://crooksandliars.com/jon-perr/measuring-bush-recession Friday Nov 21, 2008
Measuring the Bush Recession
By Jon Perr
As the American economy plunges deeper into crisis, the conservative
chattering classes are hoping for a replay of their 2001 blame game.
Having successfully perpetuated the myth
http://mediamatters.org/items/200405010002
that President Bush "inherited a recession" from Bill Clinton,
right-wing mouthpieces from Rush Limbaugh to Fred Barnes began blaming
Barack Obama for the Bush recession literally within hours of his
election.
http://www.perrspectives.com/blog/archives/001302.htm
But as a quick glance at the data shows, across virtually economic
indicator from GDP, unemployment and consumer confidence to home prices,
foreclosures and manufacturing output, ownership for this mushrooming
economic calamity squarely belongs to George W. Bush.
Gross Domestic Product.
U.S. GDP shrank by 0.3% in the third quarter (July through September),
http://www.nytimes.com/2008/10/31/business/economy/31econ.html
a decline which followed the downward revision of the Q2 number from
3.3% to 2.8%
http://economix.blogs.nytimes.com/2008/09/26/gdp-figures-revised-down...
But while "recession" is traditionally defined as two consecutive
quarters of GDP contraction (which is almost certain to occur), the
quarterly Survey of Professional Forecasters by the Federal Reserve Bank
of Philadelphia concluded that the United States entered a recession in
April.
http://www.reuters.com/article/topNews/idUSTRE4AG4KV20081117?feedType...
Recession at the State and Local Level.
While there is debate as to whether or not the United States has
technically slipped into a recession, at the state and local level there
is no doubt at all.
According to Moody's Economy, by the end of September 30 states were in
recession, up from just five in March.
http://abcnews.go.com/Business/Economy/story?id=6158877&page=1
19 more states were deemed "at risk."
(Only Sarah Palin's petro-state of Alaska was forecast to experience
economic growth.)
276 of 380 metropolitan areas measured by Moody's had also sunk into
recession.
http://www.economy.com/dismal/article_free.asp?cid=110021&src=ce_asp
Combined with the downward spiral of home prices, these regional
economic contractions are having a devastating impact on state and local
tax revenue - and government services.
http://www.economy.com/dismal/article_free.asp?cid=110021&src=ce_asp
Unemployment.
In October, the American economy shed 240,000 jobs, catapulting the
losses for the year to 1.2 million.
At 6.5%, the unemployment rate hit a 14-year high.
http://www.nytimes.com/2008/11/08/business/economy/08econ.html?_r=1&o...
The percentage of the adult population now working dropped to 61.8%, its
lowest level in 15 years.
http://thinkprogress.org/2008/11/07/job-loss/
The Philadelphia Fed survey forecast 222,000 more lost jobs per month
through the end of the year.
With some analysts now predicting unemployment will hit 8% by the middle
of 2009, President Bush's reversal on extending jobless benefits could
not come a moment too soon.
http://news.yahoo.com/s/ap/20081120/ap_on_go_pr_wh/jobless_benefits
Jobless Claims.
Of course, the corollary to skyrocketing unemployment is an explosion of
new jobless claims.
The Labor Department today released figures showing new unemployment
claims jumped to 542,000 last week, a 16-year high.
http://thinkprogress.org/2008/11/20/jobless-claims-2/
First-time jobless claims have now remained above the 400,000 for 17
straight weeks.
Consumer Confidence.
Given those dismal numbers, it's no surprise that consumer confidence
nose-dived in October to its lowest level on record.
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/28/AR200...
Even with steep declines in gas prices, consumer confidence dropped 23
points to 38.0, its worst performance since the Conference Board began
the survey in 1967.
Consumer Spending.
Consumer spending, long the engine of American economic growth, is also
in a tailspin.
It dropped 0.3% in September and at annual rate of 3.1% for the third
quarter, its worst performance since 1980.
http://www.washingtonpost.com/wp-dyn/content/article/2008/10/31/AR200...
And outlays for big-ticket items such as cars plunged by 2.9%.
With disposable income growing only by a tenth of one percent, Americans
for the second month plowed more money into savings.
Home Prices.
The news from the collapsing housing market, the sector that triggered
the economic crisis, remains dark.
Earlier this week, the National Association of Realtors calculated that
median home prices in the third quarter plunged by 7.7% compared to the
same time frame in 2007.
http://www.talkingpointsmemo.com/news/2008/11/median_home_prices_fall...
Almost 80% of the metro areas (120 out of 152) measured experienced
declines.
New numbers from the Commerce Department reflected that weakness; new
housing starts and permits fell to the lowest annual rates since 1960
and 1959, respectively.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ayFpFXHa5bvU&refe...
Home Foreclosures.
While Congress and the Treasury Department debate whether and how to
help American homeowners on the brink of foreclosure, the crisis only
deepens.
In the third quarter, 766,000 homeowners received a foreclosure notice,
a staggering 71% increase from the same period in 2007.
http://www.huffingtonpost.com/2008/10/23/us-foreclosure-filings-up_n_...
Overall, nearly a fifth of American homeowners - 7.5 million of them -
may now be "under water" on their mortgages,
http://money.cnn.com/2008/10/30/real_estate/underwater_borrowers/?pos...
with levels in Nevada (47.8%), Michigan (38.6%), Arizona (29.2%),
Florida (29.2%) and California (27.4%) all topping 25%
Manufacturing.
While the woes of the auto industry dominate the headlines this week,
http://www.huffingtonpost.com/2008/11/20/bipartisan-group-works-to_n_...
the American manufacturing sector overall is in deep trouble.
As the Washington Post reported, in October "the Institute for Supply
Management's index of conditions in the manufacturing sector is at its
lowest level since the nation was in a recession in September 1982."
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/03/AR200...
Ian Shepherdson, chief U.S. economist for High Frequency Economics,
called the figures "hideous" and noted "when you see a number like this,
it's very alarming."
Stock Market.
Of course, the highest profile economic failure of George W. Bush,
America's first MBA President, has been on Wall Street.
http://www.perrspectives.com/blog/archives/000476.htm
This week, the Dow dropped below 8,000, its lowest level in six years
http://www.nytimes.com/2008/11/20/business/economy/20markets.html?em
and nowhere near the 10,588 when Bush took office.
http://www.dailykos.com/storyonly/2008/11/19/171644/60/362/663749
In all, over $6 trillion was erased from U.S. equities just this year.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aGI32RkZdwL8&refe...
Alas, history has proven once again that Wall Street and the economy
overall simply do better under Democratic presidents.
http://www.perrspectives.com/blog/archives/001266.htm
Consumer Prices.
In the current crisis, even seeming good news is bad news.
Led by dismal home prices and plummeting oil and gas costs (which may
dip below $2 a gallon),
http://www.google.com/hostednews/ap/article/ALeqM5i5TtajgUpSm7KY5jf-l...
the Consumer Price Index dropped 1.0% in October.
http://www.reuters.com/article/marketsNews/idUSN1932231520081119
That decline this week sparked fears among some economists and on Wall
Street that the United States could face the prospect of deflation.
While still seen as unlikely, a chronic drop in prices at a time of low
interest rates could limit the ability of the federal government to spur
economic activity.
Health Care.
The downward spiral of the Bush economy is also producing dire
consequences for Americans' health care.
Patients and providers alike are feeling the pinch.
A survey by the Kaiser Family Foundation found that one in three
Americans had had trouble paying medical bills in the past year.
http://www.nytimes.com/2008/10/26/opinion/26sun3.html
Half had someone in their family skip bills or forego medical care.
For the first time in a decade, orders for prescription medications are
down (albeit by 1%).
Hospitals, too, are suffering.
http://www.huffingtonpost.com/2008/11/19/report-economy-sickening_n_1...
New data this week from the American Hospital Association showed
decreases in both admissions and elective procedures as well as a spike
in the number of patients who can't pay for care.
Hunger.
With the decline of the American economy has come another, quietly
growing crisis: hunger.
Even before the steep downturn in September, the U.S. Department of
Agriculture estimated that the number of children who went hungry in
2007 - almost 700,000 - jumped by 50% over the previous year.
http://www.msnbc.msn.com/id/27771447/
Overall, 12.2 of Americans - 36.2 million people - don't "have the money
or assistance to get enough food to maintain active, healthy lives."
Leading Economic Indicators.
The grim data for jobless claims, manufacturing and personal income
combined to produce a steeper than expected drop-off in the Conference
Board's index of Leading Economic Indicators.
http://money.cnn.com/2008/11/20/news/economy/leading_indicators/index...
Designed to predict economic activity six to nine months out, the LEI
fell 0.8% in October, its third decline in the past four months.
President-elect Barack Obama is almost certainly right in describing the
economy he will inherit from George W. Bush as facing "an unprecedented
...
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