Four Charts from Doug Short–Recession? No. We're in the Second Great Contraction

The recession of 2007-2009 was by far the most savage economic decline over the time frame of these charts. Prior to the last recession, real GDP hit a new peak within a quarter or two of the official recession end. Per capita real GDP usually lagged a quarter before hitting its post-recession peak; the one exception was in 1990-1991, when the per capita variant required an extra three quarters to set a new peak. Employment has historically been slower to hit new highs following recessions.

The so-called double-dip recession of 1980-1982 had a non-recessionary interlude of four quarters. All three of our indicators hit new peaks within in the second quarter after the first of the double dips. Where are we today? We’re now in the ninth quarter after the last recession. Real GDP is within shouting distance (0.5%) of a new peak. But real GDP per capita is less than halfway from its trough to a new peak, and, twenty-six months after the recession ended, nonfarm employment is only a bit over 20% of the way from its trough to a new peak.

Check out the four charts carefully, especially the second one: Real Per Capita GDP as a Percentage of the Previous Peak.


Posted in * Culture-Watch, * Economics, Politics, Economy, History, Labor/Labor Unions/Labor Market

4 comments on “Four Charts from Doug Short–Recession? No. We're in the Second Great Contraction

  1. robroy says:

    If one looks at the graphs in Kendall+’s referenced articles, you see that the recovery was blunted or halted, depemding on the graph, in 2010. The heritage foundation has a zoomed in view of blunting of the recovery which better shows the details. [url= ]It occurs in April of 2010[/url], just after the passage of Obamacare in late March. Hmmm?

  2. Capt. Father Warren says:

    It is fine for economists to argue semantics and to point out how the current symptoms of economic disease are not the same as “the last time”. After all, generals do the same thing in comparing a present war to the “last war to end all wars”.

    For those of us who are on the front lines of the economy, it sure looks like a double-dip recession (except for those in the housing industry where it is a continuous Depression). After some tangible early growth in 2010, we started to see a flatening in industrial demand toward the end of 2010. In 2011, that flatening has turned south and factories are pulling in production plans. The hiring window has slammed shut again; the only reason “official” unemployment is not 13% is that so many are no longer participating in the official economy; you can see that in the workforce percentage stats.

    What the article ignores is how the Fed Govt has sucked so much money out of the private sector in order to grow (non-productive) Govt that the smaller private sector (as a % of GDP) just can’t compensate. All the “green money” for stupid “green energy projects” is now down the toilet as these are folding faster than a bad hand of cards in a Mississippi Casino.

    Like a big billboard says on my frequent trips to Jackson: “you can’t fix stupid, all you can do is vote it out of office”. Amen.

  3. Bart Hall (Kansas, USA) says:

    The great fault of the Obama administration in dealing with our present economic situation — and they have plenty of company in Europe — was their failure (or perhaps refusal) to recognise that we are in a balance-sheet adjustment, not an inventory adjustment.

    There is quite simply too much debt, and far too much of it was incurred for utterly non-productive purposes: government programs, real estate, bass boats, cruises, and so on. From top to bottom balance sheets carried vastly too much bad debt and the adjustment was inevitable.

    Obama’s crew, trapped in their leftist paradigms, continue to believe that the solution for too much debt is … even more debt. So they increase debt to prop up blatant economic losers, GM, certain banks, SEIU employees and their totally unsustainable wage, benefit, and pension packages … and so on.

    Every cent of increase in the national debt over the last three years has come from increased government [b]spending[/b], not entitlements. The last Bush/Republican deficit was about $160 Billion, one-tenth of that prevailing a mere four years later. This in most decidedly NOT how you deal with a balance-sheet correction.

    And on top of it all, the current administration continues to impose some 5,000 new regulations per year, nearly all of which make it harder (not easier) for companies and individuals to reduce their debt loads.

    And through it all they repeatedly demagogue the very sectors of the economy — energy chief amongst them — which can generate enough new wealth to enable the necessary de-financing of this economy to proceed with substantially less agony.

    Balance-sheet corrections continue until all the bad debt is washed away. All of it. By running debt sky-high, stifling jobs, strangling profits and condemning investment — yet simultaneously applying all of the old failed leftist nostrums — this administration has made the situation vastly worse, whilst addressing the real issues … not at all.

  4. FrCarl says:

    #3 And the administration is set to attempt to fix the real estate overleverage by buying(?) homes and then renting(?) them out. How will they determine fair market value? fair rental value? qualifications? etc. etc…. Their actions do portend one thing – more govt employees and an extremely large pot of money with which to attract congressional approval. sheesh!