Are You Better Off Than You Were at the End of the Bush Administration? A Data-Based Assessment

I’ve heard a lot about the “four years ago” comparison. Four years ago, we were on the cusp of Don Luskin’s famous prediction (“… we’re on the brink not of recession, but of accelerating prosperity.”), and Phill Gramm had two months earlier decried the ongoing “mental recession”. [0] It seems to me the more appropriate marker is the last election, in 2008Q4. We can then assess what the data tells us about 2012Q2 vis a vis 2008Q4.

Aggregate Measures of Activity and Income

First, I look to several measures in addition to the standard real GDP indicator. Note that I divide by population, in order to express the variables in per capita terms (thereby controlling for population growth). In the graph below, when the series lie above the horizontal line at zero, then the indicator exceeds its level at 2008Q4. The numerical value can be interpreted as the percentage deviation from 2008Q4 levels, in log terms.


Figure 1: Log real per capita GDP (blue), GNP (red), Net National Product (green), Gross Domestic Income (purple), all SAAR in Ch.2005$, normalized to 2008Q4=0. Source: BEA, 2012Q2 second release.

In other words, aggregate output and income measures on a per capita basis exceed levels recorded at the end of the G.W. Bush Administration. (Given population growth, obviously absolute levels exceed by an even greater extent). If one looks to production by American-owned factors of production (as opposed to factors of production located within the geographical confines of the Nation), then output growth is even more pronounced.

If one refers the first derivative, then the case for improvement is reinforced. Per capita GDP was declining 10.3% (SAAR, log terms) in 2008Q4, and rose 1.0% in 2012Q2.

Consumption and Household Net Worth

Consumption is the object typically thought of as the measure entering into the utility function. We do not observe consumption, but we do observe consumption expenditures. Per capita consumption expenditures is above levels of 2008Q4. Consistent with that finding, net household worth is also above corresponding levels.


Figure 2: Log real per capita consumption (blue), SAAR in Ch.2005$, and net household worth (red), normalized to 2008Q4=0. Source: BEA, 2012Q2 second release, and Fed Flow of Funds.

Clearly, both measures exceed those recorded at the end of the Bush Administration; per capita consumption was 2.8% higher, while as of 2012Q1, net worth was 7.6% higher. I find both results remarkable, given the fact that these indicators are often depressed after large financial balance-sheet induced recessions.[1]

The gradient is also relevant; per capita consumption declined 6.2% in 2008Q4, and rose 1.0% in 2012Q2 (SAAR, log terms).

The Private Sector

What about real compensation and productivity? BLS data indicate that both have risen.


Figure 3: Log real compensation (blue) and output per hour (red) in the nonfarm business sector, normalized to 2008Q4=0. Source: BLS via FRED, and author’s calculations.

The fact that real compensation is essentially at 2008Q4 levels is not encouraging. Nor is the fact that output per hour is far above compensation, as it indicates that a higher share of income is going to capital in the nonfarm business sector (this is confirmed by BLS data on the income share; it’s been decreasing since 2000 pretty much without stop). In this sense, the owners of capital have been doing particularly well. As an aside, on this Labor Day, it seems to me that measures that would allow labor to garner a larger share of national income are in order. Had the greater demand support measures been implemented, higher demand for labor would have induced greater upward pressure on wages. Unfortunately, additional measures to support aggregate demand have been stifled in the Congress.


As economists (actually, as sensible people), we should be interested in the difference relative to the counterfactual. The counterfactual (as well as conditioning) is a difficult concept for many people to understand, but I’ll forge ahead, using the CBO assessment of high-low range of impacts to determine the counterfactual level of GDP in the absence of the American Recovery and Reinvestment Act (ARRA). In my view, this range encompasses the range of multipliers associated with reasonable models of New Keynesian and Keynesian/neoclassical synthesis flavors.


Figure 4: Real GDP (thick black), WSJ mean forecast from August survey (thick blue), counterfactual GDP w/o American Recovery and Reinvestment Act, low impact (green), and high impact (red). NBER defined recession dates shaded gray. Vertical line at 2008Q4. Source: BEA, 2012Q2 second release, WSJ, CBO (Aug. 23) Table 1, NBER, and author’s calculations.

While by either measure, the positive impact of the ARRA has diminished, it should be remembered that in 2010, output was substantially higher (and unemployment lower, between 0.4 to 1.8 percentage points) than it otherwise would have been. Just because it’s in the past, doesn’t mean that it doesn’t matter. Furthermore, the midpoint of the CBO range would place economic output in 2012Q3 0.4 percent above what it would have been in the absence of the ARRA. (For discussion of why one might expect multipliers to be at the higher end, see here).

(As an aside, note that even when one uses the pessimistic measures of multipliers, output would have continued to decline after 2009Q2 in the absence of the ARRA. I do wonder how sensible people can continue to say “the stimulus didn’t work”. Once again, to me, this is the triumph of ideology over empirics.)


Or, what would Romney have done?

Finally, I think it useful to consider a regime that was completely laissez faire with respect to interventions should the economy encounter new challenges. We have one observation on Governor Romney’s policy perspective — namely what should have been done with Detroit in 2009. He recommended letting the companies go bankrupt. [2] While auto manufacturing does not represent all of the US economy, it remains important (e.g., [3]) and so this policy prescription should be taken as an important indicator of his approach.

Figure 5 depicts how motor vehicle production and new vehicle consumption has evolved since Governor Romney’s admonition to let Detroit go bankrupt.


Figure 5: US motor vehicle output (blue) and consumption of new vehicles (red), in bn. Ch.05$. Dashed line at 2008Q4 (November 2008). NBER defined recession dates shaded gray. Vertical dashed line at 2008Q4 (Romney’s NYT OpEd). Source: BEA, Table 7.2.6U. Real Motor Vehicle Output, August 29, 2012 release, and author’s calculations.

In other words, the real value of production of motor vehicles is now 40% above those recorded in 2008Q4 (in log terms). Once again, one can think of the counterfactual. After an uncontrolled bankruptcy, in which no financing was available due to the contemporaneous financial crisis, would the auto industry have risen like a phoenix, outshining what we have witnessed thus far? It’s possible. After all, I ran a 45 second 440 in high school. Plus or minus 25 seconds… [4]

Update, Tue, 9/4 8:30PM Pacific:

Reader tj adopts the “4 years ago” metric, which places things in the middle of the last year of the Bush Administration. Why. Beats me (well, we all know why). But here is a normalization based upon 2009M01; since the BLS data on employment are based on surveys mid-month, this is the latest observation before the beginning of the Obama Administration.


Figure 6: Log nonfarm payroll employment (blue), and Bloomberg consensus as of 9/4/2012 (light blue); log private nonfarm payroll (red), and consensus (pink); and civilian employment (green), all seasonally adjusted, normalized to 2009M01=0. Source: BLS, July release, Bloomberg, and author’s calculations.

Civilian employment and private nonfarm payroll employment exceed 2009M01 levels as of July. Nonfarm payroll employment as of July remained below 2009M01 levels, and Bloomberg consensus has it still below as of August. Since the difference between NFP and private employment is government employment, we can see that if you’re a government worker, or received services from government workers or learned from public school teachers, you are not necessarily better off.

Update, 9/6 6PM Pacific:

The stock market price index now exceeds four years ago, or January 2009.


Figure 7: S&P 500, monthly averages of daily data (blue), and close on 9/6 (red square), and CPI (2010=1) deflated SP500 (green). NBER defined recession dates shaded gray. Long dashed vertical line 4 years ago at 2008M09, and short vertical dashed line at 2009M01. Source: FRED, NBER, author’s calculations.


53 thoughts on “Are You Better Off Than You Were at the End of the Bush Administration? A Data-Based Assessment

  1. Fraud Guy

    So what happens to the top numbers if you take out the auto industry (as would likely have happened in a Romney run world)?

  2. W.C. Varones

    Wow – using aggregate values instead of medians?
    I thought we were concerned here with wealth distribution and the Gini coefficient.
    Bankers, Obama bundlers, and asset owners are indisputably better off, and they skew the aggregates higher.
    The middle and working classes? Not so much. You think the median household has made more in stock market equity than it has lost in home equity? Hardly.

  3. Dave

    I am retired after years of work and savings, living on far less than we earned. Now living on income from savings, or at least I was before such income evaporated. Yes, everyone has a new vehicle with 1/2% interest loan. However the retirement savings are only earning .25%. Recently bought a new car for wife (275,000 miles and 14 years on old one). Paid cash since loan interest would have been above savings earnings.
    Economy is worse, or better for different segments. The overall “means” are always error scores. The variability is where the truth falls.

  4. JPA

    What do the graphs look like if you filter out the top 1%? It is quite telling that the growth that has been achieved has been upon the backs of the 99% and their growth in productivity (see Figure 3) What is really needed is a measurement of “economic quality” that would pit days spent on vacation vs. consumption of anti-depressants.

  5. pgl

    Here’s an experiment of interest – do the same exercise starting as of January 1977 going through say October 1980 – just before the Carter v. Reagan election. I bet we were also better off in terms of real per capita GDP. But then Jimmy Carter was saddled with high inflation and the FED’s overreaction to it.

  6. JBH

    GDP being above its 2008:4 level is no measure at all. GDP has grown 1.5% making this the slowest recovery in US history. Comparing a single recession quarter to the latest quarter is a grasp for the absurd. Adding consumption to the analysis only confirms that at 1.6% consumer spending growth, this is also the slowest recovery ever in terms of consumption. Household net worth is indeed $9 trillion dollars higher today. But owners’ equity in homes is below where it was at the end of 2008. All nonfinancial assets are in fact down, from $24.8 trillion then to $23.8 trillion today. Of course financial assets are up. How could it be otherwise with a trillion dollars more base money via the QEs, which per the Fed’s intention has artificially boosted stock and bond prices? But the full story would make mention of the deleterious effects of the coming unintended consequences when in future years that base money is extracted from the system. Real compensation is up, but the annual rate of growth of 0.1% makes this just one more aspect of the economy experiencing its slowest (nearly 4-year) recovery ever. Productivity is up massively, and is a good part of the story of why inflation has remained low. Indeed prices according to the CPI in the 42 months since December 2008 have risen just 8% relative to their 12% increase in the last 3½ years of the Bush administration. On the other hand, Americans are not unambiguously better off for the historic increase in the national debt. There is a future price to pay. Yes the counterfactual has it that the Obama recovery would have been even slower otherwise, but so would the Bush recovery have been without the Bush tax cuts. Further, the price at the pump is at an historic record for a Labor Day. Gas prices would not be this high were the administration’s policy friendly to domestic petroleum production. And what about the unemployment rate comparison? Where is that in this post?

    What would Romney have done? Let me reframe the question. What would he not have done? GM, Solyndra, cash-for-clunkers, all these are pikers in the larger context. What he would not have done is bash business. As Keynes might have said, you cannot beat the horse of animal spirits and expect to field the crops. Keynes did in fact advise Roosevelt about putting the cart in front of the horse: “It will be through raising high the prestige of your administration by success in short-range Recovery, that you will have the driving force to accomplish long-range Reform. On the other hand, even wise and necessary Reform may, in some respects, impede and complicate Recovery. For it will upset the confidence of the business world and weaken their existing motives to action, before you have had time to put other motives in their place.” Without ideological blinders, anyone can see the people, the horse, and the cart are hardly better off today even though the economy is in recovery.

  7. sherparick

    I note that no President really controls interest rates. The Fed controls short term rates, but long term rates are usually controlled by the market’s perceptions of what longer horizon economic situations that might drive those short term rates. (QE I and II and operation twist may have affected long term mortgage rates since the FED has been buying MBS notes.) If there had been no ARRA, and no December 2010 tax cut/pay roll tax cut/unemployment extension deal, then demand would have fallen even more over the last four years, unemployment would be much greater, and spiral of asset deflation, debt default, unemployment increase, wage deflation, leading to more debt default and asset deflation would have been worse. Whatever spikes in short term rates the hawks might have undertaken to “cut off inflation” would have quickly retreated as a default/deflation cycle accelerated. Assuming the security of your investment, you individually many have ended up better off since the value of your principal, if just cash or gold, would have appreciated relative to everything else. But I don’t think the fact that Andrew Mellon was better off in 1932 then he had been in 1928, relative to the rest of the country, was proper measure for well being then or now.

  8. nobody

    W.C. is right – means vs. medians… somehow it’s always about the median when people want to argue about how difficult life is, but now we switch to means to argue how great the last 4 years have been?
    Equally important – “4 years ago” was not Q4 2008. Try indexing figures 1 & 2 from Q3 or even Q2 2008, i.e., compare to when Obama was last campaigning.

  9. Buzzcut

    I look at the state of Honda, which seems to me to be underinvesting in new models and technology due to having to compete with these zombie automakers, and I see the real problem with the bailouts. Honda is arguably a more American car company than GM at this point, and they WOULD have “risen like a phoenix” had GM and Chrysler gone bankrupt.
    I think that to a lesser extent Toyota is in the same boat.
    The Korean automakers, while not underinvesting by any measure, certainly would be more profitable and making even more product in the US had GM and Chrysler gone bankrupt. Perhaps Hyundai would have picked up Ram trucks and Chrysler minivans from a bankrupt Chrysler. Maybe Nissan would have picked them up.
    At some point we have to confront the FACT that, even now, there is excess capacity amongst the various automakers. If you can’t get rid of that capacity through bankruptcy, how do you get rid of it? Doesn’t it make sense to take that excess capacity away from the two weakest players in the auto market?

  10. Rich Berger

    Professor Chinn-
    I think the Obama administration is looking for someone like you to tell the voters how well they are doing (the administration seems unwilling to make this case).
    Here’s your chance to return to government service.

  11. jonathan

    The best thing about this post is the title: it rephrases the question accurately. The intent of “are you better off” is to make you focus on how bad it has been without the including context. The title adds this context: are you better off not compared to some abstraction but to where things were and where things were going when the world was falling apart at the end of the GWBush presidency?
    If you expand the facts to include more than the economy, remember the last election: the main argument, which weighed heavily for me, was whether Obama would be tough enough to handle the wars in Iraq and Afghanistan. Are we better off today? Yes. We are no longer in the black hole of Iraq with about 5000 US soldiers killed and over 33000 officially wounded (because they don’t count all wounds). We are nearing the end of the even black black hole of Afghanistan, with a pullout date set, over 2000 US soldiers killed. And we’ve given up on the idiocy of “nation building”. Remember that? I give credit to Obama for that because he ran on the concept that we should put more into Afghanistan and more into “nation building” and reversed course when it became obvious the war is not winnable and the nation can’t be built. So yeah, we’re a heck of a lot better off.
    And even though there is an insane argument about how much the military needs, at least we can have the discussion because we won’t be fighting in Iraq and Afghanistan. So that makes us much better off.
    Inflation is low. Banks are making money and rebuilding capital – nearly $35B in profit last quarter alone – so our financial system is back on its feet. Our companies have made the highest level of profits in generations and have also built up their balance sheets. Real estate has hit bottom and started back up, though slowly. These are important things but only take meaning in the context ascribed by the post title which creates the framing context of the end of the Bush Administration, when banks were wards of the state and real estate was in free fall.
    I also think that healthcare reform is a huge positive.

  12. Steven Kopits

    I had a chance to look through Romney’s energy policy document this morning.
    I can’t say it thrilled me, not because I disagree with much there, but because it lacks coherence. There are no binding themes. Rather it reads like a collection of ANGA, API, and Citi Research talking points assembled by a junior staffer.
    Further, “Energy Independence” is something of a red herring. Energy independence does not prevent price shocks, rather it balances out the impact, with losses to the consuming sector offset by gains to the energy producing sector. But oil is always available–it’s only a matter of price, so “independence” has relatively little meaning (except as pertains to US power relative to China). To have chosen such a title suggests a lack of familiarity with more substantive energy issues.
    I would have probably chosen a theme along the lines of “Energy and Prosperity”.

  13. Ricardo

    I talked with one of my friends who thinks he is not better off today than he was 4 years ago. I explained to him that 4 years ago he had a mortgage of $300,000. Today he has no mortgage. Sure he lost his house, but he qualifed to not having to claim his loan to equity deficit as income on his income tax.
    Yes he lost his life savings and he sold thousands of dollars worth of stock at a loss trying to keep his house, but now he has huge loss carry-forwards to offset his income tax for many years in the future, that is when he finds another job.
    Sure he lost his job, but now he can stay home and watch TV every day and the government is expanding the foodstamp – oops, I mean SNAP program. He can SNAP all the food he needs.
    So I said, what are you complaining about. You have no debt, you have no assets to worry about, you have free food and government housing, and he can sit at home all day and watch soaps or Judge Judy. In the aggregate my friend is much better off than he was 4 years ago.
    Jeez, some people are just so ungrateful.

  14. spencer

    I for one admit to being very disappointed with Obama’s response to the mess he inherited.
    But the key question is would be better off with his muddle through policies than if we essentially reverted to the policies that created the mess in the first place.
    If we are going to repeat the republican policies of tax cuts, gutting the regulatory agencies and expanding military spending I would demand that advocates of these policies convince me that they would produce better results the second time around.

  15. tj

    The most recent total nonfarm payroll employment data is July 2012.
    4 years ago total employment was 137 million. Today it is 133 million, a decrease of 4 million workers. It’s ironic that Obama claims to have created 4 million jobs.
    I guess there are at least 4 million seasonally adjusted families out there that are not better off.

  16. Tudor

    I agree entirely with the “Mean vs Median” concerns voiced above. The country on average may be doing better, but those advances have been completely captured by the upper echelons of society. The pie has grown, but a few people are eating so much more that most people need to eat less.
    I didn’t realize we had so many Occupy-types here but I’m glad people are starting to recognize the need for a policy response to rising inequality.

  17. 2slugbaits

    tj Four years ago (July 2008) Obama wasn’t yet President. He didn’t take office until the 20 January 2009, at which time employment was almost exactly what it is today…133 million. Basically job growth in Obama’s 3.5 years has been about the same as Bush did over 8 years. Neither performance is exactly stellar but this time we’re at least heading in the right direction and it only took half as long.
    As to real (constant dollar) median wages, it’s interesting to note that those wages were actually increasing after the stimulus kicked in and it was only after the stimulus faded out and (coincidentally???) the Tea Party Congress took over in 2011 that real median wages started to fall (about 2.3%). In any event, it strikes me as kind of bizarre that people would criticize Obama for the disproportionate gains in national income by those at the top and simultaneously argue for more Romneynomics trickle down magic. I guess you have to be gold bug to understand that mentality.

  18. Bruce Hall

    I didn’t realize we had so many Occupy-types here but I’m glad people are starting to recognize the need for a policy response to rising inequality. – Tudor
    The economy is not a zero-sum game where you have to take from one income group to “balance” others. What are needed are policies that raise all income groups… elimination of onerous regulations on small businesses would be a good start.
    That’s not to say that the issues are all at the federal level. Most large city governments are leading the charge against businesses through their regulation and high tax policies and a loath to give those up even in the face of political extinction. Detroit is an excellent example of that.

  19. T Reality

    Foul! GM and Chrysler DID go bankrupt! They used Chapter 11 to stiff their creditors, their suppliers, their bondholders, their stockholders and used government bail-out money ahead of bankruptcy to shore up the UAW’s pension funds, which had taken a hit along with the rest of us. GM and Chryslser’s recovery isn’t from the bail-out money, it’s from the massive debt and expense relief they realized in Chapter 11 banktuptcy! Foul! The Obama administration lies and so do you.

  20. 2slugbaits

    T_Reality Their creditors ultimately got more than they otherwise would have. Under liquidation the bondholders would have received virtualy zero. And the UAW agreed to give up many of its pension fund claims in exchange for an ownership stake, which at the time was no sure thing.
    Bruce Hall I travel to Detroit quite often…more often than I care to. The Detroit metro area is orders of magnitude better than it was 3 years ago. For example, compare Van Dyke from Warren through Troy. Three years ago hundreds of stores, restaurants and car dealerships were boarded up. Today almost all of them are open for business.
    What are needed are policies that raise all income groups… elimination of onerous regulations on small businesses would be a good start.
    There are two different problems. The problem of income inequality is a long term structural problem and it’s been a problem for decades. I don’t expect Obama to fix that problem. It would be nice, but I don’t expect the impossible. The other problem is weak aggregate demand, and that is a problem that government can fix without too much effort. Relaxing business regulations would have zilch effect on aggregate demand. Even if reducing regulations increased output (and this is highly dubious), as Menzie’s Figure 3 shows, an increase in output per worker does not necessarily result in increased compensation. One of the problems with recent recoveries has been that labor productivity has been strong, thereby holding down employment growth. Relaxing regulations would not increase compensation.

  21. Jack

    Nice post. However, what I’m really waiting for from Dr. Chinn is a resurection of his “Dispatch from Wisconsin” series; except I’m hoping that he will expand into a “Dispatch from Illinios” documenting that asinine Walkerite devotee named Rahm Emanuel. Apparently, Rahm has the gall to bully the noble teachers of the great state of Illinois by cutting their benefits! What does Rahm think he is? A republican???

  22. DOR

    “Are You Better Off Than You Were at the End of the Bush Administration?”
    Yes, and thanks for asking! At the end of the Bush Administration, over 600,000 people were filing new unemployment claims every week. Today, that number is below 375,000, a 36.2% improvement.
    Disposable income per person was $3,040 lower than it is today.

  23. jonathan

    Always taking into consideration that people don’t change their minds, it’s fascinating to see how people repeat misleading memes that fit their existing structure of belief. So for example, we’ve had Solyndar cited and been told Romney wouldn’t do that. First, Solyndra was done by Bush, starting in 2007 after Solyndra applied in 2006 to a program begun by Bush in 2005 (the Energy Policy Act of 2005). DOE closed on the loan guarantee in 9/2009, a process possible only because Bush gave preliminary approval before Obama took office. And of course the spectre of favoritism is brought up without mentioning that Solyndra’s venture backers are weighted toward GOP funders, including the Waltons (of Walmart). And even then, Solyndra is 1.3% of DOE’s loan portfolio. That’s all.
    But it comes up repeatedly. And Romney wouldn’t have done it, even though a number of deals done by Bain didn’t work at all.

  24. Anonymous

    It’s the wrong question. The election’s about the next 4 years, but Let’s see. At the inauguration, all 3 of my younger sisters were out of work. Two of them were laid off the same week earlier that month from different companies, one on return from her honeymoon. The third was ineligible for unemployment benefits despite paying UI taxes (on which she’d never drawn) for 12 continuous years, until a voluntary stint out of the labor force in Taiwan on a student visa. My 62 y.o. aunt (who’d been continuously employed for 44 years) had been unemployed for a few months, and her self-employed husband had been losing money for 18 mos, and one of my older brothers was unemployed, and several nephews-in-law, and another had a 7-day shift-work job for a major cell-phone corp with an abusive boss for lousy money, with no raises; and the list goes on, half-a-dozen relatives were borrowing money from me (forcing me to stay in a position well past the point at which I should have left), many more were upside-down and one disaster from disaster. Lots of things are better, a few things are worse, plenty could be better absent dipstick austeriens. The other two folks in the best shape then (Dad and oldest brother, both self-employed) are in worse shape, but would have been worse without stimulus (Dad did his second highest gross ever during stimulus). One sister moved back to Taiwan on a work visa after 18 mos or so of no work and a mortgage, she’s making more there teaching English than she ever did as a paralegal here, pays a much lower tax rate, has a 250/mo rental, buys only a couple gallons of gas a week, has full healthcare with a part-time job, and has her place here rented. She’s paying down her credit. The next youngest got fluent in Spanish, finished her 4-year degree (at a state school with some fed tax benefits, though she lost her unemployment as soon as she enrolled) after a 5-year hiatus, and got a job as a city librarian (which is hilarious, considering most of her coursework is in civil engineering). The youngest lived on savings and unemployment for a year, got married to a guy who sold his start-up before the bust, moved out of state (to CA), and then (a couple months ago) moved to Peru (I expect she’ll be fluent in a year), at the cost of living there, I don’t expect she’ll ever need to be gainfully employed again. My older brother worked for the Guard (ANG) full-time stateside while his unit was deployed this last time (they’d have to sign too many waivers to deploy him again, but won’t give him any disability), then took a job driving a truck (lease-purchase, owner-operator, so we’ll see how that works, the company’s a driver-mill) when he got bumped on his unit’s return. His daughter finished her 4-year Ed degree but hasn’t been employed, now has two daughters, but that nephew-in-law got on with Costco and made it stick. One brother-in-law (CSE major) has managed to keep up with the payments on 3 upside-down houses, but he and that older sister both have health problems, his mostly due to the healthcare system’s failings. The bro-in-law working for the cell company managed to get out, and now has better paying, more varied, more satisfying, less frustrating, upwardly mobile, work during normal hours for a smaller tech company where he is well respected. He and that sister (the librarian) have paid off both their cars (one of them now newer), and have a low interest mortgage on a nice condo, which they scored the 8K bonus on. They are looking at buying rentals. She is looking at getting into a position with educational benefits to get her MLS.
    One niece (working but broke then) married a Navy airman and bought a house. Several other nephews and nieces are using transferable GI benefits to pursue higher education.
    Mom/Dad are with the sister (who lives in Taiwan) on a 3 week trip to mainland China (they should be on their first day in Beijing today). They all speak a lot more Mandarin now than 4 years ago.

  25. KJMClark

    Have to half-agree with T_Reality. Look at Romney’s second to last paragraph:
    “A managed bankruptcy may be the only path to the fundamental restructuring the industry needs. It would permit the companies to shed excess labor, pension and real estate costs. The federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk.”
    That’s almost exactly what we ended up doing. As it turned out, DIP financing “guarantees” weren’t enough. Given the situation, it was either direct Federal provision of the DIP financing, or liquidation. Romney was clearly *not* calling for liquidation. There’s no reason to believe he wouldn’t have sweetened the pot until someone was willing to provide the financing, or would have realized it was fruitless and done what we ended up with.
    I think both sides are disingenuous about the GM and Chrysler bankruptcies. It plays better to each sides’ politics to pretend that Romney wanted something else and Obama did something else.
    And as someone who lives in SE Michigan, 2slugbaits is right. Metro Detroit is *much* better than it was in 2008-2009. Heck, it’s much better than it was in 2007.

  26. Menzie Chinn

    KJMClark: Well, if you search for the word “government” in the oped, you will find little more than “post-bankruptcy financing” and warranty guarantees; no mention of direct lending.

    But perhaps I have been too hard on Governor Romney. If so, it’s only because Romney has been on both sides of the Obama intervention. From Wonkblog:

    It can be a bit hard to parse Romney’s position on the auto bailout. At times, Romney has claimed that he opposed Obama’s bailout, saying, “The president tells us that without his intervention things in Detroit would be worse. I believe that without his intervention things there would be better.” But then there have been times when his campaign has taken credit for the bailout, as when his adviser Eric Fehrnstrom said, Romney’s “position on the bailout was exactly what President Obama followed. I know it infuriates them to hear that. The only economic success that President Obama has had is because he followed Mitt Romney’s advice.”

    So the infinitely malleable Mitt Romney can be cited for my position, and for yours.

  27. SecondLook

    More of a real problem than the issue of whether Americans are better off now than 4 years ago, is how relatively little better off they are now than they have been in earlier decades.
    Median household income, adjusted for inflation:
    1970: $43,766
    1980: $44,616
    1990: $48,423
    2000: $53,164
    2010: $49,445
    Essentially, we are back to 1990 levels, and a whole 13% over four decades. Of course there a number of variables to consider: The increase in two income households, the decrease in the number of persons per household, and the increase in household debt by almost a factor of 5 since 1970.
    The bottom line comes down to it seems that, in aggregate, household incomes have basically been on an undulating plateau for a long time.

  28. KevinM

    Now add about ten years to the left side of those charts. Or fifty or one hundred years. If McCain, Perot or Terry Bolea were president I would not expect much different. The next president, which ever one wins, is doomed. The damage was done by Clinton and Bush. Obama is just the guy who isn’t fixing it.

  29. LSR

    The time comparison pinpointing on the worse of the recession in the fourth quarter of 2008 versus the second quarter of 2012 is truly ridiculous. Like comparing a person’s mental and physical health when he was at the worst state of depression versus a recovered state.
    If you compare the average real growth of the Bush years versus the Obama years, all benchmarks such as GDP, consumption, investment, exports performed better during the Bush years. Of course, the latter analysis is biased due to the debt-fuelled boom of the housing sector.

  30. spencer

    Actually the Bush years are better because of government spending. The private economy –real GDP less government –is actually doing better under Obama than it did under Bush.

  31. Dave

    It is interesting to me how many people use housing data to support the political part of their argument (“I am not doing better, my house was foreclosed.”). Essentially, they blame Obama for the housing crash.
    This is like blaming the doctor for your flu. The housing crash was caused by banks, long before Obama took office. (Anyone who still blames the CRA is willfully ignorant, and should not be allowed to vote.)
    This was the mantra of the GOP Convention: If you succeed, you did it without government help. If you fail, it is the government’s fault.
    When Obama took office, America was losing a million jobs a month. While Obama struggled to get back to break-even, the GOP fought him at every step.
    Today, the banks are not only back to their old tricks, but they are running their offspring for President. If you think the housing crash was fun, guess what they have planned for Medicare.
    The argument to me is not whether I am better off, but whether I want to turn my Medicare and Social Security over to banks and insurance companies. Considering what a wonderful job they did with the housing market, Obama looks like a miracle-worker by comparison.

  32. rprocto2

    I decided to look and see which I was better under in comparing my salary to Bush and Obama.
    Under Bush, my salary increased 194.12%. Part of that is graduating with a Bachelor’s degree.
    Under Obama, my salary increased 21.79%. That includes graduating with a Master’s degree.
    The only thing that saved the salary increase under Obama was a huge salary increase due to a counter-offer from the company I was working for at the time. Achieving a Master’s has done very little to increasing my salary, which is contrary to the going conventional wisdom.
    And no, my Master’s degree is not some worthless degree, it is in Information Technology in software development and project management.

  33. Anonymous

    Achieving a Master’s has done very little to increasing my salary …
    If you are surprised by the diminishing marginal value of advanced degrees, you are going to be really disappointed if you get a PhD.

  34. Havenor Greene

    It’s a nice try by the Democrats but what brought us to that point in late 2008 was the actions of primarily democrats. They controlled the congress and house during those years and keep in mind that it was Clinton who signed off on the banking and insurance deregulation. It was also Clinton who signed off on the Fannie Mae debacle. Yes, it happened during the Bush tenure but who set the wheels in motion?

  35. Emm

    Two large drains on the economy and the perceived ‘welfare’ of the economy during the Bush Administration were the war in Iraq & Afghanistan and the rupture of the housing market bubble. We are coming up on another wave of housing foreclosures but not to the magnitude of the first crash. These graphs seem to demonstrate what the economy is doing for corporations not the average person.
    Also the number of $8 an hour jobs has increased. Jobs that use to pay $9, $10 or $11 and hour have dropped. So even if someone is working, it may be at a much reduced rate than previously earned.
    So on the one hand, the economy does seem less ‘bad’ than it was 4 years ago but for me personally, I am STILL not able to get ahead because of factors outside of my control, like ridiculously low interest rates on savings accounts and increasing grocery prices.

  36. William T. Schreck Jr.

    I am about the same as I was at the end of bush but there was a prediction at that time that things were about to get really bad with medicair and social security. The bush administration wanted to cut them both to the bone so the working retired elderly were about to become poorer then they already were. It was a a very disturbing thought after working your whole life doing and paying what you were suppose to to keep everyone eating and warm with a roof over their heads. Then the bush and republicans wanted to cut that so the working retired of the U.S.A. were going to suffer while the rich and the well off were going to get richer and more well off and they wanted this to happen. And now the new bush era is here again but only they are not even trying to hide it. They are openly saying cut the retired middle class of their medicaire and social security so the rich can get richer. The rich are safe no matter what happens as long as the middle class is starting to suffer. This puts the rich in a stronger position to control the middle class to except and do what the republican rich want. This is no longer the country of oporatunity it is the country of the republican run rich versus the poor and keeping the poor in its place and creating more poor so they can control more of the U.S.of A. Our country is becoming a serious problem country that is eventually going to hang itself. The republicans are going to get so greety that they are going to start laying in bed with the wrong counties and are goig to go down the drain with them stepping on your neck so you cant breath. My grandchildren are in trouble and I am not smart enough to see a way out. We are going to go to hell if we do not smarten up and stand back up for ourselves and clean this all up… The democrats are not the complete answer either. The answer is to get the United States back into believing in itself again and everybody working together and solve all this shit.And the is a lot of shit to clean up….. THANK YOU

  37. Handyman

    With the National Debt of 16 Trillion & Obama & his wife spending money on their vacations like it’s a fairy-tale, I just don’t see it getting any better..Then there’s the healthcare reform, if only you people could read it, it will destroy us.. There’s not enough paper here to write on as to why we need to get rid of Obama..Open your eyes America…

  38. doug

    Economics aside- didn’t our soldiers fight and die to prevent the spread of socialist regimes and communism. Why vote for it on our own soil?

  39. tj

    My reply to Menzie’s update didn’t get posted. Why? Beats me (well, we all know why).
    Reader tj adopts the “4 years ago” metric, which places things in the middle of the last year of the Bush Administration. Why. Beats me (well, we all know why).
    I used 4 years from July 2012 because July 2012 was the most recent employment data. I could have gone back to September 2008, 4 years prior to my post. Or, I could have gone back to August (or July?) when Republicans first began asking if you are better off today than 4 years ago.
    You lefties want to give Obama credit for all the positive economic change since he took office but want to blame Bush for all the negative economic chage since he took office.
    Why? Beats me (well, we all know why).

  40. Menzie Chinn

    tj: Well, I don’t know why. I certainly didn’t delete it.

    In any case, you’ve made my point. What is so interesting about 4 years ago? If we are evaluating records of administrations, shouldn’t we calibrate to the actual time periods of those administrations?

  41. JDH

    tj: I remember reading your comment and must have deleted it accidentally if it didn’t appear.

    This has nothing to do with censoring, and instead is due to errors I make in processing a huge volume of spam comments very quickly.

  42. Matthew Carlisle

    “It’s a nice try by the Democrats but what brought us to that point in late 2008 was the actions of primarily democrats. They controlled the congress and house during those years and keep in mind that it was Clinton who signed off on the banking and insurance deregulation. It was also Clinton who signed off on the Fannie Mae debacle. Yes, it happened during the Bush tenure but who set the wheels in motion?”
    So, when the banking deregulation took place you blame Clinton (with a republican house) but when the housing crash starts you blame the democratic house (with a republican president).
    At least be consistent. Is it the president that’s at fault, or congress? You can’t just pick and choose to fit your particular ideology.
    Oh wait, you can, and did.

  43. Peter Schaeffer

    This is more DNC (Democratic National Committee) press release material. If the Republicans dared to use these statistics, Chinn would flay them without mercy (rightfully so).

    A few germane “facts”

    1. The employment / population ratio has fallen from 61.4% in 2008Q4 to 58.6% in 2012Q2. See series LNS12300000 over at

    2. Labor force participation has fallen from 65.8% in 2008Q4 to 63.8% in 2012Q2. See series LNS11300000 over at

    3. Discouraged workers have risen from 608K in 2008Q4 to 830K in 2012Q2 (down from a peak of 1318K). See series LNU05026645 over at

    4. The total unemployment rate (U6) has risen from 12.7% in 2008Q4 to 14.8% in 2012Q2. See series LNS13327709 over at

    5. Average hourly earnings for production workers are down from $8.82 (in 1982-84 dollars) in 2008Q4 to $8.75 in 2012Q2. See series CES0500000032 over at

    6. Median household income has plunged in recent years. From Quote

    “During the recession, real median annual household income fell by 3.2 percent, from $55,309 in December 2007 to $53,518 in June 2009. During the economic recovery, real median annual household income fell by an additional 6.7 percent, from $53,518 in June 2009 to $49,909 in June 2011.”

    It turns out the if you use the above methodology Bush was actually a great success (bet you didn’t know that). From 2000Q4 to 20008Q2 real per-capita GDP rose by 9.56%, real per-capita GNP rose 10.32%, real per-capita disposable personal income rose 16.52%, real per-capita PCE rose 12.26%.

    Even if you go from 2000Q4 to 2008Q4 the numbers are all strongly positive with real disposable per-capita income up 13.25%.

    See BEA NIPA table 7.1 for the details.

    Bush was a wonderful president… Obviously. Just like Obama.

  44. Peter Schaeffer


    Back to the reality based universe.

    From Wikipedia

    “Solyndra’s loan approval process began under the George W. Bush administration. However, emails show that two weeks before Barack Obama became president, the Energy Department panel considering the loan unanimously decided not to proceed. In March 2009, after Obama had become president, one White House budget analyst wrote an email stating that “This deal is NOT ready for prime time.”[19] However, Solyndra was the first company approved for a loan guarantee under the Obama administration.[20] On March 20, 2009 the United States Department of Energy made a “conditional commitment” to a $535 million loan guarantee to support Solyndra’s construction of a commercial-scale manufacturing plant for its proprietary solar photovoltaic panels.[21] The White House scheduled a press event for September 4 and federal reviewers gave final approval on September 2.[22] After securing the loan guarantee, the Federal Financing Bank, a part of the Department of the Treasury, loaned Solyndra $527 million.[23]”

    Solyndra is an Obama turkey.

  45. Peter Schaeffer


    ‘W.C. is right – means vs. medians… somehow it’s always about the median when people want to argue about how difficult life is, but now we switch to means to argue how great the last 4 years have been?’

  46. steve

    Oh hell no!, to quote my nephew. Banks, Government and Corporations, arm and arm, wrecking the middle class and enslaving the next 3 generations. HELL NO! Time for all the folks in Washington D.C. to duck, we warmed up here in Wisconsin and now we are coming for the rest of the clowns.

  47. mike

    While it’s true, as JBH says, that the President does not, by law, control the actions of the Fed, we have at present the most highly politicized Fed in US history, and the President does seem to be calling the shots at the Fed. Witness the unprecedented actions by Bernanke to monetize the debt. A past Fed chair, the esteemed Paul Volcker, resigned from the Chairmanship rather than do that when it was requested of him. Now we have the (unsuccessful) attempt to goose the economy via QE3 a month before the election, another highly politicized move.

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