Everybody should view this report, which clearly shows how Obama inherited a devastated U.S. economy from Bush, but since March 2009 (Obama took office in January 2009), the economy has grown for seven consecutive quarters.
Wrote the authors: "The so-called 'Great Recession' of 2007-2009 lasted for 18 months, the longest in post-World War II history, and the nation's real Gross Domestic Product (GDP) declined by 4.2% between the fourth quarter of 2007 and the second quarter of 2009, the largest relative decline in GDP since the national recession of 1945 as the U.S. began its demobilization from World War Two."
"Given potential annual GDP growth of around 3% per year in recent years, this finding implies a GDP gap of close to 10% of GDP in the most recent quarter. The U.S. economy was likely operating at $1.4 trillion below its potential output in the first quarter of 2011."
The report also clearly shows how, from 4Q 2007 to 2Q 2009, Bush's Great Recession lost 7 million net jobs.
Increased productivity per U.S. worker -- a 9 percent gain from 4Q 2008 to 1Q 2011! -- and increased hours per worker are responsible for the economic recovery, which has remained a "jobless recovery." And so, as real hourly wages have not increased, over the first seven quarters of the recovery corporate profits increased nearly 40 percent. Correspondingly, the Dow Jones average increased 46 percent, and the S&P 500 index increased 44 percent.
Continues the report: "The extraordinarily high share of national income (88%) received by corporate profits was by far the highest in the past five recoveries from national recessions. [...] The absence of any positive share of national income growth due to wages and salaries received by American workers during the current economic recovery is historically unprecedented. The lack of any net job growth in the current recovery combined with stagnant real hourly and weekly wages is responsible for this unique, devastating outcome."
The report's conclusion: "[T]he nation's recovery from the 2007-2009 recession is both a jobless and a wageless recovery. Aggregate employment still has not increased above the trough quarter of 2009, and real hourly and weekly wages have been flat to modestly negative. The only major beneficiaries of the recovery have been corporate profits and the stock market and its shareholders. Most holders of savings and money market accounts also are net losers due to declining real interest rates which have been in negative territory for many interest bearing and money market accounts."
Meanwhile, Republicans in Congress tell us that corporations cannot afford to lose tax breaks on private jets, and the highest marginal income tax rate and corporate tax rate must be cut, as well as capital gains taxes, to spur investment and job creation. They also want a tax-free holiday for corporations to bring their offshored cash to the U.S.
In other words, Republicans in power argue that the people who have benefited the most from the recovery -- large corporations and shareholders -- need the most relief. They don't care that such voodoo/trickle-down economics have proven not to work, pre- and post-recession.
Obama has not been a very good President, and his focus has not been on job creation but rather buttering up to Wall Street sleazeballs and the Chamber of Commerce; nevertheless, there is a clear difference in party ideology here. The choice is stark.
I'm not naive enough to think that most Americans will care about these truths come November 2012 -- if they see a bad U.S. economy, they'll probably blame Obama -- but for those who do care about the truth, look it in the face.
By Andrew Sum, et al
May 2011 | Center for Labor Market Studies at Northeastern University
No comments:
Post a Comment