Saturday, July 30, 2016

Updated Employment Chart for Post WWII Recessions

Here is the final chart before employment for the 2008 recession finally got back to where it was in November 2007.  As you can see, it took about 6.5 years for employment levels to finally recover.  Part of that could be blamed on the severity of the financial crisis in the summer of 2008, but the policies of Obama and the Democrats severely extended the downturn, as Hoover and FDR did during the Great Depression with their government intervention.  Employment recovered after every other post-WWII recession within 1-4 years, most within 2 years.  If government would let the business cycle play out, we would have much shorter downturns.  And while it's true that Obama was elected at month 12 and took office at month 14 on this graph, I don't think any credit can be given to Obama for turning the economy around when that is what it naturally does after every recession.  That's the important context this graph gives, that recessions are usually brief.  Obama's actions probably extended the natural recovery time by 3-4 years.

Hat tip: Calculated Risk