Numbers don’t lie
The key issues of the national political debate have been unemployment and economic growth. The Democrats say that Obama has done about as well as one can expect, given the mess he inherited. The Republicans say the recovery has been anemic compared with previous recessions. So who is right?
As a research scientist, I evaluate performance by making a comparison with an appropriate benchmark. Previous recessions can be misleading as a benchmark because there are different economic factors in each recession. The current recession has been a worldwide phenomenon. Therefore, a reasonable benchmark for the Obama administration is the performance of other governments that have faced the same challenge. Relevant data can be found at http://www.tradingeconmomics.com.
At the peak of the recession, the fourth quarter of 2009, the U.S. unemployment rate was 9.8 percent. In September 2012, the rate was 7.8 percent, an improvement of 2 percent. The comparison improvements over the same time period for other major countries are Britain (down 0.1 percent), Canada (up 1.1 percent), France (down 0.6 percent), Germany (up 1.0 percent), Greece (down 15.3 percent), Italy (down 2.3 percent), Japan (up 0.7 percent) and Spain (down 7.1 percent). The numbers indicate that the United States has improved its unemployment problem more effectively than any of these other countries.
At the peak of the recession, annual gross-domestic-product growth for the U.S. was down 3.7 percent. During the third quarter of 2012, the annual growth was 2.1 percent, for an improvement of 5.8 percent. The comparison improvements over the same time period for other major countries are Britain (up 3 percent), Canada (up 4 percent), France (up 2.6 percent), Germany (up 4.9 percent), Greece (down 2.8 percent), Italy (up 2 percent), Japan (up 8.8 percent) and Spain (up 2.9 percent). Among these major economies, only Japan has had better annual GDP growth than the U.S.
The improvement numbers for these two measures, unemployment rate and annual GDP growth, indicate that the recovery from the recession has been relatively slow for all countries compared with other recessions. The one conclusion that seems relevant to the upcoming election is that the government of the United States has been very effective in dealing with this challenge.
The Obama administration is either very lucky or doing something right.
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