Pethokoukis

U.S. recovery weakest of any in the world since 1970

JPMorgan

JPMorgan

The Obama administration says one reason the U.S. economic recovery has been so slow is that it is still suffering from the aftermath of the financial crisis. But the U.S. is not the first country to suffer a recession and a financial crisis. And the U.S. recovery is doing worse than all of them.

In a new research note, JPMorgan points out that since 1970, Japan, Finland and Sweden have all gone through what the U.S. is currently going through. And all three of them had recoveries stronger than America’s. The above chart compares the economic recovery — as measured by real GDP per capita — of each nation at different points after the trough of their recessions. And the U.S. is in dead last after 12 quarters from the bottom.

You should particularly note how the U.S. is doing versus Japan, another large, advanced economy. As JPMorgan economist Michael Feroli notes:

The poster child for slow growth coming out of a debt-fuelled financial crisis has to be Japan, which ever since the early 1990s has had trouble getting a head of steam. The recession which kicked off Japan’s “lost decade” lasted from 1991 to 1993. Including the recovery experience from that recession is sobering: we are currently faring worse than Japan at the same point in their lost decade.

So is the U.S. headed for a Lost Decade (or more) of weak growth, too?

20 thoughts on “U.S. recovery weakest of any in the world since 1970

  1. The explanation for our slow recovery is that the U.S. is quickly and efficiently adapting from the old, inequitable system of free-market capitalism, to the rational, central planning of the hoped-for change to a Progressive society.

    This is a massive experiment to prove one of the fundamentals of Progressive theory. The proposition under test: Capitalist managers are useless and overpaid, and they should be replaced by government Obureaucrats who will work without skimming off undeserved profits, or indeed any profits.

    After a period of adjustment lasting a few years, or possibly as long as 30 years, the new efficient and profitless society will emerge, having greater income equality and equal health care for all. Well, at least more equal incomes and more equal health care for non-government, non-union workers. Government and union workers will be well paid and medically treated by the special plans which philosopher-kings minimally deserve.

    This didn’t work out well for the former Soviet Union, or for the current Russia, or for most of Europe. But, the inventive, can-do spirit of the USA will make it work for us now. Yes, we will continue to have personal inventiveness and discovery, without our past reliance on individual achievement and the motive to personally benefit. Patriotism to the new Obureaucracy will be sufficient for the emergent, golden world.

    A deep and principled philosophy supports the Progressive desire to take more money from the rich, to do so much good, through deep layers of federal bureaucracy. If they can take money from the upper-middle class, then so much the better.

    Official:  10 years ago the top tax rate was 39.6% and the economy was good.
    Mike:  Those things aren’t related. How would higher tax rates produce a growing economy?
    Official:  I don’t have time to discuss philosophy with you. You have the money. We want the money.

    See Property and Pigs

    • I don’t know how old you are or maybe you are just ignorant about what socialism is. That is when the government controls everything. No one owns private property, there is no private industry. The gov’t is in charge of production and distribution of goods. That means, the essence of what the United States is, liberty and personal freedom, would no longer exist.

      When the pilgrims landed on Plymouth Rock, they tried it your way. Everyone put all of their crops together and got what they needed. However, some realized they could get what they wanted and not do any farming. The food supply quickly dwindled and some people starved. And so that was the first failure of socialism. They quickly went back to the system of everyone farming their own crops and keeping them. That meant everyone had to make a contribution and work if they wanted to eat.

      In order for society to be successful, capitalism works best despite it’s flaws. More people are required to work and make a contribution. Maybe you are one of those people who do not want to work and just want everyone else to and you benefit from it.

      • to wodiej,

        My comment is, it think, a straightforward presentation of what our Hope’n’Change Progressive government says it is giving to us. As such, it is self-parody, but I threw in some disrespectful terms (like Obureaucracy) to indicate that I don’t like it one bit.

        So, I’m with you. Capitalism reflects some failures in human knowledge and reason. Government amplifies those failures into catastrophes. I’m for Capitalism.

  2. Apples to Oranges. Different time frames

    We are in a world wide recession. How does the US recovery look in comparison to Europe?

    • Better look at the graph again – that’s one apple to 3 other apples. Don’t try the Obama Obfuscate, it is not going to work here.

      • No, he’s right. You should be comparing it to how other countries are recovering now. Also, why are Finland and Sweden there? They have minor economies compared to the US. A graph with a much larger, more complex economy such as Australia or Europe as a whole might be a better representative.

        Yeah, seriously this is not an accurate comparison. This is the greatest recession since the Great Depression, not some 1-2 year hickup recession.

        • Seeing this chart leads to more questions. Over the relevant time periods, for each country:
          1. What happened to their currency exchange rate?
          2. What happened to their exports?
          3. What happened to their total government spending?

          And, does immigration affect real GDP/capita?

  3. Obama has created thousands of new rules, laws and regulations along with preventing drilling for our own natural resources which have kept the US Economy down, nothing else but that. If we get rid of Obama and all the things he has done we will have the biggest economic boom in the history or mankind

  4. let me try a different spin…
    there has been no recovery.

    exhibit A:
    federal tax revenue, by year.

    2.568 trillion, 2007.
    2.524 trillion, 2008.
    2.105 trillion, 2009.
    2.163 trillion, 2010.
    2.304 trillion, 2011. The federal government, under the same tax structure, actually took in more money in 2006, five years ago.

    We are still more than 250 billion, or 10%, below the average revenue created in 07-08.

    imho, this is the best measuring stick of the health of our economy.

    unemployment?
    any job created that isn’t worth more than 50k doesn’t even dent the federal revenue deficit.

    • one could argue that there has been a recovery, if one starts at 2009…

      but when you expand to look at revenue under bush, it is evident that we have fallen behind the pace that we were on.

      btw…
      federal tax revenue in 2003, 1.782 trillion. federal tax revenue in 2007, 2.568 trillion. under the dreaded bush tax cuts, revenue grew 44% in four years.

      the trick here is that one could readily expand the view of revenue to include clinton’s years…

      if a lib wants to pretend that obama has produced growth given a shoddy baseline, then you are also conceding to the argument that bush grew the federal revenue 44%, in four years, WITH tax cuts.

      • let me give you the break down…
        average federal revenue generated by income tax 07-08:
        1.154 trillion.

        current(2011) revenue from income tax:
        1.091 trillion.
        63 billion lower.

        corporate tax, avg 07-08:
        337 billion.
        current(2011):
        181 billion.

        156 billion behind pace.

        as offerred earlier-
        “We are still more than 250 billion, or 10%, below the average revenue created in 07-08.”

        63 billion+156 billion=219 billion. ok, so only 88% of the 250 billion, behind the 07-08 pace, can be credited to our economic stagnation.

        never fear…
        wh budget forecast provide that federal revenue will jump 433 billion, 17.5%, from 2012 to 2013. They’ve blown so many other forecasts, they are probably due to be correct.

  5. But our recovery is significantly stronger than the EU or the UK (which have slipped into a double-dip recession) for the current financial crisis, which seems more relevant. Also, the countries you listed had the benefit of having their financial crises during periods of otherwise strong global economic performance, during which they could (and did) devalue their currency to increase exports and secure big loans from the IMF and US. We don’t really have that option – the entire world is hurting economically (even China is slowing down and suffering from inflation).

    This is really a meaningless comparison.

  6. President Obama in Roanoke Virginia July 13, 2012 ‘If You’ve Got a Business — You Didn’t Build That. Obama to Joe the Plumber, “I want to spread the wealth around.” Obama: “I chose my friends carefully. The more politically active black students, the foreign students, the Chicanos, the Marxist professors.” ~ Barack Obama (Dreams From My Father.) Obama, Commie mother, commie father, commie grandparents, commie mentor, commie friends …… commie Barack. Not too difficult to figure this out.
    Election2012 Capitalism or Socialism. Your choice.

  7. “So is the U.S. headed for a Lost Decade (or more) of weak growth, too?”

    We certainly will if Obama remains in charge. Obama is even following the same wrong headed policies as japan, with worthless stimulus follwed by more worthless stimulus, and continuing the subprime loans that started the whole mess.

    • Derp Derp de Derpidee Dooo …

      That bad black man in the White house it was all his fault!! Booo hoooo!!

      The only “wrong headed” policies were instituted by the Bush administration when the deregulated everything, slashed all taxes for the rich and wealthy. What has that done? Where are the “job creators” right now? What are they doing?

      Be specific about the “wrong headed” policies. Can you cite them, are there any specific bills the President was responsible for? Any legislation he pushed other than the only piece any conservative knows “Obamacare” which was a product also of congress.

      What would you have done Richard40? Cut taxes to the wealthy again … increased tax on the poor and decreased it again on the wealthy? So they could take more of their money and invest it in China? Allow corporations to off shore more jobs and give them tax credits for that??

      You have no clue about what your talking.

      I can see nothing but racisim and ignorance here as with most of America.

      Most conservatives are lining up behind the forces which are doing most to undermine and destroy America. The Koch brothers, huge business that wants to continue to off shore jobs, the ultra wealthy who want to pay nothing in tax and will do literally anything to accomplish that.

      Meanwhile the middle class has all but evaporated. The American dream is dead and half the country has fallen for the big business line (thanks largely to big business co-opting social issues to be given carte blanch on tax and economic issues by the Republican party) and the other half of America has given up.

  8. Mexico has come out from ugly economic crises, not once, or twice, but three times, by following IMF and WB counsel, in less than 3 years inspite our faulty legal system; it requires fiscal discipline, purpose and leadership

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