Sunday, August 19, 2012

UK: US economic recovery

PJ:  What this article draws attention to is the differences between President Obama and candidate Romney on handling the economy.  What needs to be thrown into the mix is how Congress has worked to help in the recovery effort.  During Reagan's time in office, while debates were loud, compromise allowed the government to actually help the private sector.  In those days, after the debate, Congree actually got things done.  Today's Congress has no desire to get things done and compromise is a dirty word.  Republicans have signed pledges and have stated publicly that their sole goal since the 2008 election is to make Obama a one-term president.  And what better way to ensure he loses his job than to do everything in their power to stall the recovery and plant the blame firmly at his feet. 

The Economist

The economy

No miracle cure

Bucking up this recovery is harder than it was in the past

IF THERE is a theme to the American presidential campaign, it may be: “Imagine the alternative”. President Barack Obama’s campaign will argue that his actions prevented an economic catastrophe. Mitt Romney, by contrast, will claim that Mr Obama’s missteps frustrated the strong recovery that should have followed so deep a downturn. America, Mr Romney recently claimed, “should be seeing 200-, 300-, 400,000 jobs [added] a month to regain much of what has been lost. That is what normally happens after a recession, but under this president we have not seen that kind of pattern.”

Growth has clearly been tepid. The American economy managed just 1.5% annualised GDP growth in the second quarter, down from 2% growth at the start of the year. Hiring is merely creeping along. On August 3rd the Labour Department estimated that American employers added 163,000 jobs in July, better than the 73,000 monthly average in the second quarter but slower than the promising pace earlier in the year, when firms added more than 225,000 jobs a month.
How does this compare with other recoveries of recent decades? Output has grown 6.7% since the recession’s official end in June 2009, and employment is up 2.1%. That is a shadow of the rebound of the early 1980s, when real output grew 18.5% in the first three years of recovery and employment soared by 11.1% (see chart). But no recovery since has been anything like as strong as that. On employment, Mr Obama’s recovery is more robust than his predecessor’s, though there are many more jobless workers now to soak up.

Read it at The Economist:

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