Saturday, July 07, 2012

The So-Called Recovery in One Chart

Greg Mankiw posts the following chart without a single word of explanation.

Because no caption is needed for yet another product of SCOAMF Industries™.


Truman North said...

Scoamf... Epic

Anonymous said...

What does it look like if you show where 0% and 100% are? Probably a lot less dramatic then. Oh, but would that ruin the whole purpose of the chart? The propaganda purpose?

Joe Salvati said...

You miss the point. You don't need to show 0 and 100. The point is that the labor force participation rate is lower than it has been in decades. If it was the same as before the start of the recession the actual unemployment number would be about 7 points higher.

Mandragoran said...

Right, Joe, if Anomalous wants to change the scale, and re-label the axes, maybe change the coordinate system, he can make the graph look different, but he can't make it look good:-( The partial % unemployment may be good for something, but this one shows the grim reality: there are a lot of people who used to have jobs and do not have them now. FDR's deficit spending didn't get us out of the great depression, and O's $trillions haven't helped us get out of this one. No more years!

Mandragoran said...

I'm reading an interesting book, The Politically Incorrect Guide to the Great Depression. It says a lot about the failure of FDR's excessive spending, and makes a good case for why we are not getting out of this one. 2009 was a lot like 2001, a new president finds a recession waiting, like a cow-pie on his desk. We got out of the 2001 recession, and we are not getting out of this one. Let's give Obama that single term presidency he said he would deserve if he didn't help us do better.

Nemo Gneiss said...

What would be instructive to Anonymous would be to superimpose data from 1980-1990.

TeamAmerica said...

Why go back to 1980 - 1990? Why not look at 1993- 2001? Because that wouldn't validate your party-biased implication either, would it? Maybe a better idea would be to look at 2002 - 2010, where policies were largely of the GWB admin. Also, let's point out that the grey shaded area indicates a U.S. recession, which is an outcome of previous policies and economic conditions. Nobody walks into the White House flipping switches and changing the nation, policies take time to draft, redraft, legislate, and implement. This graph doesn't represent effects of President Obama's executive term until 2010 at best. This is a long-term mess we Americans have built together over many years. We can't scapegoat the current administration to get out of it.

directorblue said...

@TeamAmerica - We have never seen a recovery as poor as this one precisely because of the policies of Obama.

Small businesses are terrified of Obamacare's penalties. Larger businesses are getting slammed by Dodd-Frank and a rogue EPA that has effectively shut down a good chunk of America's energy sector.

No business knows what the tax situation will be next year -- that's why they're not hiring.

As for the housing meltdown: please read my illustrated synopsis entitled The Fannie Mae Testimony That Will Make Your Blood Boil.

Blaming Bush for Clinton's HUD policies that touched off the mortgage meltdown has no basis in fact.

JimmyJ said...

Firstly, Anonymous is right.

I don't need a graph to tell me that Obama is a communist.

Nevertheless, the graph is skewed. Zero doesn't need to be the origin, because we've never had zero employment; but without some basis for the origin -- this graph is intentionally deceptive.

Or is it? The only reason for such tight ranges on a graph like this is to zoom in on a particular time frame (as when looking at a stock price).

The graph shows that the largest drop in employment begins 2008 and ends in early 2009. During President Bush the RINO's tenure.

This does not mean that Bush caused it. Barney Frank and the CRA caused it.

And Obama is STILL a communist.

But this graph shows nothing negative against Obama, ... IF it can legitimately be said to show anything meaningfull at all -- which it doesn't.

Used to pinpoint a specific drop in employment, it defends Obama.

Used in any other way (like without a word being said to describe it) it is a deceptive graph.

You can get the same graph, if you bar graph the amount of cash in your wallet and my wallet, if I have $63 and you have $58.

Such a bar graph, without a zero origin, would make it appear (to dolts) as if the difference in pocket money were near 100%, when the real difference is less than 10%.

It's a shady (not shaded) graph.

JimmyJ said...

Actually, the graph isn't all that deceptive.

UNLESS it's presented without a word of explanation.

Mankiw uses the bare minimum ... ONE word.

At first glance, the graph appears to be a comparison of employment under Bush vs. employment under Obama, with a focus on the drop in employment during 2008-2009. Mankiw's purpose has nothing to do with that (I hope).

Mankiw's one word is "Recovery". That is, the portion of the graph after the low point in late 2009.

Presumably, the only reason to include data from months and years prior is to show what a normal economy looks like, employment-wise.

A normal, slightly growing, economy looks like the portion from 2004 - 2007; where employment rises about 1% over three years.

A "Recovery" is NOT a normal economy. A "Recovery" is a rebound from a drop; and, thus, employment should grow at a rate far greater than a "normal" economy.

The point of the graph (I think; I hope) is that during the period that the Obama regime has been calling a "Recovery"; employment is almost dead flat at the bottom of the recessionary dip for three years. Worse than a "normal" economy, and far, far worse than anything that could legitimately be called a "Recovery".

IF this is Mankiw's intent; then the graph is NOT deceptive.

IF used for almost any other purpose, the graph IS deceptive.

Which is why an explicit explanation as to why the graph looked like it did; why the range (X and Y) were what they were; and what one should take from the graph; would have been good form.

One word in a title is pretty weak.

Especially given the obvious misunderstanding and misuse of it by just about everybody whose seen it or commented on it (including me).