The Best Economy in 20 Years?

Economist Mark Weisbrot, in his weekly column (July 27, 2004):

"Our economy since last summer has been growing at the fastest rate in 20 years" said President Bush in a speech last week. The word went out from on high, and soon it began to spread: the fastest-growing economy in 20 years! A very important discovery for this election season, with voters none too pleased about the state of the economy. During a TV talk show (CNBC's Morning Call) on which I appeared, this claim was repeated to me.

Is it true? Well if you pick the right three quarters -- the first quarter of this year and the second half of last year, to be exact -- it is technically true. Over these three quarters the economy grew by 5.4 percent, which is faster than any other 9-month period in the past 20 years. But not by much. For the last 9 months of 1999, for example, the economy grew by 5.1 percent.

But why take 9 months? If we look at the last year, it's not any record at all. Similarly for the last two years. And since the recession ended in the last quarter of 2001, the economy has grown by 3.6 percent. This not bad, but not particularly strong growth for a recovery from a recession -- when the economy usually grows at a much faster than normal rate.

In the same speech Mr. Bush also bragged about the 1.5 million jobs created since last August. This impressive-sounding number also depends on a careful selection of time period. If we look at Mr. Bush's whole presidential term, the economy is still down more than a million jobs. Even the 1.5 million jobs created during Mr. Bush's selected ten months are a weak performance, barely enough to keep pace with the growth of the labor force.

The economy from here on will have to do better than even Mr. Bush's "brag period," just for him to avoid the record achievement of being the first president since the Great Depression to preside over a net loss of jobs for the country....