Reporting On Economy – 1996 & 2008


Now this is interesting, but not surprising:

It’s the Politics, Stupid:

Comparing Labor Market Data in 1996 and 2008

Democrats on the Economy in 1996:

“Our economy is the healthiest it has been in three decades.” (President Bill Clinton, State of the Union Address, January 23, 1996)

Democrats on the Economy in 2008:

“The bottom line is that this administration is the owner of the worst jobs record since Herbert Hoover.” (Senator Charles Schumer, Press Release, March 7, 2008)

Key Labor Market Statistics in 1996 and 2008
March 1996 March 2008
1. U.S. Unemployment Rate 5.5% 5.1%
2. Number of Long-Term Unemployed 1.33 million 1.28 million
3. Average Weeks Unemployed 17.3 weeks 16.2 weeks
4. Median Weeks Unemployed 8.3 weeks 8.1 weeks
5. Not in Labor Force because discouraged over job prospects 451,000 401,000
6. Democrats calling for Extended Unemployment Benefits? No Yes
7. President’s Party Affiliation Democrat Republican

Now it’s true that there are some bad signs in the economy with the subprime debacle going on but over all the picture looks little different from 1996…the biggest difference in the reporting of it being that a Democrat was in office compared to a Republican.

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Recessions, aka a down turn have to technically have to happen after every bubble. Why, because a bubble has a slope going up and a slope going down. Growth is being compared to itself. That’s why one has to look back and not forward to see if one is in a recession. If there was no downward slope (viewed as negative growth) in a bubble then it’s an upperward slope and technically there is no bubble till the downward slope. These kinds of resessions are just trying to find the natural growth of the economy. It’s like a millionaire finding $50 and then spending it. He was richer and now he is poorer but he still has his million(s).

A bad recession is when the line is flat and goes negative. In other words a stagnant economy went downhill. This is where whole towns and cities go belly up and where the guy working at a place for 20 years loses his job an he is unable to find another one. The economy would have to fall below the level before the bubble to achieve this kind of pain. Nobody is expecting that. This economy is suppose to drop 3% for this year and the U.S. is expected to grow over 3% next year.