After first considering the issue in April, the National Bureau of Economic Research (NBER) today announced the Bush recession is officially over. But given persistently high levels of unemployment and poverty, more interesting than the NBER's conclusion that "a trough occurred in June 2009" is the parties' reactions to it. While President Obama and the Democrats continue to insist the economic downturn isn't over, Republicans in 2008 pretended it never began.
As the data show, the Obama stimulus and other federal programs restarted GDP growth by the third quarter of 2009. Under the NBER's technical definition, the Bush recession which began in December 2007 ended in June 2009, making it at 18 months "the longest of any recession since World War II."
In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The trough marks the end of the declining phase and the start of the rising phase of the business cycle. Economic activity is typically below normal in the early stages of an expansion, and it sometimes remains so well into the expansion.
Which is precisely why President Obama continued to urge new recession-fighting programs even after, as McCain economic adviser Mark Zandi concluded in August, federal action "prevented the Great Recession from becoming Depression 2.0." While Republicans this summer opposed extended unemployment benefits, additional aid to cash-strapped states and expanded credit for small businesses, Obama two weeks ago proposed a host of new measures to boost job creation and economic growth. "But the truth is," the President admitted, "progress has been painfully slow."
For their part, Republicans will doubtless cite the NBER report as proving their case for inaction. After all, aside from upper class tax cuts at a time of record income inequality and growing poverty, the GOP has offered only unprecedented obstructionism in response to their economic calamity that unfolded under George Bush's watch. Which isn't very surprising, since his spokesmen denied it had begun in the first place.
For years, Republicans wrongly blamed the first Bush recession, which NBER stated began in March 2001, on Bill Clinton. The second, they later insisted, nobody saw coming.
Just days before Barack Obama took the oath of office, Vice President Dick Cheney deflected blame for the calamity on Wall Street and the deepening recession by declaring, "nobody anywhere was smart enough to figure that out" and "I don't know that anybody did." Then, Cheney magically converted failure into a virtue and ignorance into a shield in explaining away the Bush presidency:
"No, obviously, I wouldn't have predicted that. On the other hand I wouldn't have predicted 9/11, the global war on terror, the need to simultaneous run military operations in Afghanistan and Iraq or the near collapse of the financial system on a global basis, not just the U.S."
There was, of course, a legion of analysts, journalists and even some members of the Bush administration warning about mortgage-backed securities and the collapse of the housing market. But as ThinkProgress documented, White House officials throughout 2008 denied the recession already underway since the previous December. It was the hapless Tony Fratto who offered up the signature Bush sound bite on January 8, 2008:
"I don't know of anyone predicting a recession."
But he had plenty of company. That same month, Vice President Cheney argued, "We don't believe we're going to have a recession though." In February 2008, President Bush declared, "I think the experts will tell you we're not in a recession." Two months later on April 22, 2008, Bush again insisted:
"First of all, we're not in a recession."
During the 2008 presidential campaign, John McCain and friends kept up the façade. In April, McCain claimed the nation's economic problems were all mental, telling Neil Cavuto, "a lot of our problems today, as you know, are psychological." In July, his trusted economic adviser Phil Gramm called it a "mental recession" and slandered Americans as a "nation of whiners." (In response to the firestorm of criticism which ensued, even John McCain was forced to acknowledge, "Certainly in the minds of millions and millions of Americans, we are in a quote recession.")
Literally within hours of his election, conservatives deemed the economic calamity "the Obama recession." But as late as October 2008, weeks after the implosion on Wall Street, White House press secretary and future Fox News regular Dana Perino proclaimed, " I don't think anybody could tell you right now if we're in a recession or not."
And still are, as Americans struggling to find jobs and pay mortgages, if not the NBER, will attest. Heading into the November midterm elections, Democrats want to do something about an economy they admit is still floundering, that same Bush recession Republicans denied ever began. And while voters may nevertheless reward the GOP at the polls, they still pin the blame squarely on George W. Bush.
(This piece also appears at Perrspectives.)