Measuring the Bush Recession
As the American economy plunges deeper into crisis, the conservative chattering classes are hoping for a replay of their 2001 blame game. Having successfully perpetuated the myth that President Bush "inherited a recession" from Bill Clinton, right-wing mouthpieces from Rush Limbaugh to Fred Barnes began blaming Barack Obama for the Bush recession literally within hours of his election. But as a quick glance at the data shows, across virtually economic indicator from GDP, unemployment and consumer confidence to home prices, foreclosures and manufacturing output, ownership for this mushrooming economic calamity squarely belongs to George W. Bush.
Gross Domestic Product. U.S. GDP shrank by 0.3% in the third quarter (July through September), a decline which followed the downward revision of the Q2 number from 3.3% to 2.8%. But while "recession" is traditionally defined as two consecutive quarters of GDP contraction (which is almost certain to occur), the quarterly Survey of Professional Forecasters by the Federal Reserve Bank of Philadelphia concluded that the United States entered a recession in April.
Recession at the State and Local Level. While there is debate as to whether or not the United States has technically slipped into a recession, at the state and local level there is no doubt at all. According to Moody's Economy, by the end of September 30 states were in recession, up from just five in March. 19 more states were deemed "at risk." (Only Sarah Palin's petro-state of Alaska was forecast to experience economic growth.) 276 of 380 metropolitan areas measured by Moody's had also sunk into recession. Combined with the downward spiral of home prices, these regional economic contractions are having a devastating impact on state and local tax revenue - and government services.
Unemployment. In October, the American economy shed 240,000 jobs, catapulting the losses for the year to 1.2 million. At 6.5%, the unemployment rate hit a 14-year high. The percentage of the adult population now working dropped to 61.8%, its lowest level in 15 years. The Philadelphia Fed survey forecast 222,000 more lost jobs per month through the end of the year. With some analysts now predicting unemployment will hit 8% by the middle of 2009, President Bush's reversal on extending jobless benefits could not come a moment too soon.
Jobless Claims. Of course, the corollary to skyrocketing unemployment is an explosion of new jobless claims. The Labor Department today released figures showing new unemployment claims jumped to 542,000 last week, a 16-year high. First-time jobless claims have now remained above the 400,000 for 17 straight weeks.
