Look Smaller

Posted by Paul

Brad DeLong reads President Bush's speech at the 2004 Farm Progress Show:

I'm running because I know there's more to do to keep this economy strong. We've been through a lot together when it came to this economy. We've been through a recession. We've been through corporate scandals. The terrorist attack hurt our economy. And yet, we've got an economy that's growing. We've overcome the obstacles. We've overcome them because we've got great workers. We've overcome them because we've got great farmers. We've overcome those obstacles because the entrepreneurial spirit is strong and the small business sector of this economy is alive and well. And I believe we've overcome those obstacles because of well-timed tax cuts.... We helped our small businesses. We helped them purchase equipment. This time, the check was actually in the mail, too. Because we acted, our economy has been growing at rates as fast as any in nearly 20 years...

Brad then wonders what the heck the Prez could be thinking? "..growing at rates as fast as any in nearly 20 years..."?? Huh?

In the most recent quarter, the American economy grew at a rate of 2.8% per year--a faster rate than at any time in the pre-Bush era since... the second quarter of 2000, when the economy grew at 6.4%. Maybe he's looking at a longer time span.

In the most recent two quarters, the American economy grew at a rate of 3.6% per year--a faster rate than at any time in the pre-Bush era since... the two quarters ending in the second quarter of 2000, when the economy grew at 3.7%. Maybe he's looking at a longer time span.

In the most recent three quarters, the American economy grew at a rate of 3.8% per year--a faster rate than at any time in the pre-Bush era since... the three quarters ending in the second quarter of 2000, when the economy grew at 4.9%. Maybe he's looking at an even longer time span.

In the most recent four quarters, the American economy grew at a rate of 4.7% per year--a faster rate than at any time in the pre-Bush era since... the four quarters ending in the second quarter of 2000, when the economy grew at 4.9%. Maybe he's looking at an even longer time span.

In the most recent five quarters, the American economy grew at a rate of 4.6% per year--a faster rate than at any time in the pre-Bush era since... the five quarters ending in the fourth quarter of 1999, when the economy grew at 5.0%. Maybe he's looking at an even longer time span.

In the most recent six quarters, the American economy grew at a rate of 4.1% per year--a faster rate than at any time in the pre-Bush era since... the six quarters ending in the second quarter of 2000, when the economy grew at 4.4%.

Over his term so far, the economy has grown at an average rate of 2.5% per year. That's a slower rate than economic growth during... Clinton II, Clinton I, Reagan II, Reagan I, Carter (yes, really), Nixon I, Johnson, Kennedy-Johnson, Eisenhower I, and Truman. The economy has grown more slowly in only three presidential terms in the last 13: Bush 41, Nixon-Ford, and Eisenhower II.

Professor DeLong needs to look smaller. Here's Professor Krugman:

In the third quarter of 2003, as everyone knows, real G.D.P. rose at an annual rate of 8.2 percent.

Krugman wrote this before the revised numbers revealed 7.4 percent growth. At any rate, he says "as everyone knows" because that was all anyone in the Bush camp could talk about last December. Krugman, in the linked article, explains why that growth was not everything it was cracked up to be.

Nonetheless, I'm guessing that Bush's speechwriters don't understand that while we did have 7.4 percent growth in the 3rd quarter of 2003, the number 7.4 is meaningful only because of its relation to the really meaningful statistic, annual growth.

If we are looking at quarterly numbers, then, yes, we've seen "rates as fast as any in nearly 20 years." But grownups know what quarterly numbers are all about. The Bushies are not grownups.

(Fixed bad link)

Posted by Paul at September 2, 2004 02:57 PM