Enough With the Doom and Gloom: It's a Recession, Not a 'Catastrophe'

In just three weeks we've gone form Hopenchange to grim prognostications of calamity and catastrophe, all so Barack Obama could claim a shallow victory and shove a trillion dollar boondoggle down out throats.

Well, if Obama knew anything about history, he'd know he's lying to the public, as Alan Reynolds notes.

PRESIDENT Obama, writing in The Washington Post, said, "By now, it's clear to everyone that we have inherited an economic crisis as deep and dire as any since the days of the Great Depression." But how would we know if and when this crisis is really more "deep and dire" than others?

Many may believe we're in the worst recession since the Great Depression, if only because politicians and the press keep repeating that claim. But we need to compare some facts to discern whether this recession is (or will be) "worse" in some sense than those of 1973-75 or 1981-82.

Congressional Budget Office Director Douglas Elmendorf told the House Budget Committee that if the economy is still contracting by mid-year, then this recession will be longer than the 1981-82 and 1973-75 downturns, each of which lasted 16 months. Yet this recession was quite mild until last September. And the severity and human discomfort of downturns can't be measured by their duration.

A wise adviser to President John Kennedy, Arthur Okun of Yale, devised the "misery index" to gauge the pain of economic crisis - a measure that simply adds together the unemployment rate and the inflation rate. It hit 22 percent in June 1980, during an inflationary recession that preceded the Fed's disinflationary squeeze of 1981-82. The misery index was nearly as bad in January 1975, at 19.9 percent.

Assuming inflation was close to zero this January, the misery index would have been roughly the same as the unemployment rate, or 7.6 percent. By this standard, we have a very long way to go before the economy feels nearly as miserable as it did in 1975 or 1980.

Sadly it appears a good portion of starry-eyed Obama supporters weren't even born in 1980, so how would they have any recollection, especially when history as it comes to failed Democrat presidents isn't even taught?

Unfortunately, plenty of Democrats rushing to push this crap sandwich through were in Congress back then and they clearly haven't learned their own history.

An average of 55 forecasters in the Jan. 15 Wall Street Journal survey expect real GDP to fall by another percentage point (a 2.1 percent drop in total) before recovering in the third quarter. If they're right, this would be just the third deepest postwar recession by that broad measure.

A recession to be sure. A catastrophe? Far from it.

Maybe Obama is just being introspective and sees a potential catastrophe coming. His own approval rating.

Even worse, if we're on the hook for $9.7 trillion, well, that would be catastrophic.

Thanks to protein wisdom and Gateway Pundit for the links.