The video below features economists Russ Roberts and John Taylor, both of the Hoover Institution. It offers a quick and easy way to learn some real clear economics and to understand what is happening, and what is not happening, in the economy today and why the “recovery” from the deep recession that technically ended in June of 2009 has been so disappointing and lackluster. The comparison to other deep recessions and the quick recoveries that followed, from the 1890’s to the current recovery, shows that something very different is occurring for the first time in U.S. economic history, with the possible exception of the Great Depression.
Watch the video and decide for yourself, but for my money the reason this recovery is so slow and anemic is the same reason the 1932-1941 Depression lasted so long — namely, bad economic policies of the government. In the case of the Depression a world war came along and forced the government to abandon it’s disastrous New Deal polices, and that allowed the Depression to end.
The American people will have a chance on November 6th to end the current economic malaise by ending Obama’s sojourn in the White House and thus end the “bad deal” know as Obamanomics. Ending Obamanomics will allow assets values to rise, employment to return to normal levels, and the economy to begin to grow again. It will be like loosening a noose and allowing the victim to breathe again.
The video is 12 minutes long and covers the following topics:
1) What is potential GDP? (0:52)
2) The economy never catches back up to trend (2:38)
3) The 1981 recession (3:16)
4) Is there a correct or potential level of GDP? (4:45)
5) A look at past recoveries (6:13)
6) Friedman and the Plucking Model (8:10)
7) A look at real growth rates in recoveries (8:59)
8) Employment and the recovery (10:20)