When will the recession end?

[muon2]

Opebo, your percentage numbers would have more meaning if they were inflation adjusted. Inflation was alive and well in 1976-1978. Real percentage growth might have been anemic or negative.

I think he did use real growth, the first percentage is nominal, the second real?  Or is he fooling around with them?

Absolutely correct, bullmoose.  Sorry, Torie, that my labelling and columns were a bit off, but yes, the first figure is nominal, and the second 'real' GDP growth.  Real GDP growth was quite strong in 76, 77, and 78.  Those were great years for american workers.

My apologies Opebo. I was just having a senior moment - your chart upon review was sufficiently lucid to cause  me to pen  the first bit of this sentence.

I agree that the chart was accurate, but the four year stretch from 1976 through 1979 wasn't quite better than anything since. I used the tables for annual and quarterly real GDP as maintained by the Bureau of Economic Analysis. That stretch had a total growth of 20.00% over four years. The period from 1983 through 1986 had a growth of 20.70%. It is true that no four year period in the 90's beat that. For comparison, Clinton's best years were from 1996 through 1999 and only reached 17.91%.

[muon2]

Opebo, your percentage numbers would have more meaning if they were inflation adjusted. Inflation was alive and well in 1976-1978. Real percentage growth might have been anemic or negative.

I think he did use real growth, the first percentage is nominal, the second real?  Or is he fooling around with them?

Absolutely correct, bullmoose.  Sorry, Torie, that my labelling and columns were a bit off, but yes, the first figure is nominal, and the second 'real' GDP growth.  Real GDP growth was quite strong in 76, 77, and 78.  Those were great years for american workers.

My apologies Opebo. I was just having a senior moment - your chart upon review was sufficiently lucid to cause  me to pen  the first bit of this sentence.

I agree that the chart was accurate, but the four year stretch from 1976 through 1979 wasn't quite better than anything since. I used the tables for annual and quarterly real GDP as maintained by the Bureau of Economic Analysis. That stretch had a total growth of 20.00% over four years. The period from 1983 through 1986 had a growth of 20.70%. It is true that no four year period in the 90's beat that. For comparison, Clinton's best years were from 1996 through 1999 and only reached 17.91%.

On the other hand, if you use average annual percentage increase in jobs by President as your barometer,  then for the last 85 years every Democratic President beats every Republican President. The worst 3 are Hoover, Bush 43, and Bush 41.

That's a bit deceptive. If you want to compare job creation on an even basis then you should look at growth over a four-year term. That avoids averaging effects for two term presidents compared to one term presidents. With that measure, Reagan's 2nd term exceeds either of Clinton's terms or the Kennedy/Johnson term.

[muon2]

I agree that the chart was accurate, but the four year stretch from 1976 through 1979 wasn't quite better than anything since. I used the tables for annual and quarterly real GDP as maintained by the Bureau of Economic Analysis. That stretch had a total growth of 20.00% over four years. The period from 1983 through 1986 had a growth of 20.70%. It is true that no four year period in the 90's beat that. For comparison, Clinton's best years were from 1996 through 1999 and only reached 17.91%.

Still, though, I think the most interesting point is that 1976-1979, years that are historically poo-pooed, and viewed by many forumites as 'bad years', where in fact better than any period of the 1990s, the 2000s, and as good as even the best period of the eighties, but with out the severe downward pressure on working class incomes occasioned by Reaganomics.

The point is, really that the late seventies, far from being an argument against Keynesianism, are yet another confirmation of its preferrability for most people.

I think the reason that the 70s aren't looked upon favorably is that the recessions that bracketed that period were not only ones of sluggish growth, but were also marked by high inflation. Workers wages were not generally indexed for inflation, so even those that kept their jobs had serious erosion of their purchasing power. The space economy also took a big hit in the late 70's as highly trained engineers and scientists had to leave the field. Many had to take jobs for which they were overqualified (eg. rocket scientists driving cabs in LA), and this had the effect of pulling down disposable income in that sector of workers.

[muon2]

I think the reason that the 70s aren't looked upon favorably is that the recessions that bracketed that period were not only ones of sluggish growth, but were also marked by high inflation. Workers wages were not generally indexed for inflation, so even those that kept their jobs had serious erosion of their purchasing power. The space economy also took a big hit in the late 70's as highly trained engineers and scientists had to leave the field. Many had to take jobs for which they were overqualified (eg. rocket scientists driving cabs in LA), and this had the effect of pulling down disposable income in that sector of workers.

Very interesting post, muon, mostly due to your reference to the 'space economy' - I had never heard of such a thing before.  One wonders how many people are employed by this.

As for erosion of purchasing power, yes, this did occur in some cases in the 70s, but keep in mind that a much higher percentage of workers were in unions at that time, and of course unions ensured that cost of living increases were provided.  Working class incomes eroded far more in the 1980s than in the 70s.

The federal investment in the space race was significant. In a number of areas this spawned related industries to serve the space program. There was a supply and service chain that included the beginning of the high-tech industry. This sector was hit hard when the feds largely shut down the program in the late 70's.

In the 70s the percentage of private-sector union workers was in the low 20's and began their drop into the teens starting in 1979. That is the usual marker of change in working-class income -- a full two years before Reagan took office and more like 3-4 years before his policies became effective. By early 1984 the declines in union membership had stabilized.