Worse Post World War II Recession Followed By Worse U.S. Economic Recovery in 80 Years Since Great Depression of 1933 — Obama’s Economic Policy Mistakes Causing Increased Uncertaintly and Lower Economic Growth and Job Creation — Real GDP Gap Continues — No Real Economic Recovery! — Videos

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There Will Be No Economic Recovery. Prepare Yourself Accordingly.

The Economic Recovery: A Novel Perspective from Ed Leamer (The Numbers Game with Russ Roberts) mono

Published on Mar  7, 2013

Why has the current recovery from the Great Recession been so mediocre? Ed Leamer of UCLA points out that the last three recessions have all had mediocre recoveries of both output and employment. His explanation is that changes in the manufacturing sector have changed the pattern of layoffs, recalls and hiring during recessions and recoveries. The conversation concludes with a discussion of the forces driving the changes in the labor market and the implications for manufacturing.
1) Why the last three recessions all look different (1:44) 2) Employment growth for last eight recessions (4:12) 3) Why have the last three recessions been so different? (6:13) 4) The jobs cycle in manufacturing (8:52) 5) Excess capacity in construction has created a lag (10:33) 6) Manufacturing output versus manufacturing employment (11:14) 7) What’s the solution to the downturn? (12:20)
LINKS TO DATA REFERENCED — 1. Real GDP Growth From Peak to Peak Charts: FRED — “Real Gross Domestic Product, 3 Decimal (http://research.stlouisfed.org/fred2/…). Note: Calculated using (X1-X0)/(X0), where X0 — recession peak quarter
2. Manufacturing Employment Chart: FRED — “All Employees: Manufacturing”(http://research.stlouisfed.org/fred2/…)

The Numbers Game with Russ Roberts — The Economic Recovery (Part 1)

Published on Sep  5, 2012

According the National Bureau of Economic Research, the US economy recovered from the recession at the beginning of the summer of 2009. Yet the recovery has been disappointing when compared to other recoveries. In this episode of the Numbers Game, John Taylor of Stanford University talks with host Russ Roberts about the nature of the recovery. How does it compare historically to other recoveries? How can we measure the pace of the recovery? The conversation ends with a discussion of possible explanations for why the recovery has been disappointing. 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) LINKS TO DATA & PAPERS REFERENCED – 1. 2008-09 and 1981-1982 Recession & Recovery Charts: Real GDP (GDPC1) downloaded from FRED 7/13/12, taken from BEA.gov – http://research.stlouisfed.org/fred2/… Potential GDP (GDPPOT) downloaded from FRED 7/13/12, taken from CBO.gov – http://research.stlouisfed.org/fred2/… 2. 1907-08 and 1893-94 Recession & Recovery Charts: GDP data from NBER, compiled by Nathan Balke and Robert Gordon with adjustments by John Taylor for comparability with earlier charts –http://www.nber.org/data/abc/ Potential GDP calculations by John Taylor using a Hodrick-Prescott trend. 3. The Plucking Model Working Paper: The “Plucking Model” of Business Fluctuations Revisited by Milton Friedman Working Papers in Economics, E-88-48 — Hoover Institution, Stanford University http://hoohila.stanford.edu/workingpa… 4. Growth Rate of Real GDP Chart: Growth Rate calculated from Real GDP (GDPC1) downloaded from FRED 7/13/12, taken from BEA.gov – http://research.stlouisfed.org/fred2/… 5. Change in the Percentage of the Population that is Working Chart: Employment-Population Ratio (EMRATIO) downloaded from FRED 7/13/12, taken from BLS.gov – http://research.stlouisfed.org/fred2/…

The Numbers Game with Russ Roberts — The Economic Recovery (Part 2)

By historical standards, the current recovery from the recession that began in 2007 has been disappointing. As John Taylor of Stanford University’s Hoover Institution and the Department of Economics argues in Part 1 of this discussion on the economy, GDP has not returned to trend, the percent of the population that is working is flat rather than rising, and growth rates are below their usual levels after such a deep slump.

In this episode, Taylor and Number’s Game host Russ Roberts discuss possible explanations for the sluggish recovery: the ongoing slump in construction employment, the effect of housing prices on saving and spending decisions by households, and this recovery’s having been preceded by a financial crisis. Taylor rejects these arguments, arguing instead that the sluggish recovery can be explained by poor economic policy decisions made by the Bush and the Obama administrations.

1) On the argument that there are structural problems in the labor market (0:25)
2) Comparisons to the 1981 recession (2:16)
3) Is this recession special because it followed a financial crisis? (2:46)
4) What can the Great Depression tell us? (3:55)
5) Why is the current recovery so mediocre? (5:32)


1. Construction Sector Employment Chart:
Bureau of Labor Statistics- Series CES2000000001, Seasonally Adjusted

2. S&P/Case-Shiller Home Price Indices Chart:
S&P Dow Jones Indices and Fiserv 9-25-12 – http://www.standardandpoors.com

3. Personal Saving as a % of Disposable Income Chart:
BEA NIPA Table 2.1 line 36

4. 2008-09 and 1981-1982 Recession & Recovery Charts:
Real GDP (GDPC1) downloaded from FRED 7/13/12, taken from BEA.gov – http://research.stlouisfed.org/fred2/…
Potential GDP (GDPPOT) downloaded from FRED 7/13/12, taken from CBO.gov – http://research.stlouisfed.org/fred2/…

5. ‘Deep Recessions, Fast Recoveries, and Financial Crises: Evidence from the American Record’ by Michael D. Bordo and Joseph G. Haubrich – http://media.hoover.org/sites/default…

6. 1893-94 and 1907-08 Recession & Recovery Charts:
GDP data from NBER, compiled by Nathan Balke and Robert Gordon with adjustments by John Taylor for comparability with earlier charts – http://www.nber.org/data/abc/. Potential GDP calculations by John Taylor using a Hodrick-Prescott trend.

7. 1933-36 Great Depression & Recovery Chart:
GDP data from NBER, compiled originally by Nathan Balke and Robert Gordon – http://www.nber.org/data/abc/.

8. 1929-1940 Unemployment Rate (% of Labor Force) Chart:
Historical Statistics of the United States (Millennial Edition) – Table Ba470-477: Labor Force, Employment, and Unemployment, 1890-1990 – http://hsus.cambridge.org/HSUSWeb/toc…

9.  ‘An Empirical Analysis of the Revival of Fiscal Activism in the 2000s’ by John B. Taylor – http://www.stanford.edu/~johntayl/JEL…

The Numbers Game with Russ Roberts — The Economic Recovery (Part 3)

Here in part 3, Taylor argues that the slow pace of the recovery is due to poor policy decisions made by the Bush and Obama administrations that have increased the amount of uncertainty facing investors, consumers, and employers. Examples include the rising debt forecast, the fiscal cliff, expiring tax provisions, and quantitative easing. Taylor argues that the uncertainty surrounding these policies in the future along with increased regulation have held back the recovery.
1. Debt as a Percentage of GDP Chart: Historical debt data – http://www.cbo.gov/publication/21728. Future debt projections –  http://www.cbo.gov/publication/20776 and http://www.cbo.gov/publication/43288
2. Number of Provisions Expiring in the US Tax Code Chart: List of Expiring Tax Provisions – Prepared by the Staff of the Joint Committee on Taxation, various issues – https://www.jct.gov/publications.html….
3. ‘Measuring Economic Policy Uncertainty’ by Scott Baker, Nicholas Bloom and Steven Davis: http://faculty.chicagobooth.edu/steve…
4. An Era of Deregulation (?) Chart: Federal Register Historical Statistics (https://www.federalregister.gov/learn…) Notes: Dates based on calendar year; Excludes preliminary/unrevised pages, blank/skipped pages, and proposed rules pages
5. Number of Federal Workers Employed in Regulatory Activities Chart: Susan Dudley & Melinda Warren “Fiscal Stalemate Reflected in Regulators’ Budget: An Analysis of the U.S. Budget for Fiscal Years 2011 and 2012,”  TSA adjustment obtained from DHS Budget in Brief. http://wc.wustl.edu/files/wc/2012_Reg… and http://www.dhs.gov/xlibrary/assets/mg….
6. ‘Dodd-Frank Progress Report’ by Davis Polk: According to Davis Polk (a firm monitoring Dodd-Frank progress) – “Dodd-Frank Progress Report, November 2012” http://www.davispolk.com/files/Public…
7. Reserve Balances Chart: H.4.1 Federal Reserve statistical release (reserve balances with Federal Reserve Banks). One can also get data from FRED http://research.stlouisfed.org/fred2/…
8. ‘The 2009 Stimulus Package: Two Years Later’ by John B. Taylor: http://media.hoover.org/sites/default…
9. ‘An Empirical Analysis of the Revival of Fiscal Activism in the 2000s’ by John B. Taylor – http://www.stanford.edu/~johntayl/JEL…
10. Economic Benefits of the ’09 Stimulus Package Chart: Chicago Booth IGM Forum on the Economic Stimulus, 2/15/12 – http://www.igmchicago.org/igm-economi…. IGM Economic Experts Panel – http://www.igmchicago.org/igm-economic-experts-­panel
11. U.S. Misery Index Chart: Bureau of Labor Statistics – Unemployment Rate (http://www.bls.gov/webapps/legacy/cps… CPI-U (ftp://ftp.bls.gov/pub/special.requests/­cpi/cpiai.txt)

Economists Examine Potential for Longer Recession

Milton Friedman – Greed

Milton Friedman – Socialism is Force  

Milton Friedman – The role of government in a free society

Economics on One Foot




Background on Recession/Recovery in Perspective

This page places the current economic downturn and recovery into historical (post-WWII) perspective. It compares output and employment changes from the 2007-2009 recession and subsequent recovery with the same data for the 10 previous recessions and recoveries that have occurred since 1946.

This page provides a current assessment of ‘how bad’ the 2007-2009 recession was relative to past recessions, and of how quickly the economy is recovering relative to past recoveries. It will continue to be updated as new data are released. This page does not provide forecasts, and the information should not be interpreted as such.

The  charts provide information about  the length and depth of recessions, and the robustness of recoveries.

Post-WWII Recessions

The Business Cycle Dating Committee of the National Bureau of Economic Research determines the beginning and ending dates of U.S. recessions. http://www.nber.org/cycles.html

        It has determined that the U.S. economy experienced 10 recessions from 1946 through 2006. The committee determined that the 2007-2009 recession began in December 2007 and ended in June of 2009.  Ending dates are typically announced several months after the recession officially ends. Read the June 2009 trough announcement by the NBER.

Length of Recessions

The 10 previous postwar recessions ranged in length from 6 months to 16 months, averaging about 10 1/2 months. The 2007-09 recession  was    the longest recession in the postwar period, at 18 months.

Depth of Recessions

The severity of a recession is determined in part by its length; perhaps even more important is the magnitude of the decline in economic activity. The 2007-09 recession was the deepest recession in the postwar period; at their lowest points employment fell by 6.3 percent and output fell by 5.1 percent.






For further information regarding treasury constant maturity data, please refer to:

http://www.federalreserve.gov/releases/h15/current/h15.pdf and http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/yieldmethod.aspx.

M1 Money Stock (M1)

2013-07-08:      2,504.2       Billions of Dollars                    Last 5 Observations

2013-07-01: 2,537.1
2013-06-24: 2,510.0
2013-06-17: 2,494.2
2013-06-10: 2,508.6

Weekly, Ending Monday, Seasonally Adjusted, Updated: 2013-07-19 6:26 AM CDT


Source: Board of Governors of the Federal Reserve System
Release: H.6 Money Stock Measures

M1 includes funds that are readily accessible for spending. M1 consists of: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) traveler’s checks of nonbank issuers; (3) demand deposits; and (4) other checkable deposits (OCDs), which consist primarily of negotiable order of withdrawal (NOW) accounts at depository institutions and credit union share draft accounts. Seasonally adjusted M1 is calculated by summing currency, traveler’s checks, demand deposits, and OCDs, each seasonally adjusted separately.

Velocity of M1 Money Stock (M1V)

2013:Q1:      6.474       Ratio                    Last 5 Observations

2012:Q4: 6.544
2012:Q3: 6.750
2012:Q2: 6.894
2012:Q1: 6.991

Quarterly, Seasonally Adjusted, Updated: 2013-06-26 9:01 AM CDT


Source: Federal Reserve Bank of St. Louis
Release: Money Velocity
Notes:Calculated as the ratio of quarterly nominal GDP (http://research.stlouisfed.org/fred2/series/GDP) to the quarterly average of M1 money stock (http://research.stlouisfed.org/fred2/series/M1SL).
Velocity is a ratio of nominal GDP to a measure of the money supply.  It can be thought of as the rate of turnover in the money supply–that is, the number of times one dollar is used to purchase final goods and services included in GDP.

M2 Money Stock (M2)

2013-07-08:      10,644.6       Billions of Dollars                    Last 5 Observations

2013-07-01: 10,653.4
2013-06-24: 10,573.2
2013-06-17: 10,594.5
2013-06-10: 10,590.3

Weekly, Ending Monday, Seasonally Adjusted, Updated: 2013-07-19 6:26 AM CDT


Source: Board of Governors of the Federal Reserve System
Release: H.6 Money Stock Measures

Notes:M2 includes a broader set of financial assets held principally by households. M2 consists of M1 plus: (1) savings deposits (which include money market deposit accounts, or MMDAs); (2) small-denomination time deposits (time deposits in amounts of less than $100,000); and (3) balances in retail money market mutual funds (MMMFs). Seasonally adjusted M2 is computed by summing savings deposits, small-denomination time deposits, and retail MMMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1.

Velocity of M2 Money Stock (M2V)

2013:Q1:      1.530       Ratio                    Last 5 Observations

2012:Q4: 1.538
2012:Q3: 1.568
2012:Q2: 1.579
2012:Q1: 1.588

Quarterly, Seasonally Adjusted, Updated: 2013-06-26 9:01 AM CDT



Calculated as the ratio of quarterly nominal GDP (http://research.stlouisfed.org/fred2/series/GDP) to the quarterly average of M2 money stock (http://research.stlouisfed.org/fred2/series/M2SL).
Velocity is a ratio of nominal GDP to a measure of the money supply.  It can be thought of as the rate of turnover in the money supply–that is, the number of times one dollar is used to purchase final goods and services included in GDP.

US Economic Crisis, Predictions For 2013

So Goes Detroit,Bernanke’s Gold Confession, Obama’s ACA Lies

Karl Denninger on Bernanke’s Last Stand and Unwinding Rehypothecation [PRIME INTEREST 45]

Uncertainty over the cost of new regulations is suppressing business investment & job creation.

Chairman of the Joint Economic Committee, Representative Kevin Brady, presents his opening statement to the committee and witnesses during the JEC hearing “Reducing Unnecessary and Costly Red Tape through Smarter Regulations” on June 26, 2013.

“We’re experiencing the worst economic recovery since WWII.”

CBS: “This Is The Worst Economic Recovery America Has Ever Had”

Obama’s Great Economic Recovery WHERE?

Treasury Yield Curve Methodology
Page Content

This description was revised and updated on February 26, 2009.

The Treasury’s yield curve is derived using a quasi-cubic hermite spline function. Our inputs are the Close of Business (COB) bid yields for the on-the-run securities. Because the on-the-run securities typically trade close to par, those securities are designated as the knot points in the quasi-cubic hermite spline algorithm and the resulting yield curve is considered a par curve. However, Treasury reserves the option to input additional bid yields if there is no on-the-run security available for a given maturity range that we deem necessary for deriving a good fit for the quasi-cubic hermite spline curve. For example, we are using composites of off-the-run bonds in the 20-year range reflecting market yields available in that time tranche. Previously, a rolled-down 10-year note with a remaining maturity nearest to 7 years was also used as an additional input. That input was discontinued on May 26, 2005.

More specifically, the current inputs are the most recently auctioned 4-, 13-, 26-, and 52-week bills, plus the most recently auctioned 2-, 3-, 5-, 7-, and 10-year notes and the most recently auctioned 30-year bond, plus the composite rate in the 20-year maturity range. The quotes for these securities are obtained at or near the 3:30 PM close each trading day. The inputs for the four bills are their bond equivalent yields.

Between August 6, 2004 and June 2, 2008, to reduce volatility in the 1-year Treasury Constant Maturity (CMT) rate, and due to the fact that there were no on-the-run issues between 6-months and 2-years, Treasury used an additional input to insure that the 1-year CMT rate was consistent with on-the-run yields on either side of it’s maturity range. Thus, Treasury interpolated between the secondary bond equivalent yield on the most recently auctioned 26-week bill and the secondary market yield on the most recently auctioned 2-year note and inputted the resulting yield as an additional knot point for the derivation of the daily Treasury Yield Curve. The result of that step was that the 1-year CMT was generally the same as the interpolated rate during that time period. As of June 3, 2008, the interpolated yield was dropped as a yield curve input and the on-the-run 52-week bill was added as an input knot point in the quasi-cubic hermite spline algorithm and resulting yield curve.

Between December 3, 2007 and November 7, 2008, due to Treasury’s discontinuance of 3-year notes, we added a composite rate in the 3-year range based on an average of off-the-run securities in that time tranche.  This composite was replaced on November 10, 2008 with the on-the-run 3-year note upon its reintroduction.

Treasury does not provide the computer formulation of our quasi-cubic hermite spline yield curve derivation program. However, we have found that most researchers have been able to reasonably match our results using alternative cubic spline formulas.

Treasury reviews its yield curve derivation methodology on a regular basis and reserves the right to modify, adjust or improve the methodology at its option. If Treasury determines that the methodology needs to be changed or updated, Treasury will revise the above description to reflect such changes.

Yield curve rates are usually available at Treasury’s interest rate web sites by 6:00 PM Eastern Time each trading day, but may be delayed due to system problems or other issues. Every attempt is made to make this data available as soon as possible.

Office of Debt Management Department of the Treasury



PERIOD                                                                     RECEIPTS                OUTLAYS    DEFICIT/SURPLUS (-)
+  ____________________________________________________________  _____________________  _____________________  _____________________

OCTOBER                                                                   163,072                261,539                 98,466
NOVEMBER                                                                  152,402                289,704                137,302
DECEMBER                                                                  239,963                325,930                 85,967
JANUARY                                                                   234,319                261,726                 27,407
FEBRUARY                                                                  103,413                335,090                231,677
MARCH                                                                     171,215                369,372                198,157
APRIL                                                                     318,807                259,690                -59,117
MAY                                                                       180,713                305,348                124,636
JUNE                                                                      260,177                319,919                 59,741
JULY                                                                      184,585                254,190                 69,604
AUGUST                                                                    178,860                369,393                190,533
SEPTEMBER                                                                 261,566                186,386                -75,180

YEAR-TO-DATE                                                          2,449,093              3,538,286              1,089,193


OCTOBER                                                                   184,316                304,311                119,995
NOVEMBER                                                                  161,730                333,841                172,112
DECEMBER                                                                  269,508                270,699                  1,191
JANUARY                                                                   272,225                269,342                 -2,883
FEBRUARY                                                                  122,815                326,354                203,539
MARCH                                                                     186,018                292,548                106,530
APRIL                                                                     406,723                293,834               -112,889
MAY                                                                       197,182                335,914                138,732
JUNE                                                                      286,627                170,126               -116,501

YEAR-TO-DATE                                                          2,087,143              2,596,968                509,825


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