Thursday, September 16, 2004

How long are recessions normally?

We've been hearing a lot about how the Bush tax cuts in 2001 stopped the recession in its tracks.

Ignoring for the moment that the main reason for the "stoppage" was not any of the cuts in the initial plan, but rather the Democrat-required, opposed-by-the-administration $300 per person "upfront rebate" check that was sent out then, the question becomes: was the 2001 recession shorter than any other?

Apparently, the government and NBER don't believe it was. Here, courtesy of the Census Bureau, is NBER's listing of the post-WW II recessions:

Peak Trough Months

Nov-48 Oct-49 11
Jul-53 May-54 10
Aug-57 Apr-58 8
Apr-60 Feb-61 10
Dec-69 Nov-70 11
Nov-73 Mar-75 16
Jan-80 Jul-80 6
Jul-81 Nov-82 16
Jul-90 Mar-91 8
Mar-01 Nov-01 8

The shortest, the six-month, G. Hillis Miller-inspired, recession at the beginning of 1980, contributed to, and possibly cost, Carter the presidency. The two longest were under Nixon and Reagan.

But the one under the real George Bush was eight months, meaning that three of the last four were eight months or less. Indeed, if we except the second Nixon and the Reagan recessions--where the solutions attempted were WIN buttons and severely increasing deficit spending, respectively--NO post-WW II recession has last more than one quarter LONGER than the 2001 recession.

Crediting long-term tax cuts with a great accomplishment only works if you assume that recessions under modern Republicans last longer. The current resident's father gives the lie to that assumption.

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