A reasonable question to ask in any election year is whether we are better off today than we were four years ago. This year, the question happens to be remarkably easy to answer. Yes, by almost any measure, we are better off now than we were in the fall of 2008. Today our economy is growing, but back then it was shrinking. Today we’re adding new jobs every month, but back then we were shedding them at an alarming and increasing rate. Today businesses are boasting record profits, but back then they were awash in red ink.
This is no accident. Over the past four years, aggressive actions taken by the federal government, including the economic stimulus package and the rescue of the auto industry, succeeded in turning our economy around and putting us back on the right economic path.
Much work needs to be done to ensure the current economic recovery gains better traction. But there is no doubt that the economy is on the right track and remarkably robust in the face of tremendous obstacles, among them the lingering European financial crisis, high oil prices, and continued massive household debt levels.
Contrast that with four years ago, the last year of President George W. Bush’s second term of office, when the consequences of the conservative economic policies of his administration were in full flower. The financial crisis sparked by rising home mortgage foreclosures in 2006 gained speed in 2007 and morphed into a serious recession in 2008. It is no exaggeration to say that by the fall of 2008, that recession threatened to turn into another full-fledged Great Depression as:
- Mortgage foreclosures mounted swiftly
- Job losses accelerated rapidly
- Economic growth reversed course
- Corporate profits fell precipitously
- Household wealth declined sharply
In short, our economy and financial markets went into a tailspin in the second half of 2008 due to the consequences of conservative economic policies implemented aggressively by the Bush administration.
Fast forward to the summer of 2012. The U.S. economy has added jobs since February 2010, the economy has been growing since June 2009, corporate profits have risen sharply, foreclosures are finally falling, and household wealth is continuing to expand. Instead of a second Great Depression, the actions of the Obama administration resulted in our economy exiting what became known as the Great Recession of 2007–2009 within six months.
Are we better off today than in 2008? You betcha.
The data in the graphs above were updated September 10, 2012.
Christian Weller is a Senior Fellow at the Center for American Progress Action Fund and professor of public policy at the University of Massachusetts Boston.
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