Kenneth Hennessey, who served George W. Bush as senior White House economics advisor, has an important blog entry responding to President Obama’s column in the Washington Post this morning (h/t: Instapundit).
The president’s column is, not surprisingly, the usual self-serving, tendentious twaddle that politicians of Left and Right turn out when a newspaper asks for an op ed. In it, he makes the now inevitable point that the current economic downturn is the “most severe economic downturn since the Great Depression.” As Hennessey shows with a chart from Donald Marron, that is just nonsense. The current downturn is not even the worst of the post-war era, at least not yet, although it is getting there. So far, the economy has contracted 3.6 percent. In 1957-58 it contracted 3.7 percent.
How bad was the contraction in 1929-33? The exact figure is 29.3 percent, eight times as severe as the current contraction. To be sure, the recession of 1957-58 and the Great Depression are over. We know where their bottoms were. That can’t be said of the current recession. There are signs that we are at or near the bottom and even that recovery might be stirring already, although unemployment, a lagging indicator, will almost certainly get worse for several months to come.
Still, it should be remembered that in the spring of 1930, when a group of clergymen visited Herbert Hoover to ask for a public-works program, the president told them in all sincerity, “You are six weeks too late. The depression is over.” Equally, however, when liberals ask for a blank check in order to fight “the worst economic downturn since the Great Depression,” it should be remembered that it’s a bit like calling a canoe that overturned in May, 1912, ”the worst shipwreck since the Titanic.”