May 18, 2009
How Did Bush Do This?
Europe is in its deepest recession since World War II, so reports the UK's Telegraph .
"German economic policy is ‘bankrupt,' economists have said. The declaration was made as it emerged that Europe's biggest economy has now suffered a worse ‘lost decade' than Japan and is deeper in recession than any other major economy. On a day of dismal news for the European economy, official figures also showed that Italy, Austria, Spain and the Netherlands are facing their biggest combined slump in post-war history."
Eurostat provides the raw data. Here are real GDP growth numbers for some selected countries and averages for the latest quarter (1st quarter of 2009, or January through March).
From Previous Quarter From Previous Year
Austria -2.8% -2.9%
Belgium -1.6 -3.0
France -1.2 -3.2
Germany -3.8 -6.9
Italy -2.4 -5.9
Netherlands -2.8 -4.5
Portugal -1.5 -3.7
Spain -1.8 -2.9
UK -1.9 -4.1
Europe (EU27) -2.5 -4.4
US -1.6 -2.6
Do you notice anything funny about these numbers? Here is what I notice: the recession in the US is milder than that of Europe. Every country on this list had more economic shrinkage from 2008 to 2009 (Q1 to Q1) than did the US.
How could this be? Did they all have George Bush for President? Did they all succumb to free market ideology in the last eight years? Did they all repeal part of Glass-Steagall? Did they all spend wildly on an unnecessary war in Iraq? Did they all bankrupt themselves with out-of-control defense spending?
Perhaps we need to look deeper, into the last eight years, in order to discover how bad President Bush was. Here are the average GDP growth rates over the last eight full years.
Ave. GDP Growth, 2001-2008
Europe (EU27) 1.2
Well I'll be darned. With the minor exception of Spain, the US did better than all these countries over the last eight years as well.
What could it be? Could it be possible that Bush was not the cause of our global economic meltdown? Could it be possible that the economic illness spread from Europe to the US, rather than vice versa?
Could we have the whole thing wrong?
Whatever it is, I'm sure if our government does what it did in the 1930's -- raises taxes, spends more, regulates more, restricts trade, and "fine tunes" monetary policy -- we will get through this just fine. Just like we did then. I think we're seeing the results already.