Posted Monday, Aug. 6, 2012, at 8:30 AM
Photo by Brendan Smialowski/AFP/Getty Images.
The conventional wisdom is that the economy is in bad shape, and the conventional wisdom is correct. Look at the past 10 years' worth of real output and you can see that we've never really recovered from the crash of 2008:
On the other hand, if what you're interested in is politics, it may be better to ignore the crash of 2008. After all, that happened a long time ago, and more people blame Bush than Obama for the crash. There's a fair amount of evidence that voters are myopic and really only care about the recent past. And in these terms, the economy is doing OK:
Not great, to be clear. We've certainly had better spans of growth. And indeed coming out of a steep recession you would expect to see a huge boom like the ones Roosevelt and Reagan rode to re-election in 1936 and 1984. But it's still true that if you look at the past two years in isolation, it's not like there's some crazy bad performance. We've been growing a pretty average amount.