U.S. Competitiveness Council: There Was No ‘Obama Recovery’
Dec. 8, 2016 (EIRNS)—The U.S. Council on Competitiveness (U.S.CC) and the Gallup Organization have published a economists’ study, entitled "No Recovery: An Analysis of U.S. Long-Term Productivity Decline." As U.S.A Today aptly headlined its coverage of the report: "Maybe the Obama Recovery Wasn’t a Recovery After All."
Specifically he U.S.CC study concluded that for the past 15 years, per capita Gross Domestic Product in the American economy has grown at an annualized rate of just 1%, and that it is growing at just half that rate since the 2008 financial crash.
In addition, U.S. multi-factor productivity has grown at a very low 0.4% annualized rate over the past decade. Multi-factor productivity attempts to measure the efficiency with which factories or other productive facilities use additional labor and additional capital investment; it is an approximation of the lift to the economy of invention and technological progress. This measure’s contribution to U.S. productivity growth was at 3.0-3.5% annually during the years from FDR’s to JFK’s presidencies; the 0.4% of the Obama years (and several years of the George W. Bush Administration) is a far cry from that.
The U.S.CC report also finds that "Exports as a share of GDP increased from 11.5% in 2007 to 12.6% in 2015," even though globally, growth was slowing down. Thus, the global slowdown was not what was dragging the U.S. economy; rather, a lack of real economic demand in the U.S. economy itself is indicated. Demand for private investment has fallen, and business capital investment has fallen, they imply, as a result.
The report quotes Yale economist and author Robert Gordon that "the quality of inventions has fallen."
"Gordon argues that advances [inventions, new technologies—ed.] since 1970 have tended to be channeled into a narrow sphere of human activity having to do with entertainment, communications, and the collection and processing of information," t
he report says.
"For the rest of what humans care about—food, clothing, shelter, transportation, health, and working conditions both inside and outside the home—progress slowed down after 1970."
Thus, the introduction notes,
"There is a pervasive sense that the economy is not working, as documented in Gallup survey data and many anecdotal media accounts."