Here is John Lott at Fox News telling us that all this talk about the economy being in recession is a media myth, and more, part of a pattern of the media trying to make Republicans look bad.
During the 2000 election, with Bill Clinton as president, the economy was viewed through rose-colored glasses. According to polls, voters didn’t realize that the country was in a recession. Although the economy started shrinking in July 2000, most Americans through the entire year thought that the economy was fine.
I hate to break it to Mr. Lott, but the economy was not in recession in 2000 or at any other point during the Clinton administration. My guess is that this minor detail goes a long way toward explaining why “voters didn’t realize that the country was in a recession.”
Now, lest you think Lott was merely being hasty and didn’t mean to write that the economy was in recession in 2000:
Talk of recession is seemingly everywhere. While the majority of people rate their personal finances positively, consumer confidence in the economy has plunged to a 16-year low, well below what it was during the last year of the Clinton administration when we were in a recession.
But he’s also complaining that there’s talk of recession everywhere. Granted, it will be a long time before the NBER makes an official determination of recession, but I think most people who aren’t associated with Fox can tell the difference between the year 2000 and now.
Or, even more telling, take the three months from July through September last year, when the GDP was growing at a phenomenal 4.9 percent.
The annual percentage change in GDP in 2007 was 4.9 percent. Interestingly enough, the economy grew at over 4.9% a year in more than 75% of the years beginning in 1930. The real growth rate in the economy (I’m too tired to go look for real GDP per capita right now) was 2.2%, and we had faster real growth than that in 70% of the years beginning in 1930. What to John Lott is phenomenal, to the rest of us is pretty ho-hum.
And since Lott seems to think that we were in recession during Clinton’s last year, its worth pointing out that the percentage change in real GDP was faster than 2.2% every single year of the Clinton administration. And since a 4.9% nominal growth rate is phenomenal, someone should point out to him that it was 5.9% in Clinton’s last year in office.
A little perspective on the economy would be helpful. The average unemployment rate during President Clinton was 5.2 percent. The average under President George W. Bush is just slightly below 5.2. The current unemployment rate is 4.8 percent, almost half a percentage point lower than these averages.
Ah, averages. But Lott doesn’t point out that the unemployment rate was 8% in January of 1993, and it had shrunk to 4.7% in January of 2000, when he left office. Conversely, it is now at 5.2%. Put another way – it shrunk under Clinton, and rose under GW. Lott might as well be bragging that the average real GDP is higher under GW than it was under Clinton.
Then he tells us this:
Indeed, research has indicated that media bias is real. Kevin Hassett and I looked at 12,620 newspaper and wire service headlines from 1985 through 2004 for stories on the release of official government releasing numbers on the unemployment rate, number of people employed, gross domestic product (GDP), retail sales, and durable goods.
Even after accounting for how well the economy was doing (e.g., what the unemployment rate was and whether it was going up or down), there was still a big difference in how positive or negative the headlines were. Democratic presidents got about 15 percent more positive headlines than Republicans for the same economic news.
So, after Mr. Lott and Mr. Hassett adjusted for how well the economy was doing, Dems got better press than Reps. Whether the press is biased or not is one thing, but I’m not ready to accept to accept the “accounting for how well the economy was doing” by a guy who tells us (twice in the same article) that the economy was in recession in 2000.
The alternative is that maybe, just maybe, there’s a reason there are more stories about recessions while Republicans are in office:
(Graph plus link to google doc with data here.)