U.S. Competitiveness Council: There Was No ‘Obama Recovery’

The U.S. Council on Competitiveness (USCC) and the Gallup Organization have published a economists’ study, entitled “No Recovery: An Analysis of U.S. Long-Term Productivity Decline.” As USA Today aptly headlined its coverage of the report: “Maybe the Obama Recovery Wasn’t a Recovery After All.”

Specifically he USCC study concluded that for the past 15 years, per capita GDP 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 USCC 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,” the 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.”