Fox News contributor Stephen Hayes claimed that it's “nonsense” for the Obama administration to argue that it “didn't really appreciate the depths of the problems the country faced when we came into office.” In fact, measures of the recession in 2009 understated its depth, and subsequent revisions of economic data have shown that the downturn was indeed worse than it appeared at the time.
Hayes Says Argument That The Recession Was Worse Than It Appeared Is “Nonsense,” “Revisionist History”
Hayes On Administration Claims: “There's Some Revisionist History Going On.” From Fox News' America Live:
JON SCOTT (co-host): So, hope and change takes eight years, or at the very minimum, four. Is that the argument?
HAYES: Yeah, I think that's their argument. Look, I don't -- it's not a totally honest argument, to be candid about it. I mean, if you look back, they're saying well, we didn't really appreciate the depths of the problems that the country faced when we came into office. That's total nonsense. They did appreciate the depths of the problems, and they were talking about it at the time as the potential for the next Great Depression. So there's some revisionist history going on. [Fox News, Happening Now, 1/26/2012]
Revised GDP Figures Showed That The '07-'09 Recession Was Far Worse Than Previously Recognized
McClatchy: Economic Data Revisions Show That “The Great Recession, Already The Worst Downturn Since The 1930s, Was Even More Damaging Than Previously Recognized.” In the summer of 2011 the Bureau of Economic Analysis released revisions to its estimates of the economy from 2008-2010. McClatchy reported:
BEA also unveiled its annual revision of economic data back to 2008. The revision found that in 2008 the economy actually contracted rather than eking out a tiny gain as initially reported, and 2009 growth was almost a full percentage point slower than estimated earlier.
The quarterly percentage change in real gross domestic product was revised down for six of the 12 quarters reviewed. That means the Great Recession, already the worst downturn since the 1930s, was even more damaging that previously recognized. [McClatchy, 7/29/11]
AP: “The 2007-2009 Recession ... Was Even Worse Than Previously Thought.” The Associated Press reported:
The 2007-2009 recession, already in the record books as the worst in the 66 years since the end of World War II, was even worse than previously thought.
From the start of the recession at the end of 2007 to the end in June of 2009, the U.S. economy shrank 5.1 percent. That is 1 percentage point worse than the previous estimate that the recession reduced total output during that period by 4.1 percent.
The new estimates emerged from the annual revision of economic data prepared by the Commerce Department's Bureau of Economic Analysis and released Friday.
Among the previous 10 postwar recessions, output in only two dropped by more 3 percent. In the 1957-58 recession, the economy contracted 3.7 percent. And during the 1973-1975 downturn, the economy fell 3.2 percent from the start of the recession to the end. [Associated Press, 7/29/11]
Wash. Post: Moody's Chief Economist Mark Zandi Said Revised Data Shows The Recession Was Much More Severe Than Thought. The Washington Post reported: “As Moody's chief economist Mark Zandi told me this morning, the revisions suggest that the recession following the financial crisis was much, much more severe than we'd thought--the economy actually shrank at a 8.9 percent annual rate the fourth quarter of 2008 and 6.7 percent in the first quarter of 2009 (earlier estimates had shown a smaller, 5.9 percent annualized drop across the two quarters).” [The Washington Post, 7/29/11]
Dean Baker: Revisions Show That “The Post-Lehman Plunge Is Even Sharper Than Had Previously Been Reported.” Dean Baker, co-director of the Center for Economic and Policy Research, said of the revisions:
The annual revisions in this report show a somewhat different picture of the recession. Most importantly, the post-Lehman plunge is even sharper than had previously been reported. The economy shrank at a 7.8 percent annual rate in the fourth quarter of 2008 and first quarter of 2009 compared with a previously reported 5.9 percent annual rate. The decline in the second quarter was just 0.7 percent, followed by growth in the third quarter of 1.7 percent, suggesting that the stimulus was effective in turning the quarter around. The downward revision to the first-quarter data coupled with the revision of the fourth-quarter growth to 2.3 percent from 3.1 percent suggests that the winding down of the stimulus has seriously dampened growth. [Center for Economic and Policy Research, GDP Bytes, 7/29/11]
IHS Global Insight: Revisions “Deepened The Recession Substantially.” An IHS Global Insight report on the revised GDP figures noted:
The big surprises were in the historical revisions. These deepened the recession substantially. The fourth quarter of 2008, right after the Lehman failure, now shows an 8.9% annual rate of decline in GDP (previously 6.8%), and now represents the worst single-quarter decline in GDP since the 10.4% drop in the first quarter of 1958, exceeding the 7.9% decline in the second quarter of 1980. The revisions then made the initial rebound a bit faster (with growth running just below 4% in the first and second quarters of 2010), but then showed the recovery losing momentum over the second half of 2010 and tailing away to just 0.4% in the first quarter of 2011 (previously 1.9%) and 1.3% in the second. Although the second quarter was disappointing, the revisions mean that it actually shows stronger growth than the first. [IHS Global Insight, 7/29/11]