In a contrarian take on today’s GDP numbers, WaPo’s Neil Irwin deplores the lowered expectations of economic recovery that have become common in both government and business circles, but also offers an interesting comparison to trend lines that distinguish this languid comeback from the one that got Ronald Reagan easily re-elected in 1984 on a slogan of “It’s Morning In America!” Comparing this year’s second quarter with that of 1982, an equivalent point in the recovery from the 1980-81 recession, Irwin spots the glaring disparity:
[B]usiness investment and housing are not the big culprits in why growth fell short last quarter compared with a typical quarter of the 1982 recovery; they’re about the same. But in the earlier recovery, American consumers were picking up their pace of spending at a much faster rate. The trade balance was improving, making it a net contributor to the economy. And government spending was rising, amid the Reagan defense build-up and stable spending by state and local governments. This time around, however, government has tended to be a drag (and often more of a drag than it was in the second quarter).
It’s a pretty important data point against the common conservative assumption that regulation and taxes are locking up an economy-saving burst of business investment–and an equally important indicator that insufficient consumer demand and declining public spending and investment–you know, the factors those discredited Keynesians like to talk about–remain a very big deal.