As per our prior discussion, the chart used by the WSJ reaches conclusions unsupported by the data. Consider the chart below — it shows how past recoveries have compared to more recent ones, as well as the present recovery.
click for much larger chart
This chart shows that at some point after a recession, the economy starts to appreciably recover from the prior weakness. Whether its tax cuts, fed cuts or just the normal rhythm of the cycle, the economy always recovers eventually.
What makes the present recovery such an oddity is how weak the job recovery actually is, and how long it has taken to get back to employment breakeven.
Special thanks to Spencer England for doing the excel data crunching and creating the chart.
UPDATE: August 17, 2005 9:35am
Welcome WSJ readers.
Since I keep getting the same email question, let me answer it by way of pointing you to this discussion: Understanding the Post-Bubble Economy