What is the right way to judge someone's economic performance? Consider the following scenarios:
A new CEO takes control of a company which is laying off workers, whose sales and profitability is dropping and whose stock price is way down. Three years later they are hiring slowly, sales and profitability are growing slowly, and the stock price has increased 50%. Is the CEO doing a good job because things are much better? Or is he doing a lousy job because the company is still worse off than a few years before the CEO took over?
A new governor takes over a U.S. state. The state is losing jobs fast, GDP is dropping, and the deficit is high. Three years later jobs are growing slowly and GDP is up 2-3%/year, but the deficit is still high. Is the governor doing a good job because things are much better? Or is he doing a lousy job because the state still isn't doing as well as a few years before the governor took over?
A new president takes over. The country is losing 750,000 jobs per month, GDP is dropping fast, the Dow is at 8,000, and the deficit is very high. There is a real possibility of complete financial collapse. Three years later the economy is adding 100,000-200,000 jobs a month, GDP is up 2-3% a year, and the Dow is around 12,000 but the deficit is still very high. The financial industry is now very profitable and in no immediate danger of collapse. Is the president doing a good job because things are much better? Or a lousy job because the country isn't doing as well as a few years before he took over?
Of course, there is such a president. His last name is Obama.