Vital Signs

The Clinton Contraction

William Jefferson Clinton is the first Democratic president of the postwar era to have presided over a decline in manufacturing jobs in the American Southeast.  According to the U.S. Bureau of Labor Statistics, monthly manufacturing payroll employment increased ten percent in Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North and South Carolina, Tennessee, Virginia, and West Virginia under Harry S. Truman, 14 percent under John F. Kennedy, 27 percent under Lyndon B. Johnson, and six percent under James E. Carter but declined four percent under President Clinton.

How severe is this manufacturing contraction?  Economists disagree about the factors that caused the Great Depression, but the event taught them a great deal about how to measure contraction.  Gottfried Haberler, in his 1937 book, Prosperity and Depression  (Harvard University Press), identifies three times series—employment, production, and income—that can be analyzed to determine whether an economy or a specific private-industry sector is expanding or contracting.  Today, economists use three measures of these time series: duration, depth, and diffusion.  The period of contraction must be sufficiently long (duration), feature a substantial decline (depth), and affect a sufficient number of industries (diffusion).  Duration is measured by calculating the difference...

Join now to access the full article and gain access to other exclusive features.

Get Started

Already a member? Sign in here