The integrity thing, again

The Wikipedia article 1973–75 recession for some reason shows this graph:

The sawtooth blue line shows "percent change from preceding period" for RGDP; the flat red line is "average GPD growth 1947-2009". Average RGDP growth, I assume.

The red line is up a little over 3 percent. Just a snit over 3.3% by my calculation, based on quarterly data at annual rates.

But you know, they didn't know about that during the 1973-75 recession. They didn't know about the 1947-2009 trend. They only knew what had already happened. They didn't know what was to come.

What they might have known was that average RGDP growth for 1947-1973 was almost 4.1% annual. What they could not have known was that average RGDP growth for 1975-2009 was less than 2.9% annual.

Does it matter? Yes: The difference is more than one percent of GDP, every year. One percent of a trillion dollars is $10 billion. That's $10 billion for every trillion dollars of real GDP, every year, compounded.

If we grew at that 3.3% number since 1947 instead of 4.1%, by 1973 we'd have had an RGDP of only $4586 billion instead of the $5456 billion we actually got.

If we grew at the 3.3% number instead of 2.9% since 1975, by 2009 we'd have had an RGDP of $16,696 billion instead of the paltry $14,540 billion we actually got.

If we grew at the 4.1% number since 1975, as we did before 1973, by 2009 we'd have had an RGDP of $21,361 billion instead of $14,540 billion.

21 instead of 14. That's 50% more.

Why would anyone want to bury these figures in a long-term average? Are we trying to hide the fact that economic performance was far, far better in the years before the 1973-75 recession than in the years since?


// for documentation, the spreadsheet is available.