The mother of all shocks

Brad DeLong writes “The Six Major Adverse Shocks that Have Hit the U.S. Macroeconomy since 2005”:

Talk to people at the Federal Reserve these days about how they feel about the institution’s performance during the seven very lean years from late 2008 to late 2015, and they tend to be relatively proud of how the institution performed. Almost smug.

Why? Well, let me pull out my old workhorse-graph of the four salient components of U.S. aggregate demand since 1999

Shocks_1

And repeats the chart 5 times, each time emphasizing a different demand component.

He could have saved time and space and put up the only chart that matters, which also indicates that the Fed cannot be proud or smug about its performance. That´s the NGDP Gap chart, which shows that the Fed began the road to perdition in early 2008 and later failed to “turn the boat around”!

Shocks_2