Out of the ashes of the financial crisis has come the longest economic expansion in history. Now at 121 months, the US economy’s expansion began in June of 2009 as growth returned following the mortgage fiasco.

The Economic Phoenix Rises

It isn’t surprising that the longest economic expansion should occur after the second-worst recession of all time. What is surprising is that this record expansion stayed in place despite dubious economic policy in the immediate aftermath, which also explains why this expansion has been the weakest relative to length, as well.

The strength of an expansion is usually judged by its cumulative GDP growth. The chart below shows a 25 percent cumulative improvement.

Recessions following 1961 and 1991 saw cumulative GDP growth of 51.9 percent and 42.6 percent, respectively.

Cumulative job growth has also been low, relatively speaking, increasing by 12 percent. Recessions following 1961 and 1991 saw cumulative job growth of 19.7 percent and 17 percent, respectively.

US Economy Defied the Odds Under the Obama Administration & Kept Expanding – Barely

What’s behind these weak internals of the longest economic expansion?

The Barack Obama administration pumped a trillion dollars of government-driven stimulus into the economy, but simultaneously burdened it with additional regulation, particularly in the banking and financial services industries. This blunted the kind of full-speed-ahead growth we saw during the Reagan years.

Obama took a risk in bailing out the auto companies, in which bondholders were crammed down, and the government and the unions took equity stakes.

Between the regulatory environment and the new standard that the government could throw out centuries of established protocol that gave bondholders the most power, capital investment cratered during the recovery – right when it was needed the most.

As bad as the economic downturn had been, these policies drove a stake through the heart of a robust recovery. This can be seen in the collapse of the Labor Force Participation Rate during the Obama years – falling from 65.7 percent to 62.7 percent.

The Labor Force Participation Rate is the percentage of the US population aged 16 – 64 that are currently employed or in search of a job. The 300 basis point decline was the largest decline in modern history, meaning a full 3 percent the entire eligible workforce gave up looking for work and left the market entirely.

Trump Kicked Things Into High Gear

Job growth exploded following Donald Trump’s election. An estimated 4.5 million jobs were added in the first 20 months of his term, driven by optimism that he would juice the economy. Reducing the regulatory burdens and cutting the corporate tax rate has also resulted in record low unemployment rates across almost every demographic.

The trade war with China has not been helpful in the near-term to the economy, but Donald Trump is thinking long-term. While the trade war has threatened to derail the expansion, it appears the Federal Reserve will cut rates the rest of the year. That has traditionally resulted in economic stimulation.

In other words, it looks like the longest-ever economic expansion could keep growing longer.