the decline since 2005
Nelder is looking at the decline since 2005, not 2007. This is why his "the recession did it" hypothesis is so half-baked.
If he was measuring from 2007 to 2011, I'd be inclined to give him a bit more credit. But, relative to 2005, the economy is certainly bigger, and thus "the recession did it" makes no sense at all.