Friday, October 31, 2014

Misinformation... BOO!

Happy Halloween everyone! I hope you are all able to go out and enjoy some spooks and scares. I debated with myself about whether to share some musings about past Halloween's and some nice anecdotes about the holiday, or if I should address something truly scary!

Misleading Information (Dum dum duhhhhmmmm...)

Partisan Politics (Dah Daaaahhhhhh....)

and, Election Surprises (Eeeeeeeekkkkk!!!!)

Just a couple days ago the good people at Politicususa.com posted an article sharing irrefutable evidence that the economy is always awesome under Democratic presidents, and that it (almost) always stinks under the rule of Republicans.

Of course anyone who has paid a sliver of attention to the economy for more then 5 years can look at their primary graphic and know that there is something fishy going on. Take a look at the Bureau of Labor statistics for private job growth and you will find out that shock! The numbers don't say that. Going from inauguration to inauguration their creation rates should be Bush (-80K/year) and Obama (+1100K/year). Far from the rates implied in the graphic.

Now don't get me wrong, these still aren't numbers that I would brag about, but it does lead you read the fine print on the graphic. They are measuring based on their budget years, not the time they are actually in office, creating a lag of several months from a presidents inaguaration (February) to the end of the budget year (October). For the Bush v. Obama example, things were not good those first several months of the Obama presidency, the debate will go on for years about how quickly and positively President Obama's policies impacted our recovery from that recession.

This specific manipulation of data isn't totally unjustified, though. It takes some time for an entering administration to get their house in order and begin to make changes, and then for those changes to have some effect.

While political economy models can get quite sophisticated and complicated and may entail a wide variety of not so obvious 'tweaks' and not so realistic assumptions to massage data to make a point (exactly what I am arguing here, btw) the idea of economic inheritance can be boiled down to adding together two major yet simple points. The first, already noted, is that there is a lag in the economy. There is an inertia or continuity in the economy that carries forward from one fiscal year to the next and that does not get disrupted so suddenly by a change in administration.

Some of you may be rolling your eyes right now, "Blame Bush!" I appear to be saying. I said there was some inertia, but I think the discussion has to be in the frame of months, not years. When the Obama administration declared 'Recovery Summer!' in 2010 and proceeded to create a few hundred thousand jobs after we had lost millions and spent trillions to get them back. That is the definition of a failed plan.

There is a clear break, however, in the argument of blaming someone for a downturn and blaming someone for how they responded to it. It is this second point that holds the key to voters perception of how Presidents handle the economy that allows for close elections when all the massaged numbers in presented show that Democrats are such clear champions of jobs and economic growth.

I'm getting a little long winded, feel free to take a break and grab a soda... You good? Okay, because here is the crux of my argument

*official onset of a recession as defined by the National. Bureau of Economic Research
The economies inherited by each of the new Republican presidents from their Democratic predecessors in this post World War 2 era had gone into recession within the year leading up to the parties’ change in stewardship. Don't believe me? Well here is my not so pretty graph to prove my point. Provided by the University of Buffalo Political Science department.

For those of you familiar with concepts like Okin's Law, recessions typically lead to job loss. If we accept the data from PoliticusUSA that there is a lag, then is it such a stretch to point out that what happens during that lag can be factored into our conclusions as well?

What is the main point you can gleam off this data? The 2 second sound bite would be "Democratic Presidencies lead to recessions". I'm going to try and be a little more polite in my assessment and say that the criteria for a Republican to get elected president is different then it is for a Democrat to be elected president. This truth extends well beyond how the economy is doing from one quarter to the next. If it were simply a numbers game then it would be a matter of who can dump the most money into an economy that would lead to jobs. 

It's a bait statistic to say Democrats create more jobs, because to say that no they don't is 1). In the most direct interpretation inaccurate, 2). because Republicans are more about creating free and fair economic opportunity. They promote low debts, low taxes, and removing the barriers that may prevent people from creating a new enterprise, and 3). a concession against the old argument that government does not create jobs. 

One can also look at the above data and say Democrats care more about how they can prop you up. Typically, when these types stimulus, jobs programs, and short term infrastructure programs end, such as the case may be during an administrative change, there is a hole left that only continued government 'tinkering' with economic factors such as investment can sustain. This line of reasoning also ties in greatly with ideas of dependency that frequently is brought up in election year debates.

Jobs for the sake of jobs is not a fair benchmark to measure such approaches, if you don't care how a job is being funded or how that job came about. Sure, Democratic administrations appear to have an edge, if you care about sustainability and not having government be a requirement for your economic prosperity, the data above helps with that argument. 

And of course, there are other factors, who controls congress, how much debt is involved, what was the unemployment rate going in. If I asked who had lower unemployment on average during their presidency, George W. Bush or John F. Kennedy, who would you guess? What about Clinton v. Nixon? (The republican in both cases, but again, these numbers are horribly misleading)

I've exhausted enough of the limited internet space and most readers attention span, The final conclusion I want you to be able to draw from this is no conundrum to begin with as to why Democrats aren't considered the champions of job creation. Republicans fare about as well as Democrats in presidential elections over a long enough span because the economic records of Republican presidents were about equal to those of Democratic presidents once short term inherited economic conditions are taken into account. It's the methodology and principles behind the numbers that drive most voters as the observable results, at least in the short term, tend to be the same.

You can omit key factors or twist facts all day long, but if the outcome of such contorted data seems to make you wonder why there isn't a clearer result come election time, there is a pretty fair chance that there is something frighteningly misleading about that data.

That's it, I'm off my soap box for the day, now gimme some candy!


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