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I have perennial discussions with conservative friends about the proper and improper ways to use statistics. Although the saying goes "Figures lie and liars figure"  there is in fact a right way and a wrong way to use numbers.

Below is a chart making the rounds on Facebook that seems to show the President's comprehensive awfulness on the economy.  Follow my point by point analysis below the fold.  Skim to the bottom for snappy comebacks....

(Warning: Image heavy)

Here's the chart:

Pretty bad, hey?  Things not looking good for Our Hero.

The figures are correct but are highly selective, not to say deceptive. The following looks in detail at the sources of the figures, their wider context, and the very different picture that emerges if you care about the proper and improper use of statistics.

Maybe someone can use it to score an occasional point here and there.  For each figure on the chart I've made an effort to craft one or two sentence replies for use in conversation with your more conservative acquaintances.

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1. The first two numbers relate to unemployment. They are basically the same, just unemployment expressed two different ways to pad the chart.

MrConservative's chosen dates are January 2009 (inauguration Day) to January 2012. Let's step back and take a broader look at the unemployment rates of the past several years:

The 6-year low point for unemployment occurred in March, 2007 (4.8%). The financial collapse took place in a series of escalating crises between mid 2007 and late summer, 2008 and the unemployment rate started rising steeply. It coasted upwards straight through the beginning of Obama's term in January 2009 (7.8%) and continued to rise ever more steeply to a high point in November, 2009 (10.1%).

It has been falling ever since. Since November of 2009 unemployment has dropped from 10.1% to the current 8.5% ...Still not good but a 1.6% drop instead of a 0.7% rise.

So for his first year in office Obama was dealing with the ongoing consequences of a financial debacle that occurred the summer before the start of his term. The government operated under the Bush FY08 budget until September 09. Obama's first FY began in October, 2009, ignoring delays in getting the budget through the House.  

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2. Gas prices.

MrConservative's chart correctly shows the rise in gas prices during Obama's term from a low of $1.85 in January 2009 to $3.39 in January 2012.

On the other hand, how about some more data?

Interesting sawtooth pattern.

What MrConservative's figures fail to show is a previous boom and bust that started in February 2008 ($3.00), shot up to a high in July 2008 ($4.12) and crashed to a $1.61 low in December 2008.

Recent gas prices have been wildly volatile, bouncing up and down repeatedly.  The most marked fluctuations have been over the past six years. Suggested causes include various news of unrest in the Middle East and financial manipulation of prices by speculators, but the causes are poorly understood at best, certainly not by me. A poster suggested deliberate manipulation in order to benefit the Republicans in the November election.  I find that plausible but unconfirmable.

Obama's term started at a multi-year low point for the price of gasoline. This low was a momentary deep downspike in a crazy market, not part of a trend. There was no place to go but up.  Anyone who wishes to blame Obama for the current rise in gas prices bears the burden of showing why this rise is meaningful and the previous boom and bust is not.

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‎3. Federal Debt/debt per person

First of all, like the two unemployment figures these are just two ways of expressing the exact same thing so their repetition is padding.

The numbers themselves are accurate, as such.  On the other hand:

If you take on a debt it doesn't evaporate just because someone else gets custody of the credit card. If you apportion the public debt according to what policies led to what consequences, Bush era policies, spending, and interest accounts for about 4 to 5 trillion of the total and Obama policies for about a trillion and a half, as seen here in this very effective New York Times graphic:

$1.4 trillion in debt is still not great but this shows that in terms of specific policy responsibility the actual numbers are almost exactly inverse to the ones claimed by MrC.

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‎4. Misery Index (inflation rate plus unemployment rate)

To properly analyzed the Misery index it needs to be broken down into its separate factors and looked at over time:

Date:      Inflation (%):    Unemployment (%):    MI:
Jan 01     3.7                        4.2                   7.9
Jan 02     1.1                        5.7                       6.8
Jan 03     2.6                         5.8                       8.4
Jan 04     1.9                        5.7                   7.5
Jan 05     3.0                        5.3                   8.3
Jan 06     4.0                        4.7                       8.7
Jan 07     2.1                        4.6                   6.7
Jan 08     4.3                        5.0                   9.3
Jan 09     0.0                        7.8                   7.8
Jan 10     2.6                        9.7                  12.3
Jan 11     1.6                        9.1                  10.7
Dec 11     3.0                        8.5                  11.5
(Bureau of Labor Statistics)

From 2001-2007 the Misery Index averaged 7.8.  This is a composite of fairly low unemployment (average = 5.2) and a moderate inflation rate (average = 2.6).

Unemployment began to rise steeply during 2008, reaching 7.8% in January 2009.  This did not affect the MI because it was masked by a zero inflation rate. Inflation was zero because the financial crisis had killed the economy and no one was buying anything. If the economy had not been a basket case in January 2009, the MI would have been 13 based on average inflation.

As the economy improved (relatively speaking) renewed inflation sent the MI back up into its current range of 10-12. It should begin to come down slowly if and when unemployment slowly drops.

What this shows is that the Misery Index is just another confounded variable that is almost entirely dependent on unemployment i.e. more padding of the chart.

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5. College Tuition and Health Insurance Premiums:

Both the increase in college tuition and that of health insurance premiums are long term trends with many causes and few fluctuations:


(College Board)

As you can see, tuition started rising steadily and faster than inflation from 1978-present (through 5 administrations). The problem is complicated and multifactorial, started long before January 2009 and shows every sign of continuing well past January 2016.

Ditto for health insurance premiums:

The steady-as-a-rock rise in premiums at a rate well above either inflation or the rise in wages over the past 10 years is one of the main reasons why Obama pushed so hard for reforms. The Affordable Care Act ("Obamacare") hasn't even been fully put into place so can have had little to no effect on this trend either positive or negative.

In both cases the trends are multifactorial in cause and multidecade in duration.  Blaming Obama, or any single presidential administration,  for this particular little slice of the trendline is like blaming him for the increasing age of the earth.

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6. Food stamps/Poverty/Home values:

All these items are up or down, whichever direction is bad,  because we are still in the long, painful aftermath of the financial breakdown of August 2008.

Yes, when unemployment is up there are more poor people and yes, they use more food stamps.

The collapse in home values was notoriously a major cause of the entire mess.

It started before January of 2009 and is a deep, deep hole out of which we are only painfully climbing out.  Only one party has consistently fought for measures to mitigate the suffering. Only one party has done everything it can to increase that suffering.

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7. Global Competitiveness Index:

This is fascinating! Whoever put together this little bit of propaganda cannot have actually read this report. (WARNING:: pdf)

The GCI is a yearly international study that looks at the competitiveness and sustainability of national economies using twelve "pillars of competitiveness." It looks more to the long term than to the immediate numbers.

Ironically, many of the reasons the US has dropped in the rankings are ones that conservatives would just really hate.

Some of the more embarrassing reasons given for the US decline include:

The business community continues to be critical toward public and private institutions (39th). In particular, its trust in politicians is not strong (50th). ...  It remains concerned about the government’s ability to maintain arms-length relationships with the private sector (50th)
and
A lack of macroeconomic stability continues to be the United States’ greatest area of weakness (90th). . . .political brinkmanship over the debt ceiling in the United States
and the ensuing downgrade of the US credit rating by Standard & Poor’s, have raised questions about the sustainability of debt in a number of countries.
Oh, geezeum MrC...so it really does matter that a sizable minority of the country are rabidly anti-government?  And that our national credit rating is in decline?  

Hmmmmmm.

FYI: the four countries ranked above the US in the GCI are:

Switzerland
Singapore
Sweden
Finland

Horrors! Socialism!

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In summary:

The figures presented are technically true but chosen in a way to project a deceitful picture due to

1. Failing to recognize that Obama took office several months into a major financial cataclysm not of his making, with ongoing consequences for the country.

2. Padding the list by presenting the same figures twice or three times under different guises

3. Padding the list by presenting multiple figures that are highly correlated with each other and with the ongoing financial emergency.

4. Representing decades-long trends as confined to the Obama years when in fact the same increases have been going on across multiple administrations.

5. Presenting highly volatile numbers that have fluctuated repeatedly for murky causes as somehow confined to the Obama years.

6. Finally, representing the decline in the country's GCI as a negative for this administration when many if not most of the primary reasons for the downgrade are actually consequences of conservative anti-govenrment ideology and Republican intransigence on servicing the public debt.

Respectully submitted,

Baz

UPDATE: Snappy comebacks to bogus numbers
Snappy comebacks are best put in the form of a question:

1. Unemployment figures:

Why are you willing to notice the 2% rise in unemployment at the START of Obama's term, but not the 3% rise at the END of Bush's?  What about the latest drop from 10% to 8.5?

2. Gasoline Prices:

A two-dollar rise in gasoline prices is sure bad.  It happened under Obama and also under Bush.  Why not just face the fact that presidents have little to no control over gas prices?

3. Federal Debt;  

Who is responsible for running up a credit card, the one who used the card or the one stuck with the bill?  (Bush 5 trillion, Obama 1.4 trillion).

4. Misery Index:

The Misery Index is inflation plus unemployment. Remember that Christmas when NO ONE was buying ANYTHING?  When was that? Was that GOOD NEWS? If the economy had not been a basket case that winter, Obama would have inherited a Misery Index of around 13.

5. College Tuition and Health Insurance:

College Tuition and Health Insurance have been rising like a skyrocket for the past thirty years.  So you are saying that Carter, Reagan, Bush I, Clinton, Bush II, AND Obama were ALL economic incompetents?

6. Food Stamps, Poverty, Home Values:

Sounds like you are blaming the doctor for the disease.

7. Global Competitiveness Index:

Have you even read the thing?  Three of the four countries who have moved ahead of the US are Sweden, Finland, and Switzerland.  Sounds like we need more socialism not less.

The report specifically mentions anti-government attitudes and failure to raise the debt limit as reasons for the downgrade.

6:18 PM PT: Minor erratum:   the six year low point for unemployment occurred in  March, 2007 not march 2008

7:26 PM PT: Thank you everyone for your responses!  And thank you for the opportunity to be seen on the Community Spotlight. Maybe it will help bring this info to more people who can put it to good use.

Thanks for pointing out errors. They have been corrected in the text

Thanks again to all and I will continue ro revisit the diary to respond to new posts.

10:16 PM PT: My first time on the rec list!

I'd like to thank all the little people :-)


Seriously, it's an honor. Thanks for your attention and regard.

Baz

Wed Feb 01, 2012 at  7:53 AM PT: Substantial revisions to the Misery Index figures and interpretation.


Originally posted to bmcphail on Fri Jan 27, 2012 at 09:50 AM PST.

Also republished by Community Spotlight.

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