Archive for August 31, 2011

[FIXED] Three Charts To E-Mail Your Right Wing Brother-In-Law

Dear goodness, not again.

I had a nice healthy rant all written for this because people who use charts and data to lie piss me off and the self-righteous ones are the worst. But it detracted from this post, so if you want to, you can read it here. Not work that I’m proud of, but it’s fun to write every once in a while.

There is a piece called “The Three Charts to E-Mail Your Right Wing Brother-In-Law” that is making the rounds and impressing many people who don’t know too much about the underlying data. Which is almost everyone.

So lets dig into these charts and how we can fix them.

The first one is about Federal Spending and claims that “Bush Spending” saw an 88% increase while Obama spending has seen only a 7.2% increase.

Bush-Obama Spending Chart

The problems with this chart in no particular order:

Bush was not responsible for all of 2009 spending

These two charts assume that the entirety of the 2009 fiscal situation lies squarely on George W. Bush’s shoulders. I would like to posit that this is unfair. There was a bill that got passed (you may have heard of it) that goes by the popular name “the stimulus”. It started immediately spending vast sums of money starting in the fiscal year 2009. George W. Bush had nothing to do with this bill.

I did a little digging and found that the budget Bush proposed for 2009 was for $3.09 trillion while the amount spent during that fiscal year was $3.52 trillion. Now, this might not matter if these kinds of variations were common. But here is a graph of the difference between the proposed spending and the actual spending for the past 10 years. We’re going to play a game called “one of these things is not like the others”.

We can see that 2009 is a huge outlier… the difference between what was proposed and what was spent is 5 times more than any other year ( $429.1 billion).

Yep… that’s what happens when you propose vast amounts of immediate spending in the middle of a fiscal year. Given that Bush had to sign the budget he was given by a Democratic Congress, I think it’s charitable to say that he is “responsible” for what he proposed: the original $3.09 trillion.

Data is not adjusted for inflation

This is a minor quibble, but it matters because it’s a sign that the person who created the chart doesn’t care about accuracy. Ignoring inflation will always make spending increases look drastic because we’re compounding real increases with inflation increases. It also matters because, if we adjust for inflation and use Bush’s last spending proposal, he increased spending by 39% or about 5% a year.

The chart stops tracking data at a very convenient place

President Obama’s budget proposal basically has us maintaining a stable level of spending until 2014, when it starts increasing drastically. The author chose not to chart this data, even though it was right there in front of him. Why? I assume it’s because he’s a partisan hack, but I’m not altogether prepared to rule out that he is, in fact, just an idiot.

By including these spending targets, we get a much more “apples to apples” comparison where we’re comparing 8 years of “Bush spending” to 7 years of “Obama spending”.

If we take all these problems and put them together, we end up with another chart altogether.

Chart 2

The second chart says that Bush increased the deficit and Obama is decreasing it.

Bush-Obama Deficit Chart

First of all, the same “Bush is responsible for everything in FY2009″ thing above applies here too. In addition to that:

The stimulus was front-loaded with tax cuts

I know that right wingers will maintain till their dying breath that tax cuts don’t reduce revenue, they increase revenue. I’m not really in that camp and this is my blog, so I get to do things my way. So there.

According to CNN at the time, the stimulus was going to save the average household $1,179. Using the 2009 Census estimate of 112.6 million households, that comes out to $132.7 billion. If we add that to the $429 billion difference between Bush’s spending proposal and the spending reality and then subtract that from the final deficit, we get a deficit of $894.4 billion.

$132.7 billion in stimulus tax cuts
+ $429.1 billion in un-planned spending
- $1,415.7 billion actual deficit
======================
$836.2 billion of the 2009 deficit that is “Bush’s fault”

All of the reductions are in the future

Notice how the chart goes down in 2012 and 2013? Notice how neither of those years have happened? This is because President Obama’s 2012 budget has made some pretty incredible claims.

To look at these claims with our feet on the ground, let’s first look at a revenue chart.

This is a chart that shows the increase and decrease of federal revenue changes over a 12 month collection period. We can see that recessions mean revenues decrease by as much as 15% year-to-year and that in boom times they can increase by a little over 10% year-to-year. The biggest increase we’ve ever seen was 12% year-to-year increase (from the 2004 fiscal year to the 2005 fiscal year).

Now this is the same chart including the revenue increases that the Obama budget proposal assumes will happen.

Now that is some f***ing audacious hope right there.

The Obama budget assumes for the sake of future budget planning that we will blow 30 years of revenue data out of the water by clocking in a 21% revenue increase in 2012 and a 14% revenue increase in 2013. Then they assume things will “calm down” to a stable 7-8% annual increase, which is merely massive (as opposed to completely insane).

This is a particularly important point because the estimates that the Obama team made were not just optimistic. They assume we are on some kind of federal revenue breakthrough unheard in this generation.

The revenue assumptions in this budget proposal have sped right past optimism and into delusion.

For the sake of fixing this second chart, I am going to be incredibly generous and assume that we see 9% revenue growth over the next 4 years. This would be very good news for our deficit situation and is extremely unlikely. It is not, however, technically impossible, so we’ll give some benefit of the doubt there.

Fixing Chart 2

Accounting for these issues, assuming that we hit the spending targets we’re aiming for (a big if but one I’m willing to let it slide) here is the second chart updated.

Chart 3:

Bush-Obama-Jobs-Chart

Permutations of this chart have been around for some time. President Obama’s team first started using it in mid 2009 to promote the idea that the stimulus was working. It’s actually the most honest of the charts here, but there are still some problems with it.

Using Only Establishment Private Jobs Data

This makes things look a little better because we’ve been losing public sector jobs over the last year or two. I’m not saying “counting only private sector jobs is an invalid measurement”. What I am saying is that it is a red flag that the person may be cherry-picking data to get the best result.

As for using establishment data instead of household survey data, there’s nothing particularly wrong with that, but it is good to note that the household survey counts about 10 million more jobs and  covers people who are employed but not on a payroll, so it will give a somewhat more complete picture of the employment situation. And, unsurprisingly, the data doesn’t look quite as good for Obama. It’s not particularly bad… it’s just “meh”.

It’s Bush’s Fault Only When It’s Bad

But the funniest thing about this chart? The author has spent the last 2 charts convincing us that EVERYTHING that happened in the 2009 fiscal year was Bush’s fault. In this chart, the tune has changed entirely because, if the author gave Bush credit to the end of the 2009 fiscal year, it would look like Bush saved the day. The most drastic reductions in job loss would then fall under the “Bush’s fault” umbrella.

And we can’t have that. When it comes to a choice between honest consistency and making George W. Bush look bad, the author didn’t even blink. So, in a move that is so dishonest is is actually funny, the chart author basically says, “All jobs saved are due to President Obama and his courageous stimulus, but I blame George W. Bush for all the stimulus spending and stimulus tax cuts that created those jobs.”

I created a alternate version of this chart that represents my complaints listed above, but I want to make note that, while I feel the previous “fixes” are a better representation of reality, this chart is not nearly as fair as those were. I personally prefer the BLS household data (which I used in this chart) over the payroll data (which the original chart author used), but I’m not comfortable giving Bush credit for stopping job losses 9 months after he left office. I’m representing it this way only because I want to give an indication of how the author would have done it if he or she maintained an internal consistency.

Alternate Intro to the “Three Charts” Post

This was my original intro to the “Three Charts” post that I’ve just put up. Normally my rational brain gets the better of me and I delete this kind of crap before I post it. It is neither charitable nor professional. You’ve been warned.

Once again, the truth rolls its eyes and starts tying it’s laces while the lie is half-way around the world. There is a piece called “The Three Charts to E-Mail Your Right Wing Brother-In-Law” that is making the rounds and impressing many people who didn’t score high on the “critical thinking” portion of the test.

Whoever made this chart is an asshole. Straight up asshole. “Your Right Wing Brother-In-Law”? Really? I mean… I get it because no one who is related to this person by blood could ever be so stupid. Nice little undercurrent enforcing the concept of hereditary intelligence. Yeah… I heard a lot of that kind of shit when I visited the deep South and ran into the local racist assholes. Just enough plausible deniability to claim innocence, but deep down you know that, due to your pedigree, you’re just better than other people.

And someone who disagrees with you could never be your friend. I mean… you? Voluntarily associate with someone who doesn’t agree with you? Actually have friends who might challenge you on something? Heaven forbid. Disagreeing with you is something only the lowly and inferior do and you would never be around them of your own volition, so it has to be someone who is “in the family, but not part of the family”.

No, the right wing brother in law just mouths off without knowing the facts, so it is up to the great brainiac hope of the family to inject reality into the conversation. Is that a banana in your pocket or are you just fantasizing about winning an argument in real life without stuttering and turning red in the face?

And as salty icing on the moldy self-righteous cake why do YOU need to explain this to the “brother-in-law” specifically? It it because your wife or sister is too stupid or too meek to explain it to him herself? The weak-minded damsel will be saved by you, the powerful, witty, urbane, strong, righteous intellectual knight. And everyone will love you for being the big savior of the family conversation.

I find that creepy, dismissive and sexist. Everyone who giggles at it and re-shares it should be ashamed of themselves but won’t be because they aren’t introspective enough to stop stroking their own intellectual egos for the time it takes to feel shame.

See? This is why I usually delete that kind of stuff.

I’m Still Catching Up

I want to send out this apology. Policy analysis is not my job… I just do this for fun. That last post was meant to explain things I couldn’t explain over Twitter (to an audience of about 15 people who already discussing it).

Instead, I got almost as many comments and hits as I’ve gotten on everything else I’ve done here over the past 2 years. I’m trying to digest it all, but it’s crunch time at my “normal job”.

Thank you to everyone who has commented and engaged the topic. I am going to try to do a follow-up in the coming week that addresses more of the data.

Rick Perry And Texas Job Numbers

Full disclosure: I don’t like Rick Perry for our next president. I have my reasons that aren’t worth going into here. However, when I was watching the GOP debate and pro-Perry people started bringing up Rick Perry’s job numbers as a cudgel against other candidates, I looked into the BLS data on Texas jobs. Having familiarized myself with the data, I started noticing claims on the Texas jobs data that started popping up that directly contradicted what I was seeing in the data. So I wanted to clear up a couple of these common misconceptions.

Note: If you are going to comment and you want to introduce some new objection to the Texas job numbers, you MUST provide original data. I spent about 4 hours digging through raw data to write this post. I don’t want you to point to some pundit or blog post and take it on their authority, because I’ve already researched several idiot pundits who are talking directly out of their asses when it comes to the data. I want you to point to the raw data that I can examine for myself. This means links. I refuse to waste any more of my time on speculative bullshit or “Well, I’ll wager that the Texas jobs don’t really count because…” If you’re willing to wager, take that money and put it towards finding the actual data. In short, put up or shut up.

I’m not cranky, I swear.

Anyway, let’s deal with the complaints in no particular order:

“Texas has an unemployment rate of 8.2%. That’s hardly exceptional.”

See… that’s what I thought when I started looking at the data. I knew that Utah had a lower unemployment rate than Texas and I kept hearing that Texas was go great at jobs, blah, blah, blah, so I looked up the unemployment rate.

Nothing special.

So I was going to drive my point home that Texas was nothing special by looking at their raw employment numbers and reporting on those. That’s when I saw this:

This may not look like anything special, but I’ve been looking closely at employment data for a couple years now and I’ve become very accustomed to seeing data that looks like this.

In a “normal” employment data set, we can easily look at it and say “Yep, that’s where the recession happened. Sucks to be us.” But not with Texas. With Texas, we say “Damn. Looks like they’ve recovered already.”

(To get to this data, go to this link http://data.bls.gov/cgi-bin/dsrv?la then select the state or states you want, the select “Statewide”, then select the states again, then select the metrics you want to see.)

But if Texas has so many jobs, why do they have such a high unemployment rate? Let’s take a closer look at that data.

As a percentage of the number of pre-recession jobs, here is a chart of the growth of a selection of states. (For clarity, in this chart I selected a number of the largest states and tried to focus on states that have relatively good economic reputations. I did not chart all 50 states b/c it would have taken me too long.)

We can see that Texas has grown the fastest, having increased jobs by 2.2% since the recession started. I want to take a moment and point out that second place is held by North Dakota. I added North Dakota to my list of states  to show something very important. North Dakota currently has the lowest unemployment rate of any state at 3.2%. And yet Texas is adding jobs at a faster rate than North Dakota. How can this be?

The reason is that people are flocking to Texas in massive numbers. Starting at the beginning of the recession (December 2007), let’s look at how this set of states have grown in their labor force.

As you can see, Texas isn’t just the fastest growing… it’s growing over twice as fast as the second fastest state and three times as fast as the third. Given that Texas is (to borrow a technical term) f***ing huge, this growth is incredible.

People are flocking to Texas in massive numbers. This is speculative, but it *seems* that people are moving to Texas looking for jobs rather than moving to Texas for a job they already have lined up. This would explain why Texas is adding jobs faster than any other state but still has a relatively high unemployment rate.

“Sure, Texas has lots of jobs, but they’re mostly low-paying/minimum wage jobs”

Let’s look at the data. Here’s a link: Occupational Employment and Wage Estimates

Texas median hourly wage is $15.14…  almost exactly in the middle of the pack (28th out of 51 regions). Given that they’ve seen exceptional job growth (and these other states have not) this does not seem exceptionally low.

But the implication here is that the new jobs in Texas, the jobs that Texas seems to stand alone in creating at such a remarkable pace, are low paying jobs and don’t really count.

If this were true, all these new low-paying jobs should be dragging down the wages data, right? But if we look at the wages data since the beginning of the recession (click to enlarge, states are listed alphabetically)

And it turns out that the opposite is true. Since the recession started hourly wages in Texas have increased at a 6th fastest pace in the nation.

As a side note, the only blue state that has faster growing wages is Hawaii. Just thought I’d get that jab in since so many people have been making snarky “Yeah, I could get a job in Texas is I wanted to flip burgers!” comments at me on Twitter.

“Texas is oil country and the recent energy boom is responsible for the incredible jobs increase.”

In identifying “energy jobs” I cast as wide a net as possible. If you want to replicate my findings, go to this link: http://www.bls.gov/sae/data.htm, click on “One-Screen Data Search”, then select “Texas”, then select “Statewide”, then in Supersectors select “Mining and Logging”, “Non-Durable Goods” and “Transportation and Utilities” and then in Industries select “Mining and Logging”, “Natural Gas Distribution”, “Electric Power Generation” and “Petroleum and Coal Products Manufacturing”.

Tedious, I know, but transparency is important and this is how you get the data.

When we finally get the data, we discover that energy isn’t really the biggest part of the Texas economy. Increases in jobs in the energy sector (or closely related to it) account for about 25% of the job increases in the last year. Since the energy sector only makes up 3% of all employment, there is some truth to this claim.

However, take the energy sector completely out of the equation and Texas is still growing faster than any other state. This indicates to us that the energy sector is not a single sector saving Texas from the same economic fate as the rest of the states. It’s not hurting, but Texas would still be growing like a weed without it.

“Texas has 100,000 unsustainable public sector jobs that inflate the growth numbers.”

I’m not sure where this one comes from, but the numbers are these (and can be found by selecting government employment from the data wizard at this link http://www.bls.gov/sae/data.htm):

Counting from the beginning of the recession (December 2007) the Texas public sector has grown 3.8%, or a little under 70,000 employees. This is faster than normal employment, but it’s not off the charts.

Given that the Texas economy has grown so much and private sector jobs have grown so much, that doesn’t strike me as an unsustainable growth in the public sector.

But, just in case you’re really worried about it, you can lay your fears to rest because in the last year the Texas public sector has shrunk by 26,000 jobs. In the last 12 months, Texas lost 31,300 federal employees, trimmed 3,800 state jobs, and increased local government jobs by 8,400 jobs.

(To be fair, this was partially driven by the role Texas employees played in the census, which inflated federal job numbers this time last year. Since the census numbers stabilized, federal employment has been at about break-even.)

As you can see, we’re nowhere near the “100,000 unsustainable jobs” number.

My Personal Favorite Chart

I’ll leave you with my personal favorite chart. I mentioned at the beginning that Texas is seeing high unemployment in a large part because they’re growing so damn fast. The problem with this from a charts and graphs perspective is that it leaves worse states off the hook, making them look better than they actually are. Looking at unemployment alone, we would conclude that Wisconsin has a better economy than Texas. But Wisconsin is still 120K short of it’s pre-recession numbers. The only reason they look better than Texas is because 32,000 people fled the state.

During that time, 739,000 people fled into Texas. Anyone who takes that data and pretends that this is somehow bad news for Texas is simply not being honest. At the worst, I’d call it a good problem to have.

So, to give something of a better feeling for the economic situation across states, this chart takes the population of the states I selected above and judges the current job situation against the population as it stood at the beginning of the recession.

Using that metric, Texas would have a very low unemployment rate of 2.3%. But the fact that unemployment in the United States is fluid means that the unemployed flock to a place where there are jobs, which inflates its unemployment rate (at least in the short term). It’s not a bad thing for Texas… it just looks bad when dealing with the isolated “unemployment %” statistic.

UPDATE: @francisgagnon on Twitter felt that this chart was dishonest because it charts Texas as having 2.3% unemployment and (in his words so I don’t get him wrong): “It assumes immigrants create no jobs. But more people = more consumers = more jobs.”

He is absolutely right about this. I tried to be clear above that this chart doesn’t account for the fluid nature of an economy with immigration and departures of hundreds of thousands of people, but I don’t want to leave anyone with the wrong impression. So here it is: This chart doesn’t account for the fluid nature of an economy with immigrations and departures of hundreds of thousands of people. The point of this chart is not to say “Texas should have 2.3% unemployment if only things were fair.” Instead, it is an attempt to chart job growth in such a way that controls for people leaving one job market to enter another. To say “Wisconsin has a better job market than Texas because its unemployment rate is 0.6% lower” is a wholly untrue statement even though it cites accurate numbers. What this chart is meant to do is not posit a counter-factual, but to give a visual representation of the employment reality that is obscured by the way we calculate unemployment numbers.

END UPDATE

And… that’s it.

You may have noticed that I don’t mention Rick Perry very much here. That is because Rick Perry is, in my opinion, ancillary to this entire discussion. He was governor while these these numbers happened, so good for him. Maybe that means these jobs they are his “fault”. Maybe the job situation is the result of his policies. Or maybe Texas is simply the least bad option in a search for a favorable economic climate.

That is not an argument I’m having at this exact moment. My point is to show that most of the “excuses” you will hear about Texas’ job statistics are based in nothing more than a hope that Rick Perry had nothing to do with them and not on a sound understanding of the data.

My advice to anti-Perry advocates is this: Give up talking about Texas jobs. Texas is an incredible outlier among the states when it comes to jobs. Not only are they creating them, they’re creating ones with higher wages.

One can argue that Perry had very little to do with the job situation in Texas, but such a person should be probably prepare themselves for the consequences of that line of reasoning. If Rick Perry had nothing to do with creating jobs in Texas, than why does Obama have something to do with creating jobs anywhere? And why would someone advocate any sort of “job creating” policies if policies don’t seem to matter when it comes to the decade long governor of Texas? In short, it seems to me that this line of reasoning, in addition to sounding desperate and partisan, hogties its adherents into a position where they are simultaneously saying that government doesn’t create jobs while arguing for a set of policies where government will create jobs.

Or, to an uncharitable eye, it seem they are saying “Policies create jobs when they are policies I like. They don’t create jobs when they are policies I dislike.”

People will continue to argue about the data. But hopefully this will be helpful in sorting out reality from wishful and desperate thinking. I mentioned on Twitter that the Texas jobs situation was nothing short of miraculous. This is why I said that and why I’m standing by that statement.