The Entreblog!

My apologies for the long post but, holding public figures accountable for their misuse of statistics is important. This post isn’t meant to be partisan, only to critically think about statistics that are being used by politicians. Any examples of politicians of any kind misusing statistics like this are welcome in the comments and may be fodder for future posts.

Recently, the Obama Administration has been publicizing a graph by Nancy Pelosi’s team comparing the last year of the Bush Administration with the first year of the Obama Administration.

It’s an interesting graph and it’s meant to show that Bush Administration (and Republican) policies were losing the nation jobs while Obama Administration (and Democrat) policies are bringing those jobs back. At first blush, it’s pretty damning.

However, there are a number of problems with a comparison like this:

• It makes the assumption that job losses are entirely under the control, and the responsibility, of the presidency. For this to be true, the government would need to make all employment decisions. That would mean the government owns all factors of employment, which is, of course, Socialism. The US is not a Socialist state, so this is not true. Of course, government policies certainly have some effect but the message of this graph is not one of partial responsibility.

• It assumes government policies have immediate impact. Of course, this isn’t true. We’ve spent about half of the economic stimulus money, the vast majority of which has gone to supporting state governments, not private employment. The government has spent about $350 billion to increase the size of government. Which brings me to my next point.

• It assumes all jobs are created equal. What industry are these jobs in? How much do they pay? Let’s see:

  

  As you can see from this chart, the number of government jobs has been increasing while the number of private sector jobs has dropped like a rock. This tells us that the reason the unemployment rate has been going back up because of hiring in the government sector, the one area the Obama Administration does have control. We can see, though, the stimulus isn’t doing anything for the private sector.

  Now, what about how much these new jobs pay? Here’s a table that shows the total cost of employment for workers by industry:

As you can see, government workers are the second highest-paid workers in the nation, after scientists (many of whom receive funding from the government).

The bottom line is the jobs the Obama Administration is creating are overwhelmingly in the government sector and those government sector jobs are paying more.

• It assumes the job losses stem from recent incidents. True, the economy collapsed in 2008, definitely on Bush’s watch. But the fundamental actions that caused the collapse stem from activities dating back to the 70′s. It was a time bomb planted in the 70′s that went off in 2008

• It compares apples to oranges. The last year of a 2-term presidency is hardly comparable with the first year of a first-term president. If we want to make all of the bad assumptions above, let’s at least compare the first year of Bush’s term to the first year of Obama’s term. Here’s what the data shows:

As you can see, Bush lost only ¼ of the jobs Obama has lost in his first year. Not only that, but during his eight years, Bush oversaw a net gain in jobs of 4.6 million jobs. That means Obama needs to net create 9.5 million jobs just to break even. That’s a pretty tall order considering the economy is still net losing jobs.

Now, before all you Bush apologists start mocking the Obama supporters, remember: this data is no more valid than the chart Obama and Pelosi are pushing for the reasons discussed above. I just wanted to compare bad apples to bad apples instead of bad oranges.

The bottom line is this: this comparison is invalid and unfair. It certainly doesn’t reflect the post-partisan world we were promised and continues the rhetoric we hear that blames the Bush Administration for all the problems Obama isn’t solving.

What I think would do the employment levels some good is for Obama to lay out a simple, concrete plan and stick to it. This would create the certainty private industry needs to plan for the future and make hiring decisions.