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The Road to Recovery

February 27, 2010

I recently saw this graph, sent in an email from David Plouffe of Organizing for America. Mr. Plouffe says that this graph proves the Obama administration is leading the way to a  recovery:

Tells a pretty compelling story, right?  The evil red lines on the left contrasted to the pretty blue lines on the right.  And the source is the Bureau of Labor Statistics–what could be more non-partisan?

No so fast.

The graph is deceitful and misleading in a number of ways. First is the labeling of the chart.   “US Job Loss” doesn’t show overall unemployment numbers as you would typically assume–but rather the rate of change in unemployment.

To use an automobile analogy: If your accelerator gets stuck and you car runs off I-25 at 75 mph, you’re in trouble.  If the car stops it’s rapid acceleration at around 85 mph (what this graph is really showing), does that mean you’re safe?

There’s a big difference between slowing down the rate of unemployment and lowering the actual total. Here are the overall unemployment numbers from the BLS:

Whoops!  Doesn’t look so good for Plouffe’s home team.  This goes all the way back to the beginning of the Bush Administration.  Notice the overall low unemployment rate and the rapid rise in the last year.  I’m not showing the same thing that Plouffe does, am I?  Let’s look at the BLS net change in unemployment, monthly, since 2000:

This is the same data that Plouffe shows–but he’s only showing the last two years.  And he’s flipped the graph upside down for dramatic effect.  Further, he’s replaced the see-saw reality of this chart which plots monthly data points with thick bars that enhance his conclusion that we’re on the road to an Obama-induced recovery.  Good thing they released this chart already–figures this week show the numbers going in the wrong direction again.

But beyond the mere playing with numbers, there are hidden assumptions that totally blow anything he might be trying to say.

It is not the president and his administration who spend money and attempt to influence unemployment–it’s Congress.  And since 2006, the Democrats have controlled both Congress and spending.  So if they’re going to take credit for reducing the rising rate of unemployment then they also have to take the blame for creating it.

In reality the government–neither Congress nor the administration–cannot create jobs and sustained economic growth.  That’s Keynesian economics and it has been proven wrong time and again.   If one looks further at types of jobs, it will be apparent that all the government has “created or saved” are union and government jobs.

To return to the car analogy: If you’re slowing down, does that mean you’ve been able to apply the brakes or that you’re running through brush? If you have regained control, are you back on I-25 and the road to recovery? Or the frontage road leading to socialism?

One Comment
  1. March 6, 2010 5:20 pm

    My friend over at Political Math also blogged on this horrific chart.

    He’s taken a different approach to it and it is very interesting.

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