The American Statistics Crisis

Someone, who shall remain nameless (but don't worry, I still love you), sends me lots of forwarded e-mails with a political purpose. While I don't mind so much that the e-mail are political in nature, it really grinds my gears that they misrepresent statistics in order to make their point. Here is the latest example:

"In just one year. Remember the election in 2006?

Thought you might like to read the following:

A little over one year ago:

1) Consumer confidence stood at a 2 1/2 year high;
2) Regular gasoline sold for $2.19 a gallon;
3) The unemployment rate was 4.5%.

Since voting in a Democratic Congress in 2006 we have seen:
1) Consumer confidence plummet;
2) The cost of regular gasoline soar to over $3.50 a gallon;
3) Unemployment up to 5% (a 10% increase);
4) American households have seen $2.3 trillion in equity value evaporate
(stock and mutual fund losses);
5) Americans have seen their home equity drop by $1.2 trillion dollars;
6) 1% of American homes are in foreclosure.

America voted for change in 2006, and we got it!

Remember it's Congress that makes law not the President. He has to work
with what's handed to him."

To start, a couple of points:

1) The mortgage crisis was not caused by congress, rather it was caused by lenders giving people who couldn't afford them home loans. This issue has been building for years. It has not suddenly appeared since 2006. This is what has been driving the downward spiral of the economy. Again, not anything to do with congress.

2) Oil prices are not in line with supply and demand. There is more than enough oil supply right now even with the conflict in the middle east. If you are familiar with supply/demand economics, this begs the question, why is gas so expensive? Well, right now congress is asking that question to the oil companies who had record profit again this year.

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2008/04/02/MNU7VU217.DTL

Again, congress has nothing to do with gas prices. Unless you want a state run oil industry...

3) While it is true that congress, and not the president, make laws, the president does have veto power. And, he has used that power. To my knowledge this congress has been unable to get the 2/3rd vote necessary to overturn a presidential veto. So, for the person that wrote this and seems to have forgotten the checks-and-balances system of government, the president does have some control over the laws passed. Besides that...I'm not really sure that congress has passed any laws that could even effect the economy to this degree.

4) The abuse of statistics in our country is atrocious..probably just as bad as the abuse of formal English (that is a reference to another e-mail sent by the same person). To save myself some calculations I am using some stuff from: http://www.whatsthequestion.org/?q=node/2564

"As is often the case with such messages, they tend to be based on very selective statistics, and tend to put the side they favor in the best light. With this particular message, the problem is not with the statistics themselves - they tend to bear out. No, the problem is with the standard being used as measurement. The message holds up the status of the various statistics as a measuring stick, and compares current conditions to those. This conveniently ignores prior statistics. For example, if we use a similar comparison as the one in the message, we can come up with a very different picture. Below, we compare the stats in late 2000-early 2001, to the same stats in late 2004-early 2005. This represents the shift from the Clinton administration, with a Republican Congress, to the Bush administration with a Republican Congress:

In March of 2000, 1 year before a Republican congress got a Republican president:

The consumer price index was at 137.1
Price of Gas was $1.80
Unemployment rate was at 4.3%
Number of non-business bankruptcy filings in 2001 - 1,452,030
GDP - Gross Domestic Product - $10.1 trillion
National Public Debt (9/29/00) - $5.7 trillion
Debt as percentage of GDP - 56%
Minimum Wage $5.15
Median Family income (in 2004 dollars) - $55,647
Consumer Price Index 177.1
Personal Saving Rate 2%
Trade Balance - $32.8 Billion deficit
Average number of weeks staying unemployed - 12.8
Number of people unemployed for more than 15 weeks - 1.5 million

In the four years that followed, all under Republican control of Congress and a Republican president:

The consumer price index fell to 103 (30%+ drop)
The price of gas rose to over $2
The unemployment rate rose to 5.1% (nearly 25% increase)
Number of non-business bankruptcy filings in 2005 rose - 2,039,214 (over 30% increase)
GDP - Gross Domestic Product - $12.4 trillion (10% increase)
National Public Debt (9/29/00) - $7.4 trillion (29% increase)
Debt as percentage of GDP rose - 60%
Minimum Wage stayed unchanged $5.15
Median Family income fell (in 2004 dollars) - $54,061
Consumer Price Index rose to 195.3
Personal Saving Rate dropped to .9%
Trade Balance - $53.5 Billion deficit (63% increase)
Average number of weeks staying unemployed increased- 19.3
Number of people unemployed for more than 15 weeks increased - 2.8 million"

Statistics should never be believed without their broader context because statistics can be manipulated to say just about anything anyone wants.

So here are some stats that I just calculated based on a history of US recessions and their corresponding presidents and congresses. There have been 20 recessions in the US since 1900. Of those only 3 (15%) were completely during democratic presidencies. Another 3 (15%) were between presidencies so were under both a democrat and republican president.

The remaining 14 (70%) US recessions have been under republican presidents. Of those 14 recessions, only two came when there was a democratic congress.

What does this mean? Maybe nothing, but at the very least it means that you can't look at statistics for a one year period and put any meaning into them when you are talking about complex issues that take years to develop.

So please America, if you want to have an intelligent discussion about politics, don't just pass on trite forwards with little relevance to reality. Look up the facts and ask questions of those on your e-mail list. Don't rely on some anonymous, out of context statistics to do the thinking for you.