President Obama, I Fixed Your Chart For You

You may have recently seen the new chart put out by the Obama administration pushing the idea that the President’s policies are responsible for the decrease in newly unemployed. It looks something exactly like this:

Now… as a piece of visual political propaganda, this is brilliant. The colors draw sharp contrast, the symmetry is appealing. And the numbers are right.

But keep in mind how carefully I phrased the units being used “decrease in newly unemployed”. This isn’t an increase in jobs or a decrease in unemployment. It just means that we’re losing jobs slower that we were before.

Make no mistake… this is good news. And we can bicker back and forth as to whether President Obama’s policies are responsible for this slowdown in newly lost jobs. He would say yes and point to the stimulus.

But in order to point effectively to the stimulus, we would have to take a look at the expectations of the stimulus. Everyone expected that we would come out of the recession eventually and that job loss would slow. The question was how quickly that would happen.

To help us visualize the expectations of the stimulus against the reality of it, I’ve added that piece of context to the graph. See if you can spot it.

I got these numbers by multiplying the labor force by the expected unemployment rate with the stimulus (per this chart) and then subtracting that number from the labor force times the actual unemployment rate.

One may say that this is unfair. I would actually kind of agree. Economic predictions are pretty hard to make. But the original chart is similarly unfair. Keep in mind that it took a few months to get the stimulus money out the door. In fact, they didn’t even release any data on the stimulus funds for second quarter 2009 (the first stimulus report was for third quarter 2009).

Side Note: This data has actually been scrubbed from the website. They’ve re-compiled the data into new categories. But I’m wary about trusting the data since it looks like, according to the official data, about $12 billion of the stimulus was spent before the stimulus was signed with projects being approved as early as 2000.

So the first several months of decline don’t even reflect the impact of the stimulus. The decline in new job losses seems to be just a happy coincidence that looks good on a chart.

17 comments

  1. Jackson says:

    To add yet more symmetry, how would you feel about adding some bars on the top-left side for the ~$152 billion Bush Stimulus in 2008? That is, the $300/$600 checks people got: http://www.irs.gov/newsroom/article/0,,id=179181,00.html

  2. jakemckenzie says:

    You and I may not see eye to eye on every topic, but this was really good work. I do support the stimulus, but I don’t support the spreading of propaganda for it. Good job again Mathias, but I have to ask do you support the proposed spending freeze by republicans?

  3. politicalmath says:

    Jake,

    I support the spending freeze proposed by the Democrats! I think it’s a tiny cut and more political rhetoric than useful policy, but a cut is a cut.

  4. Dan says:

    “The decline in new job losses seems to be just a happy coincidence…” Ha ha I love how it is always like this when it comes to President Obama doing something positive for the country. It wouldn’t surprise me that the author of the article is a HUGE conservative anti-any-Obama policies. Also, I know this isn’t in the article but let’s just put the facts on the table. Deficit is this big now, not because of the Obama administration but because of the Bush administration. When Bush came into power there was a $200 billion surplus. By the time he left office the country had a $1 TRILLION dollar deficit! Not counting the $7 trillion deficit it would take in the next decade for spending. Remember this is all BEFORE Obama came in power.

  5. politicalmath says:

    Dan,

    I’m sorry… I must not have been clear. I wasn’t talking about jobs, not the deficit. Is it your position that the stimulus managed to add jobs before a dime of it was even spent? Because that was the context of my comment. I was simply taking note that the major decreases we see in this graph had already taken place before any of the stimulus money had gone out. Is President Obama then responsible for decreases that happened before any of his policies were in place? Or would it have happened anyway?

  6. mooshhhh says:

    Let’s just piss on the parade. I guess it’s a good thing that you go to such lengths to explain to (predominantly your) readers that, in fact, job loss is still happening.

    The graph (from Obama) is based on numbers that even you acknowledge to be correct. Furthermore, it states exactly what it represents.

    Why don’t you submit YOUR “alternative take” to the Bureau of Labor Statistics, or factcheck.org or anyone who would be considered non-partisan and see if they can substantiate your bullsh!t?

  7. Justin says:

    Hey man, I listened to the President in Henderson, NV talk today again about the necessity to bail out GM and Chrysler. As I was listening I was wondering how Ford was able to survive this meltdown. I was wondering why Ford was even able to turn a profit. Could you explain to me why GM and Chrysler required the funds in order to survive and Ford did not? Thanks man, you do a great job!

  8. politicalmath says:

    mooshhh,

    You’re free to do the math yourself if you like. You can… you know… DO the math, can’t you?

    If not, I’d be happy to help.

  9. ARDAvis says:

    Thanks for the good information.

    In reference to job losses slowing down, I look at a dam analogy. When a dam starts to break you get a small amount of water leaking out. As the break gets to its maximum, you get a huge flow of water. While the dam remains broken the water flow will start to slow down as the level of the water behind the dam gets lower. Is it really good that less water is flowing out from behind the dam? Is it a reflection the dam isn’t as borken? No it doesn’t reflect that the dam is less broken, there is just less water to leak.

    The same holds true with the economy. Stress in the economy will start with small job losses followed by greater stress in the economy and greater job losses. At some point the job losses lessen because there are fewer jobs cuts that can be made. That isn’t necessarily a reflection of a strengthening of the economy.

  10. mooshhhh says:

    Oh – I can do the math. I did not dispute your ability to cipher, only your ability to be unbiased enough to acknowledge that the horrific mess inherited by Obama is actually being addressed.

  11. politicalmath says:

    mooshhhh,

    I’m not questioning the scale of the recession. I’m questioning the President’s ability to heal the economy. The economy is a self-healing entity. Presidential policies may have either a helpful or an adverse effect on that, but it is largely self-driven. No serious thinking person doubted that job losses would eventually slow.

    President Obama’s graph is taking credit for the economy’s self-healing. I’m pointing out that, at one point, he said, “If we don’t pass the stimulus, something really bad will happen. If we do pass the stimulus, we’ll get these really awesome results.” My graph shows the results he said we would get. I think it’s fair to point out we didn’t get them.

    The natural rebuttal would be “But we didn’t realize at that time exactly how much Bush screwed up the economy!” to which my reply is “With such a poor understanding, why did we think we knew how to fix it?”

  12. LOUDelf says:

    mooshhhh:

    The original chart at the top is somewhat dubious, hence the need for some explanation. If no one ever got re-hired or hired, the job loss numbers would eventually decrease as no one would have have a job to lose. This is where the chart is simply manipulating the numbers. To accept the top chart as-is and clap the administration on the back is biased in and of itself.

    The follow up chart and comments merely provide better explanation and more reasonable information. As pointed out, the job-losses were decreasing before one dime of “stimulus” cash was distributed.

  13. Wakefield Tolbert says:

    The economy is a self-healing entity.

    I agree. The stimulus is akin to pumping adrenalin into the heart to get it pumping faster, when perhaps what the body really needs is a good rest and to get in shape with some aerobics later. Things get better when they get better, and not before.

    This seems ever the story with recessions and depressions (should we really face the latter and wish to avoid Austrian dictators as the alleged historic proximate cause of pulling out of one!)

    At long last someone says what needs saying. The market will get better when the market is ready to get better and people spend. When there is no market justification for the things government wishes to “stimulate”, it is also akin to polishing the cart, when in fact what you really need to do (if a “stimulus” is what you really want for the economy) is to slap the horse (or feed it) rather than grunting while trying to push the cart into the horses butt, etc.

    So much for animal analogies. But that’s just my simple, country boy take.

    Politicians often find capitalism a counterintuitive concept, and confuse said cart and horse.

  14. Al Maurer says:

    I blogged on that chart too and took a different tack to it. I like what you’ve done.

  15. Oh boy, I love The President . Anyone see his latest approval ratings?

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