All posts by politicalmath

graphs, unemployment

What The July Unemployement Rate Means (And Doesn't Mean)

9 Comments

Today the unemployment rate for July 2009 was released by the Bureau of Labor Statistics. The rate dropped from 9.5% in June to 9.4% in July.

Before I explain why this might not be as awesome as it looks, let me just say “hooray!” for what seems like a slowing in the rise of the unemployment rate. I am ecstatic to see that the economy is not accelerating downward.

Stupid Moralizing (skip if you don’t care)

Some people seem to almost be cheering the decline of the economy for political purposes. Before last November, those people were mostly liberals. After January, those people were mostly conservatives. It is an activity I find creepy and slimy.

The decline of the economy means people losing their jobs, losing businesses that they’ve spent years trying to painstakingly build. This can be devastating on every level, personal and professional. The pain it brings is almost unspeakable. When someone cheers or hopes for a decline in the economy simply so that their political team can come out ahead, they reveal themselves to be without the basic human emotion of sympathy.

I don’t give a crap who is in office… I prefer to have a reduction in human misery if possible.

End of Stupid Moralizing

So… now that I’ve gotten all self-righteous and morally irritating, let’s talk about the numbers. (If you get bored by this discussion, feel free to skip to “The Point” at the bottom)

The unemployment rate is… well, it’s exactly what it says it is: a rate, a percentage based on two numbers. Your average non-economic American might think that the two numbers are as simple as “people employed vs. people unemployed”. Under this definition, you might think that a lower unemployment rate means that there are more jobs.

Sadly, you would be wrong.

The numbers actually start with the US population*. From that number, we take out children under 16, prisoners, those in mental institutions, those who require nursing care and the military and we get the “civilian non-institutional population”. From that number, we take out those who, for whatever reason have not tried to find work for 4 weeks. This is important because you don’t want to count housewives and high school seniors in the unemployment numbers. Remember that, because it’s going to be important in a second.

That brings us to the “civilian labor force”, which consists of the employed and the unemployed. It is from the civilian labor force that we calculate the unemployment rate. Therefore, there is a good way and a bad way to reduce the unemployment rate.

  1. Increase the employment number (good)
  2. Decrease the number of people in the labor force (bad)

The reason decreasing the number of people in the labor force is bad is that it means that people are extracting themselves from the labor force by:

  1. getting arrested in alarmingly huge numbers (unlikely)
  2. joining the army in alarmingly huge numbers (unlikely)
  3. getting younger in alarmingly huge numbers (that would be awesome)
  4. deciding that they’re just not going to look for a job anymore

And among the people in section 4, there are several options:

  1. deciding to stay home due to a lifestyle change (staying home with the kids)
  2. going to school to train for a new job
  3. retirement
  4. despair

So, let’s cut to the chase. We’re not seeing new jobs. The employment number in July continued to decline (though at a much slower rate than it did in June). What we saw instead was a decrease in the labor force. More and more people are just not looking for jobs anymore.

The Point

On the surface the unemployment rate going down seems good, but when you dig into the numbers, we can see that it has nothing to do with an increase in the number of jobs and everything to do with the fact that the labor force is shrinking.

Is this good or bad? I tend to think bad, but the economy also tends to be really complex, so I could be misreading something or I could be just plain old ignorant. I’m not an economist, so I won’t make a pronouncement on that issue. All I can do is show the numbers and wonder what the hell is going on.

IMPORTANT UPDATE:

@D_B_Inman on Twitter pointed out that I was looking at the unadjusted numbers in my analysis and that the unemployment rate is based on the adjusted numbers. When taking that into account, my charts and extra analysis are strikingly ignorant. This is actually comforting, because it means things aren’t as out-of-whack as I thought they were. I’ve adjusted my “Point” accordingly.

* The Bureau of Labor Statistics lays this all out in more detail, if you want to check it out for yourself.

** There is something a little weird in this because the historical data at BLS doesn’t match up with their current press releases. According to their historical data, we saw an increase in the labor force in the last couple months. But according to their historical data, the current unemployment rate is 9.7%, which is not the number being currently reported. I took the numbers from their current press release and I substituted them into the historical data, since I’m assuming that their current press release is more accurate. If you think I’m wrong, please let me know why.

graphs, unemployment

What The July Unemployement Rate Means (And Doesn’t Mean)

9 Comments

Today the unemployment rate for July 2009 was released by the Bureau of Labor Statistics. The rate dropped from 9.5% in June to 9.4% in July.

Before I explain why this might not be as awesome as it looks, let me just say “hooray!” for what seems like a slowing in the rise of the unemployment rate. I am ecstatic to see that the economy is not accelerating downward.

Stupid Moralizing (skip if you don’t care)

Some people seem to almost be cheering the decline of the economy for political purposes. Before last November, those people were mostly liberals. After January, those people were mostly conservatives. It is an activity I find creepy and slimy.

The decline of the economy means people losing their jobs, losing businesses that they’ve spent years trying to painstakingly build. This can be devastating on every level, personal and professional. The pain it brings is almost unspeakable. When someone cheers or hopes for a decline in the economy simply so that their political team can come out ahead, they reveal themselves to be without the basic human emotion of sympathy.

I don’t give a crap who is in office… I prefer to have a reduction in human misery if possible.

End of Stupid Moralizing

So… now that I’ve gotten all self-righteous and morally irritating, let’s talk about the numbers. (If you get bored by this discussion, feel free to skip to “The Point” at the bottom)

The unemployment rate is… well, it’s exactly what it says it is: a rate, a percentage based on two numbers. Your average non-economic American might think that the two numbers are as simple as “people employed vs. people unemployed”. Under this definition, you might think that a lower unemployment rate means that there are more jobs.

Sadly, you would be wrong.

The numbers actually start with the US population*. From that number, we take out children under 16, prisoners, those in mental institutions, those who require nursing care and the military and we get the “civilian non-institutional population”. From that number, we take out those who, for whatever reason have not tried to find work for 4 weeks. This is important because you don’t want to count housewives and high school seniors in the unemployment numbers. Remember that, because it’s going to be important in a second.

That brings us to the “civilian labor force”, which consists of the employed and the unemployed. It is from the civilian labor force that we calculate the unemployment rate. Therefore, there is a good way and a bad way to reduce the unemployment rate.

  1. Increase the employment number (good)
  2. Decrease the number of people in the labor force (bad)

The reason decreasing the number of people in the labor force is bad is that it means that people are extracting themselves from the labor force by:

  1. getting arrested in alarmingly huge numbers (unlikely)
  2. joining the army in alarmingly huge numbers (unlikely)
  3. getting younger in alarmingly huge numbers (that would be awesome)
  4. deciding that they’re just not going to look for a job anymore

And among the people in section 4, there are several options:

  1. deciding to stay home due to a lifestyle change (staying home with the kids)
  2. going to school to train for a new job
  3. retirement
  4. despair

So, let’s cut to the chase. We’re not seeing new jobs. The employment number in July continued to decline (though at a much slower rate than it did in June). What we saw instead was a decrease in the labor force. More and more people are just not looking for jobs anymore.

The Point

On the surface the unemployment rate going down seems good, but when you dig into the numbers, we can see that it has nothing to do with an increase in the number of jobs and everything to do with the fact that the labor force is shrinking.

Is this good or bad? I tend to think bad, but the economy also tends to be really complex, so I could be misreading something or I could be just plain old ignorant. I’m not an economist, so I won’t make a pronouncement on that issue. All I can do is show the numbers and wonder what the hell is going on.

IMPORTANT UPDATE:

@D_B_Inman on Twitter pointed out that I was looking at the unadjusted numbers in my analysis and that the unemployment rate is based on the adjusted numbers. When taking that into account, my charts and extra analysis are strikingly ignorant. This is actually comforting, because it means things aren’t as out-of-whack as I thought they were. I’ve adjusted my “Point” accordingly.

* The Bureau of Labor Statistics lays this all out in more detail, if you want to check it out for yourself.

** There is something a little weird in this because the historical data at BLS doesn’t match up with their current press releases. According to their historical data, we saw an increase in the labor force in the last couple months. But according to their historical data, the current unemployment rate is 9.7%, which is not the number being currently reported. I took the numbers from their current press release and I substituted them into the historical data, since I’m assuming that their current press release is more accurate. If you think I’m wrong, please let me know why.

speaking

I'll Be Speaking at Drive the Discussion

6 Comments

I’ll be speaking at the Florida GOP’s “Drive the Discussion” event in Orlando, Florida in a couple weeks. The event is August 22 at the Gaylord Palms Resort and among the speakers will be (according to the website) “Olympic Gold Medalist, motivational speaker, and television personality Bruce Jenner, Former Miss California and Miss USA first runner up Carrie Prejean, author and political commentator Jonathan Krohn and Washington Times columnist and political blogger Amanda Carpenter.”

The event is free, but you do need to sign up at the link above. I’m not listed as a speaker… probably because I don’t have a Wikipedia page. Or, more likely, because I’m neither super hot nor some kind of child genius.

I’ve got a basic presentation put together, but I’d love to hear what my readers are interested in and use that to… well… drive the discussion. So… how about it? More interested in talking about videos? Talking about understanding numbers? Talking about “new media”? Talking about Carrie Prejean? Let me know and I’ll use your input as I put together my talk.

Also, if you’re a reader or Twitter follower, let me know and we’ll “tweet-up” (which is the somewhat bizarre terminology for meeting twitter followers in real life).

speaking

I’ll Be Speaking at Drive the Discussion

6 Comments

I’ll be speaking at the Florida GOP’s “Drive the Discussion” event in Orlando, Florida in a couple weeks. The event is August 22 at the Gaylord Palms Resort and among the speakers will be (according to the website) “Olympic Gold Medalist, motivational speaker, and television personality Bruce Jenner, Former Miss California and Miss USA first runner up Carrie Prejean, author and political commentator Jonathan Krohn and Washington Times columnist and political blogger Amanda Carpenter.”

The event is free, but you do need to sign up at the link above. I’m not listed as a speaker… probably because I don’t have a Wikipedia page. Or, more likely, because I’m neither super hot nor some kind of child genius.

I’ve got a basic presentation put together, but I’d love to hear what my readers are interested in and use that to… well… drive the discussion. So… how about it? More interested in talking about videos? Talking about understanding numbers? Talking about “new media”? Talking about Carrie Prejean? Let me know and I’ll use your input as I put together my talk.

Also, if you’re a reader or Twitter follower, let me know and we’ll “tweet-up” (which is the somewhat bizarre terminology for meeting twitter followers in real life).

health care reform, video

What Was Wrong With My Last Video

11 Comments

After I posted my last video on wait times for getting a doctor’s appointment in Atlanta, Georgia vs. wait times in Boston, Massachusetts despite the fact that insurance premiums are drastically more expensive in Boston, I received a more mixed response than to any of my other videos.

Fortunately, I have commenters who are much smarter than I am. So I want to take the time to make note of what was wrong with that video.

Things that were wrong:

  • While I didn’t say this, I left the impression that the universal health coverage program in Mass was solely responsible for the expensive premiums. That is not the case. In the study I referenced, premiums were extremely high in Mass, but that was done before universal health coverage (UHC) was implemented. There has not (to my knowledge) been a similarly comprehensive study done since the implementation of UHC, so I cannot say that UHC inevitably leads to higher premiums.
  • Instead of comparing Boston to all the places that don’t have UHC, I picked one place that I liked (I used to live in Atlanta). Atlanta is particularly good on wait times, but it isn’t average. It would have been far better to compare Boston to the rest of the country as a whole.

Things that weren’t wrong, but that people complained about anyway:

  • “The cost of living is higher in Boston. That is what drives the insurance premiums higher”

    This statement was done by people who haven’t actually run the numbers. No one has yet explained to me how a 14% increase in cost of living between Atlanta and Boston explains a 300% increase in health insurance premiums. More importantly, no one has pointed out that doctors in Boston make significantly more than doctors in Atlanta (which would be a far more important data point for investigation).

    Also, it doesn’t explain the difference between Boston and Los Angeles. The Los Angeles cost of living is 22% higher than Boston, but they still have cheaper insurance. And they still have wait times that are half of Boston’s.

To me, the most important point of all of this is the fact that we may not have enough data to say that UHC has actually caused Boston to get a lot worse than it already was, but we do have enough data to say that it certainly hasn’t made things better.

Some people would point out such statistics as “Well, nearly everyone in Massachusetts has health insurance now! It’s been a success!” (In fact, that’s exactly what Mitt Romney does when he says we should, like, totally copy the Massachusetts model.)

But this isn’t a single variable issue, it’s a trade-off issue. If we gave everyone in the country health insurance, but it cost $1 trillion per year, everyone would be against it because the benefit outweighs the cost. Similarly, if we provided everyone with health insurance and kept the cost the same as before, but it took five times as long to get a treatment, most people would still be against it.

It is not self-evident to me that 100% health insurance coverage is a good thing because it depends so heavily on the trade-offs. You could have “100% health insurance coverage” as a matter of statistics, but if that means that it takes three years on a waiting list to get a hip replacement, I’ll stick with the 85% we have today.

And I’ve only mentioned three variables here (cost, insurance coverage and wait times). There is a balance between hundreds of variables that has to be maintained. If you ever listen to the President’s speeches on this issue, you come away with the impression that there will be no trade offs and that it will be cheap premiums, universal coverage and no wait times! And the government will make drugs cheaper.

Also, there will be rainbows and ponies.

Call me a cynic, but that kind of thinking about in the UHC plan strikes me as somewhat naive.

What I would like to see is a comprehensive study of the effects on the Massachusetts plan on the health care system. I don’t know that there are really that many positive effects other than “Look, everyone has health insurance!”

health care reform, President Obama, video, visualization summary

Obama Health Care Reform and Wait Times Visualization (In Lego!)

74 Comments

[youtube=http://www.youtube.com/watch?v=AqD-nMpsYAY&hl=en&fs=1&]

The next couple weeks are insane for me, but I’ve been sitting on this idea for some time and I figure its time to let it loose into the wild, spelling errors and all.

First, my sources.

Now for the caveats.

Wait times data are for routine checkups and does not count emergency care or diagnostic testing.

Phyllis Shlafly repeated the line that “The average wait is… the second trimester of pregnancy to see an obstetrician-gynecologist.” It looks like she is using the same documents that I’m using and if that is the case, that statements is absolutely false.

First of all, these wait times apply only to routine checkups (as stated above) and the OB/GYN checkups are “well woman” check-ups. Someone correct me if I’m wrong, but I don’t think that a pregnant woman falls into that category.

Second, the average wait time in that category is 70 days, which is really only the second trimester if you count the “Wait a second, I’m pregnant!” realiziation time, which might be OK if she mentioned that to he readers.

Now for the insurance cost data. This was a statistic I struggled with for quite some time. The reason is because the latest comprehensive data available was collected at the end of 2006 and beginning of 2007. This was so soon after the passage of the Massachusetts health care reform that it is very unlikely that it accurately reflects the results of that reform, as we know we all need healthcare to keep a good health, as for the mental health there are products like live resin that help with this and anxiety overall.

However, I’ve search high and low and cannot find any indication that the premiums have decreased at all. To the best of my knowledge, they have increased faster than the country average.

If this is true,  then the average individual health insurance premium in Massachusetts is somewhere around $830 per month.

But I figured I might as well underestimate in order to flush out people who might complain, so I used the non-specific and drastically reduced number of $600+ per month.

Finally, the most important question:

How close to the Massachusetts health reform is the Obama health reform plan?

Because, honestly, if they weren’t anything like each other, there would be no point in comparing them, would there?

The sad fact of the matter is that the Massachusetts model provides the closest real life approximation to the Obama plan that there is available.

They both have a government agency for providing health care exchanges. They both require business over a certain size to provide insurance for their employees or face penalties. They both require individuals to purchase insurance or face tax penalties.

Like it or not, I think we can look to Massachusetts as a miniature crystal ball to provide a glimpse into the future of health care in the US if the Obama health care plan is passed.

Uncategorized

I Hate the Healthcare Debate

18 Comments

I’ve been working on some videos concerning the healthcare reform issue over the last couple weeks and I’ve come to the conclusion that I hate this topic.

The reason I hate it is because it is so hard to find solid data on almost anything. Identifying the problem is nice and easy:

The US spends more per capita on healthcare than almost any other country, but we don’t necessarily get better results.

That statement is easy to prove with numbers.

Actually, I take that back, the first part is easy to prove with numbers. The second part of that is extremely difficult because judging the efficacy of health care is not an easy thing to do. Some metrics are easy to make judgements on. Wait times for CT Scans and MRIs are not dependent on whether or not the patient is skinny or fat, sick or healthy. How many people you can shove through a machine is far more dependent of scheduling efficiency, the availablility of personel and equipment, etc. In other words, there are few outside variables that are going to screw with your results.

But other metrics like life expectancy are heavily dependent on variables outside the health care system. Life expecancy for latinos, blacks, asians, whites, jews, arabs… near as I can tell they are different for all these groups even when other variables are controlled for. This makes it a very messy metric to use when trying to determine the efficacy of only one of those variables like health care.

As for controlling the cost of healthcare, there is one surefire way to do it: stop paying so much money. But this will result in less care and almost certainly lead some level of health care rationing as people can remain healthy by having a healthy lifestyle like a good diet and exercise and for the stress they can use vaping products by finding out the jeeter juice disposable price online.

The other ideas that have been thrown out there are not surefire ones, they are either educated guesses or “if I believe in it enough it will happen” wishes. Some of these ideas may work… but we’re not entirely sure which ones.

Which brings me to my preferred solution, which isn’t really a solution so much as it is a suggestion for identifying good policies a little more accurately: I think we should take the ideas that the Obama administration has and separate them out into a) ideas that can be applied to Medicare and Medicaid immediately and b) ideas that require a larger scale implementation.

Medicare and Medicaid are enormous programs with more than 70 million beneficiaries. It is absurd to say that they aren’t big enough to introduce some cost reduction programs without adding another 39 million people to government insurance programs (which is essentially what the Obama administration is saying).

Second, I think the government should set up some kind of public health care metrics program to gather the data that is currently so difficult to gather. Imagine if you could go online and look at hospitals around your city to see which ones deliver better outcomes and how much different procedures cost at different hospitals. This would go a long way toward inspiring competitive pricing in health care.

Third, I think we need to do away with the tax exemption for employer provided health insurance. Not a popular position, but it seems obvious to me that this policy has led to a large part of our health care overconsumption.

So… that’s all I’ve got for now.

I’m still working on some concepts that can be boiled down into something that is both accurate and striking. But the fact of the matter is that in healthcare we can trust very few of the numbers being tossed around right now. They are educated guesses at best and the Obama administration has a pretty bad track record at being able to predict the future.

graphs, math misused, President Obama

President Obama, I Fixed Your Graph For You

15 Comments

I’ve been pretty quiet recently because 1) I’m on vacation and 2) I’m trying to wrap my head around the health care issue before I talk about it at length.

But today I saw something on healthreform.gov that bothered me:
Combined PPO

Here’s the thing, Mr. President. There is such a thing as visual lying. That is when you show a graph and you show the numbers but the two things are not in any way related to one another.

That is the problem here. If someone looks at this graph, they see that the sky is falling because the bars have increased so dramatically. On the left, your team has represented a 30% increase with a graphic that shows a 966% increase. On the right, your team has represented a 63% increase with a graphic that shows a 308% increase.

And are the two sets bars related in any way? You might think so, given that they show up next to each other and are supposed to measure the same thing. But from a data perspective, they are not even remotely close to being right.

It is possible to use graphs and numbers in such a way that is honest. That’s an important part of transparency. So, I fixed your graph for you.

You’re welcome.

UPDATE: In the comments section, James quickly identified the problem… the graph starts the y-axis at 1000 instead of 0. I double checked and it looks like he is spot on. Thanks!

With that in mind, the graph is more of a rookie mistake than a conscious attempt to deceive. I’ve edited my post to reflect that (I left my original comments in so everyone can see what a smart-ass I tend to be).

graphs, President Obama, unemployment, video, visualization summary

The Obama Stimulus: Predictions vs. Reality

49 Comments

[youtube=http://www.youtube.com/watch?v=CJu0DgpiK8c&hl=en&fs=1&]

In this video, I take a look at the economic predictions that President Obama made in February regarding the stimulus plan and how those predictions are corresponding to reality.

The answer is: Not well.

But first, some references.

OK… now into the math. The chart that everyone is using does not have a corresponding table with hard number (at least no table that I could find), so I had to guess-timate what they were predicting the unemployment rates would be in May. I assumed that, because their graph divergence began immediately after the Q1, 2009 line, that that line represented the beginning of Q1 2009 (as opposed to the middle). So I estimated that the May would be just a shade before Q3, which is about the same place that Geoff put his May data.

Based on that, I estimated the points on the line like so:

Unemployment Rate Unemployed Population
Predicted Unemployment without the Stimulus 8.7% 13,492,000
Predicted Unemployment with the Stimulus 7.9% 12,251,000
Actual Unemployment with the Stimulus 9.4% 14,511,000

Now… here is the problem. In order to make our data symmetrical, we would have to have another row… a row called “Actual Unemployment without the Stimulus”. This, of course, is a row we cannot have because we sadly live in a space-time of collapsed quantum possibilities. We can never know what that row would hold.

This is where I start getting a little less analytical and a little more irritated. The president’s predictions have been shown to be completely off the mark… almost laughably so. And yet he acts as if he alone knows what would have happened if we hadn’t passed the stimulus because he keeps making statements like “we’ve saved 150,000 jobs“.

It is clear that, if he is referring to the chart we were presented with above, such a claim is absurd. What the president is doing is ignoring the fact that his predictions in the past were horribly inaccurate and simply moving ahead with new predictions. The big difference is that his new predictions can’t be judged against any set of objective reality. He is pitting the actual universe in which the stimulus bill passed against the imaginary universe in which it did not pass. Not surprisingly, the imaginary universe is worse that the real universe and the result is that the President is a hero for saving us from that imaginary universe.

I am not a very anti-Obama person. Predicting the future is tricky business and I think his team should get some leeway on this.

However…

Their predictions were not just kinda wrong. They were horrifically, disasterously wrong. If President Obama is going to use statistics and charts to push nearly $800 billion in spending, I think we should be able to expect his numbers to at least kinda match the reality that comes out of his policies.

At the very least, I’d like to know how his team got those numbers. More importantly, I’d like to know how they have changed their method of prediction. President Obama is fond of saying that we tried tax cuts and they didn’t work, so we should try something else. In that same vein, his team tried predicting the effect of the stimulus and that didn’t work. So I would like to know if they are using the same failed methods they used before or if they are doing something different.