Sunday, February 2, 2014

Fun With Numbers...and Perhaps Too Much Spinning?

'Let's see: The unemployment rate is
great...because I say so!'
We have long been fascinated by the ability of political partisans to 'spin' facts and figures to their particular benefit.

Some are very good at it and get paid huge sums of money to do so for their particular client or party. Some are just great at 'shading the truth'; 'gilding the lily' or 'looking at the facts with rose-colored glasses'.

It is almost part of the political DNA of political candidates in this country to do so in order to get elected.

'Perception is reality' Lee Atwater used to say all the time.

If you can convince the majority of people that your view of the truth is the real truth, then you will get elected...regardless of whether it is technically 'true' or not.

The only problem is that 'looking through rose-colored glasses' when it comes to the facts of the matter doesn't do a whole heckuva lot to help the average American learn or understand what is going on in America today. 'Gilding the lily' doesn't help the average American understand what it will take to get us back to where we all want to be: living in a vibrant, growing economy that generates millions of new jobs so everyone can get back to work and provide for their families.

Case in point:  2 completely different interpretations of the recent unemployment numbers.

The national unemployment rate has been steadily dropping over the past 4 years as the economy tries to slowly recover from the massive recession and real estate/economic crash we suffered in 2008-2009.

From a high of 10% in 2009, it is now about 6.7% which looks like significant improvement on the face of it.

But is it, really?

Generating unemployment figures is not an exact science.  There is no central computer system collecting data on every single person in this country who is either employed, looking for a job or who wants a job but has given up his/her search because of the difficulty of finding a job in a still depressed economy.

Such data is collected from numerous surveys that are conducted monthly by the Bureau of Labor Statistics (BLS) which is considered as a 'representative sample' of the labor situation across the nation in specific and as a whole. It is presented every month and testimony is taken at the Joint Economic Committee in the US Congress for anyone brave enough to sit through them month-after-month-after month. (We have done so...and they are not always 'scintillating' or even 'interesting' discussions)

The debate ever since President Obama took office in 2009 in the midst of the depths of the Great Recession has been over this:
'Have his policies 'worked' to alleviate massive unemployment...or have people just withdrawn from the workforce by the millions frustrated by the lack of jobs due to a stagnant economy?'
The Raleigh News and Observer today had the following opinion piece, 'McCrory makes rosy, but questionable claims on jobs front' claiming that Governor Pat McCrory, the North Carolina Governor for just over 1 year now, is making a specious claim that his policies and the policies of the GOP state legislature have significantly reduced the state's unemployment rate.

State Senator Josh Stein, the presumptive Democrat candidate for NC Attorney General in 2016, sent out the following statement (*see below) following his appearance on the CBS Evening News claiming that Governor McCrory's claim ignores the fact that '95% of the unemployment rate reduction is due to lower labor participation rates'.

Well, which is it then? Is the unemployment rate 'going down' a good thing because more people are finding productive work or is it just a mirage obfuscating the fact that many frustrated people are just not looking for work any longer?

Why is it that when President Obama announces the 'tremendous progress' his Administration has made in lowering the unemployment rate to 6.7%, there is barely a peep from the news media or the Democrats about the tremendous increase in the numbers of people who are dropping out of the labor force like flies, completely frustrated by the lack of job opportunities they can find?

But when a Republican Governor makes the same claim to support his/her politics, he/she is excoriated as in the N&O opinion piece?

Look, we don't like partisans on either side 'gilding the lily' or outright 'lying' about the facts when it comes to politics. We 'get' that is how it has been played ever since the beginning of our Republic. (If you don't believe it, read any of the biographies we have noted in the margins of this blog and see how Hamilton and Jefferson, primarily, perfected the art of 'selective argumentation' if you will)

But at least be consistent, for goodness sakes! On both sides of the aisle.

If you need one more data point why so many people are leaving both established political parties and registering 'Unaffiliated' or 'Independent', add this one to the list.

If Governor Pat McCrory in North Carolina can't claim the reduction in unemployment due to the rapid rise in the numbers of people leaving the workforce, then neither can President Barack Obama at the national level.

We think that the impact of federal policy on the economy far outweighs the impact of any state's economic policy, although high-tax states such as New York and California are providing ample evidence that people will move to lower tax and lower-regulated states once the burdens on business get too onerous.

We happen to believe that the American people will positively burst into spontaneous job creation mode the moment they collectively believe that they can invest with confidence that they can do so without fear of more taxation and regulation taking away their hard-earned profits and benefits, assuming their new investment is successful that is.

Just ask any businessperson today how many people they would hire if they did not have to worry about complying with Obamacare...the numbers are staggering.

The labor participation rates might then skyrocket when people start to see opportunities to be re-employed once again. The 'official' unemployment rate might initially pop back up..but wouldn't that be better than the current situation?

* Newsletter from NC State Senator Josh Stein

January 28, 2014

Dear Neighbors,
Last night, CBS Evening News aired a story on unemployment in our state, calling North Carolina “ground zero.” Along with Governor McCrory, I was interviewed in the report, the clip of which is attached below.

The segment failed to explain why our state’s unemployment rate has fallen faster than other states. Unfortunately, more people are giving up and dropping out of the labor force in North Carolina than in other states and more than at any other time in state history. Even as our population grew by 100,000 people last year, our workforce shrank by 115,000 as long-term unemployed stopped looking for work. There were 9,000 fewer people employed in our state at the end of 2013 than at the beginning. One Harvard economist concludes that the decline in labor force participation explains 95% of drop in our unemployment rate. These statistics should not be celebrated.

A second point that bears underscoring is the cost to North Carolina and our people by Governor McCrory and the General Assembly making North Carolina the only state in the nation last year to reject our own tax dollars in extended benefits for people who were actively looking for work after being laid off through no fault of their own. Our state leaders would rather take our own money out of our economy (to the tune of $1.5 billion last year) and spend it in other states around the nation, instead of here at home, where it could have helped 170,000 North Carolina families pay their rent or their mortgage, buy food, get gas or groceries and helped small businesses and the state economy at the same time.

I regret that this short-sighted decision was made by our state government. Fortunately, Senator Kay Hagan is trying to fix this issue in federal legislation that is being debated in Congress. I encourage you to contact your federal representatives if you agree that North Carolina workers should be included if extended benefits are renewed.



P.S. Here is a link if you want to listen to a recent interview on WRAL’s NC Policy Watch in which I discuss the recovery, teacher pay, and the ongoing problems at DHHS.

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