My Magnificent Seven. Some bust myths. Others highlight a reality the media is ignoring. Enjoy!
1. The overly optimistic unemployment forecast of the Obama White House. This may be the most infamous economic prediction in U.S. political history (helpfully updated by The Right Sphere). For the original January 2009 chart from White House economic advisers Jared Bernstein and Christina Romer, see here.
2. The real unemployment rate. The official (U-3) unemployment rate is 8.6 percent. But the labor force has been shrinking as discouraged workers have been disappeared by government statisticians rather than counted as unemployed. But what if they weren’t? What if the Labor Department added those folks back into the numbers? Well, you would get this:
3. Middle-class incomes have been stagnant for decades—not. It is an oft-repeated liberal talking point, one that President Obama himself used in his populist Osawatomie Speech: The rich got richer the past 30 years while the middle class went nowhere. In short, the past few decades of lower taxes and lighter regulation have been a failure. Or, rather, pro-market policies have been a failure … except that new research from the University of Chicago’s Bruce Meyer and Notre Dame’s James Sullivan find that “median income and consumption both rose by more than 50 percent in real terms between 1980 and 2009.”
4. Inequality has exploded—not. According to the MSM and liberal economists, U.S. inequality has exploded to levels not seen since the 1920s or perhaps even the Gilded Age of the late 19th century. And to prove their point—that the 1 percent has gotten amazingly richer in recent decades—the inequality alarmists will inevitably trot out a famous income inequality study from economists Emmanuel Saez and Thomas Piketty. But why not instead look at wealth—all financial and nonfinancial assets—instead of income? It’s less volatile and a truer measure of all the economic resources at an individual’s command. Turns out that Saez has done research on that subject, too. And he even created a revealing chart documenting the ups and downs of U.S. wealth over the past century. It reveals a very different picture of inequality in America:
5. and 6. The underwhelming Obama recovery. When you compare the current recovery to those of the past, it looks pretty anemic. And it doesn’t matter if you look at GDP growth or unemployment (via The Economist).
7. America’s debt picture is worse than you think. If you factor in the long-term impact of rising federal debt on U.S. interest rates and economic growth—raising borrowing costs and lowering tax revenue—you’ll find that federal debt could be almost 50 percent higher by 2035 than the estimates usually bandied about in the media.
I encourage readers to also visit fiscaliq.net. I do not agree with all of their “wisdom” and interpretations but there are some very important facts that we all should understand.
*facepalm*
We are so screwed…
THANK YOU for posting! Should be required reading!! Merry Christmas!!!
Steve
Common Cents
http://www.commoncts.blogspot.com
A great collection of graphs.
Excellent post. In the Favorites.
You want to improve the graphs? Put Palin in the White House. She GET’s it!
Oh nuts! She ain’t running……hmmmm…..yet.
Why not Bachmann/Palin ticket?
Shake it up
The chart labeled Fig. 3 shows family incomes. Much of the increase is due to Mom going to work. If it just showed individual incomes, or, especially, Dads’ incomes, the slope would be down.
Moms going to work is not an unalloyed blessing. For one thing, the birth rate in middle class families is below the replacement rate.
Moms going to work is a good thing if you think national extinction is a good thing. Otherwise it’s not so good.
Nice try Jeff, but that is not true at all, the percentage of mothers working has stayed fairly consistent since the early 80′s. If the graph was from 1950 to the present you might have had an argument.
I will agree that one can debate the value/cost of working mothers, but the upward slope from the mid-80′s on is not due to mothers working.
http://adage.com/article/adagestat/ad-age-stat-percent-working-moms-slightly-declined/227455/
Just so credit is given where due, your #1 Chart was first modified from the White House version by Geoff at Innocent Bystanders, and was widely disseminated from there. He’s also updated it quite a few times.
http://michaelscomments.wordpress.com/2009/05/08/the-april-numbers-are-in-its-official/
Great graphs!
As you look at those graphs, keep in mind which party controlled a majority (2+ out of 3) of the House, Senate, and Presidency. From January 1995 to December 2006, Republicans last held the majority. Then, in January 2007, Democrats took the majority when they took control of the House and Senate.
The Jobs and Growth Tax Relief Reconciliation Act of 2003 (a.k.a. the second part of the “Bush Tax Cuts”) was signed into law by President George W. Bush on May 28, 2003. Unemployment peaked in June 2003 at 6.3% and then steadily declined to 4.4% in December 2006.
Democrats inherited a good economy from Republicans. After Democrats took control, debt and unemployment skyrocketed, and GDP plummeted. That’s a fact. Obama didn’t “inherit” a bad economy, he and the other Democrats in Congress played a huge role in Fannie/Freddie fiasco, the $1.3 Trillion annual deficts, etc.
The Republicans tried to increase regulation of Fannie/Freddie, and it’s the Democrats who resisted those attempts and implied that the Republicans were racists:
Amen Brother!!
Sigh. After all these years, it’s amazing to still see knowledgeable commenters who still fall for the Republicrat’s good-cop-bad-cop game. There is only one party, the party of Washington DC. The Republicans and Democrats are not true opponents, any more than the Green Bay Packers and Kansas City Chiefs were “opponents”. Both sides want to win the game, and the last thing that either side wants is to change it.
Sean, I recommend reading Repo Men, it illustrates the connection between government and Wall Street both D’s and R’s, it a long piece but worth the read.
http://www.nationalreview.com/articles/286704/repo-men-kevin-d-williamson
It is interesting to note that in/on the charts where there is a a span of decades (1, 2, 5, 6 and arguably 7), some might hasten to remark that some of the trends predate the Obama presidency. Of course, they dis-remember that Pelosi, Reid assumed the controls of our now dysfunctional Congress in January 2007.
Coincidence? I think not!
Very well done. The MSM and the left are so fixated on people who do better than the country as a whole, they have lost sight of how well we have done in the US compared to other countries of 300 million people made up of immigrants from around the world…. A country that has half the population not paying any federal income tax.
Look at Shadowstats.com. The picture described there is considerably worse.
1) We now know that the 4th quarter drop in 2008 was much worse than originally thought. If you read economic literature, you would know that James.
2) Why not look at labor participation rates?
3)Noted above.
4) Good thing you stop that graph so early.
5&6) An international financial crisis is the same as other recessions? Really?
7) Absolutely! We had done so well on working down our WWII debt, as a percentage of GDP, up until 1980. Then something happened.
Steve
Steve, you are so right on #7, the Democrats reneged on the cutting spending as they promised.
As revenue grew because of lowered tax rates spurring on the great boom, the Democratic controlled Congress just spent like mad. They could have been fiscally responsible, but that’s no fun and they had cover from Reagan’s necessary and needed build up in defense.
Your arguments for reasons 1 through 6 are equally benighted.
Well, the msm version of these charts will be reversed 2 minutes after a Republican president is elected..
Regarding wealth inequality: When you look at Democratic charts and listen to their talking points, pay special attention to their starting point. The claim is often made that wealth inequality has increased since “the late 1970′s”. And this is true – but only because the late 1970′s were an outlier – the combination of low growth and high inflation wiped out a lot of real wealth at the top, creating a sharp but temporary drop in in the wealth of the top 1%. Your chart shows this. But if you pick almost any time other than those three or four years in the 1970′s as your starting point, wealth inequality has actually been on a decreasing trend.
Funny how they left out ALL of the information beginning in 2000. You remember, the Bush years? His tax cuts did not work out as well as Reagan’s… value creation and trade deficit has EVERYTHING to do with it.
Typical- playing politics instead of fixing the economy. I’m annoyed an irritated now. Do the advertisers care?
His tax cuts led to EIGHT MILLION more jobs from 2003 to January 2007
Then the Dims took over Congress … and employment growth ABRUPTLY flattened.
Wonder why? Could it be that businesses saw themselves being turned into cash cows and social-justice vehicles by that Congress, and scaled back their activity in anticipation of that?
Progressives OWN this malaise.
http://www.agoyandhisblog.com/2010/03/26/every-picture-tells-a-story-dont-it/
Here’s some graphs that cover those earlier years … with links to source data.
Enjoy.
There is no way we will ever undo all of the damage this idiot savant prompter reader has done to America. We can never pay the debt and will be beholding to China and others for a hundred or more years unless we pay them off in exploding nukes. This is the “change”, we are now sliding into 3rd world status.
Worse than the complete collapse of America for all those Progressive Democrats will never being able to build their Utopia because China will not lend them any more money. They’ll just have to be satisfied by killing a few million of us like Mao, Pol Pot or ‘Morning Joe’ Stalin. Whilst they continue the total destruction of the agricultural/industrial base that built this country, they will demonize Christians and Jews to distract from their actions. Hmmm. Aren’t they already doing that?
Why does the distribution of income show increasing inequality and the distribution of wealth show no increase in inequality? The problem with using income to measure inequality is that changes every year. Individuals who have very high income in some years have low income in others. Ask those working in the financial services industry! Wealth, which reflects income over time, is a much more reliable indicator of permanent differences in the ability to consume which is the measure of economic inequality that should really matter.
Note that the same problem afflicts our poverty measure. It is based on current income (and not adjusted for the local cost of living). This overstates poverty rates in low living cost areas compared to high living cost areas. It really overstates poverty among the wealthy (particularly the elderlty) whose low income in retirement does not mean they cannot consume.
Looking at the Obama graph at 1, I suddenly realized something. The Obama Administration was saying that whether we had stimulus or not, unemployment would shoot up and come back down, reaching the same end point in 2014. This beggars the question: If both had the same trajectory, what impact would the stimulus have? Yes, in the years 2010-2013 the unemployment rate would be lower (which turned out to not be correct), but if the end point is the same with or without stimulus, would it have not been better to not do stimulus and save the money? Oh well, what’s done is done and can’t change that now.
Doug Elmendorf, the head of the CBO, gave his estimate of what the stimulus would have over a 10 year period — and it would be net negative. Senator Sessions was pretty proud of the way he parsed the CBO report to get that information. Real Clear Markets website has a link to the exchange here. http://www.realclearmarkets.com/2011/11/18/cbo_on_stimulus_a_net_negative_120628.html
The fixation by socialists on “income inequality” entirely misses essential facts about humanity and our present technical age. We have tremendously powerful tools and mass markets so that anyone with a sufficiently good idea can create a tremendous amount of value. So, for example, a person with a good idea for a story line can not only sell millions of books, but tens of millions of people will go to see the several movies based on the books. This is exactly how J.K. Rowling created a billion dollar industry in her Harry Potter series.
Similarly, a person with an idea for a social networking site could create something worth tens if not hundreds of millions of dollars. Then there are the sports figures whose play on the field earns the attention of millions of fans. Their multiyear contracts are worth mulit-millions. Their product endorsements also bring in big bucks.
Is it somehow a bad thing that these people earn so much more than the rest of us? Socialists seem to think so. But maybe not. For when you ask a socialist if how much money Tiger Woods or Brad Pitt earns is bad, they say, well, er , we weren’t really talking about those people. Who then are we talking about? Greedy business executives, comes the answer. Well like who? People who have high salaries and get big bonuses, comes the answer.
Yes, exactly, like the people who run the businesses that create the goods and services we all need and want to make our lives better. And what kind of goods and services would you get if you hired an average person to run these giant industries? Service exactly like you get at the school cafeteria, the DMV and the Post Office. Welcome to the socialist’s America.
Very nice graphs but they don’t reflect the actual unemployment rate which is around 20% at this time. There are many people that simply have not been counted, like the self-employed. I was self-employed and nobody counted me when they concocted these figures and I don’t think very many were counted. I’m now retired early.
Yes, well put
interesting article topics newspaper
I recommend the blog “Political Calculations”.
We are in great shape: Everything works great except the Government, and that can be trimmed down to its contitutional size.
Abolish the Departments of Education, Agriculture, Housing and Urban Development, Energy, Health and Human Services, Labor, and EPA.
Abolish BATFE.
Replace government quality control with ‘third party market quality control’ as is used by the Council of Rabbis for kosher foods, or by Underwriter’s Laboratories for appliances.
The best medical advances recently were in plastic surgery, which was not controlled by the government. Similar advances would be available in other fields if the government got out of the way.
Your first graph should be removed as misleading people to the wrong conclusions on the stimulus.
http://www.politifact.com/virginia/statements/2012/mar/02/eric-cantor/cantor-says-obama-promised-stimulus-would-keep-une/
Next to remove would be the fourth graph:
http://www2.ucsc.edu/whorulesamerica/power/wealth.html
http://thinkprogress.org/economy/2011/10/03/334156/top-five-wealthiest-one-percent/?mobile=nc
http://www.motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph
http://www.politifact.com/truth-o-meter/statements/2009/oct/01/michael-moore/moore-says-top-1-percent-owns-more-financial-wealt/
On median incomes:
http://economistsview.typepad.com/economistsview/2011/09/mean-vs-median-income-growth.html
Unlike your graph, the graph features incomes adjusted for inflation.
Correction: your graph does account for inflation, but even with those figures..
http://stateofworkingamerica.org/charts/productivity-and-real-median-family-income-growth-1947-2009/
http://stateofworkingamerica.org/charts/real-median-family-income-1947-2009/
http://www.decisionsonevidence.com/2011/09/labor-day-gaps/
This would add to the link on income growth provided above.