Monday, April 30, 2012

Mitt Math: He's at it again.

Glenn Kessler at the Washington Post Fact Checker does a nice job exposing Romney's latest deceit using "Mitt Math. As I noted in my last post, Romney and his campaign are engaged in a thoroughly dishonest effort to deceive people about Obama's record. In his latest, Romney lies about business start-ups under Obama. Here the deceit is less subtle, because they take the year of comparison for the "Obama" record from March 08-March 09. In other words, they include 9 months of Bush recession as Obama's fault! What is really interesting to me is that Romney and his campaign either think their lies are not going to be caught, or that they don't matter. They seem totally unconcerned about their reputation as liars. Here they are trusting the press not to tell the truth. By and large they can rely on the TV news not to call "liar". But there are print journalists who are actually doing their job of saying what the truth is. If serial lying ends up hurting Romney—and I hope TV ads will drill it in—it will be thoroughly deserved.

Tuesday, April 24, 2012

Mitt Math, and the Truth on Women’s Employment

Romney and his campaign claimed: “The Obama administration has brought hard times to American women. Under President Obama, more women have struggled to find work than at any other time in recorded history. Women account for 92.3% of the jobs lost under Obama.”

How have women actually fared in the Obama years? In reality, both men and women have done significantly better under Obama than under Bush’s last two years, the recession years. However, the men’s recovery has been stronger than the women’s recovery.

What Romney did, by deceitful manipulation of statistics and dishonest interpretation of the results, is to characterize a slower recovery for women as an historical hit on women, a time when “more women have struggled to find work than at any other time in recorded history.” This is flat out wrong, as the employment losses and unemployment increases were worse under the Bush recession. And after the effects of the Obama stimulus kicked in full force, from January 2010, there has been net job growth for both men and women.

How did Romney get his 92%, and what is the real story on women in the labor market? First, to understand Romney’s deception, a little story will help.

Once I asked for a quarter from Romney to feed a parking meter, and showed him I only had a penny in change. He gave me gave me two more pennies, and walked away laughing. Then he went around the country saying that he had tripled my money using his financial genius, and that I was a typical liberal with colossal ingratitude.

Ok, that didn’t happen, but the story illustrates a point: when you compare small numbers using ratios or percentages, the results can be totally misleading. Romney started with honest data, but then did dishonest math. The net change in employment in Obama’s months (1/09 - 3/12), compared to the total number of people who were employed last month, is a -.56% net loss. The losses of women alone were -.51%. The ratio of these small percentages, or of the two before & after numbers, is about 92%.

That method of calculation turns a ½% reduction in women’s employment into an apparent massive hit on women. But the reality is that there was only a small loss, especially compared to loss in women’s employment under the last two years of Bush, which was 4%. And, as I said, if you start after the stimulus kicked in strongly in January 2010, you get a net increase in jobs under Obama.

Now if I were using Mitt Math, I would say that Obama has been eight times better for women than Bush. However, I wanted to get an honest picture of the economic impact of the Obama administration on the women’s labor market.

So I talked to the friendly public servants at the Bureau of Labor Statistics. The first thing I learned is that the Employment numbers, which Romney used—or rather misused—do not by themselves give a full picture of what is going on in the labor market. People enter the labor market from school and they leave for retirement. Women often leave to stay at home to raise their small children, and return when their children are bigger. These and other reasons besides unemployment bring people out of the labor market and back in, and this non-unemployment group is as large as those who come into and leave work because of being laid off or fired.

A second problem with the employment numbers is that they are ‘snapshot’ numbers. So if you look at the difference between employment numbers at earlier and later dates—as Romney did—the result doesn’t tell you what happened in between. Further, you can’t just add monthly figures because many people stay employed and unemployed from month to month. Simply adding months would involve double counting.

Fortunately, there are available numbers on the flows in an out of the labor market, from the Current Population Survey. And the BLS does keep track of detailed flows: employed to unemployed, employed to not in labor market, employed to employed; unemployed to employed, not in labor market to employed, and so on. With these detailed numbers, it is legitimate to show average flows of women’s and men’s employment and unemployment over months. That gives you an honest picture of the impact over an extended period. For an example of sound methodology in looking at the flows, the BLS folks directed me to their report on why unemployment rose in the first part of the recession.

Following their methodology, I compared what happened in the last two recession years of Bush, and under Obama. I also compared experience under Obama after the stimulus took hold, in January of 2010. The following tables are based on men’s and women’s seasonally-adjusted numbers from the Current Population Survey, research series, from the BLS. (The flow numbers are published here for the first time.) Note that the total unemployment numbers, widely reported each month, include also those who remain unemployed from month to month, and this is the largest group. That is why total unemployment numbers are much higher than the those entering and leaving unemployment.

[click graphic to enlarge.] So what does an honest reading of the indicators show? First of all the Bush recession years were far worse for women than the Obama years. However, the Obama recovery has been stronger for men than women. During the first Obama year, women were still losing jobs, while men were already net regaining them. From Jan ’10, when according to the CBO the stimulus had its strongest impact, the Obama years are net positive for both men and women. However the recovery is still significantly weaker for women.

As the spokesman for the Bureau of Labor Statistics noted in a Politifact article on the 92% number , this pattern of men being hit first and recovering earlier has been typical. Here Obama tried to funnel federal money to the localities to address the increased unemployment of workers in local government—which accounts for a lot of the women’s job losses—but this effort was blocked by Republicans in Congress.

Even with recovery, the flow numbers reveal that the Obama years have had more “churning” in the labor market compared to the Bush years, with more people entering and leaving unemployment every month. The net post 2010 is positive for both women and men, but with more people changing jobs. This may be an indicator of the kind of “creative destruction” rightly lauded by fans of the free market as part of the transition to a more productive economy. However, it is understandable that it leaves people feeling insecure, especially with the frustratingly slow decline in total unemployment.

Does Romney’s complicated deception with numbers have any significance? Does "Mitt Math" matter? I think it does, because it goes to the heart of Romney’s case for him being a better president than Obama. Romney says he understands business and finance, and so can act more effectively to help the economy. But knowledge of finance can be used in irresponsible and self-serving ways, as well as a good and productive ways. We all are acutely aware that it was manipulation of financial numbers by financiers that led us into the housing bubble and burst, and worst recession since the great depression. When financier Romney starts being dishonest and self-serving about statistics, it raises the specter of a Romney presidency doing to us again what dishonest and self-serving financiers did to us in the last decade.

Friday, April 20, 2012

Poverty as Liberty

A major part of the continuing Republican con is the notion that massive differences in economic outcomes among American families are perfectly acceptable – given the undisputable “fact” that Americans enjoy unprecedented economic opportunities to better themselves. In this exceptionalist vision of American economic success, heavily popularized in the early 19th century by French historian Alexis de Toqueville and by American writer Horatio Alger, America’s position in the world as an unusually mobile, classless society was unchallenged. In this view, any American who demonstrated sufficient pluck, or true grit could rise from poverty.

Sadly, this powerful ideological template is completely false as empirical data can readily attest (more on this in a moment). I say “sadly” because it continues to hold many citizens in thrall more than 150 years later…and continues to be a prominent rallying cry for Tea Party Republicans today. But, it is the corollary of this misguided exceptionalist theory that is so troubling. Stated bluntly, if it is indeed the case that the social order of the United States provides uniquely “high” probabilities of rising from poverty to a position of great wealth, then does one explain the substantial amount of poverty that exists today?

Among Republicans, reluctant as they are to properly acknowledge any of the destructive side effects of exclusively free market economies, the only explanation for all this poverty is that many of these folks are really “the underserving poor.” That is..they are morally flawed and lack the true grit, and willingness to exert effort that was implied by Horatio Alger over a century and a half ago. This view is implicit in Mitt Romney’s statement’s regarding stay-at-home mothers. His suggestion is that there is great dignity in work done by women as stay at home moms but only if they have the financial resources to do so. A poor woman who wishes to do so of course is morally flawed. There is no dignity of work in child rearing by one who is poor. That is why as Governor in my home state he wanted to force all mothers receiving any government assistance to get out of the house and into the workforce – or lose their benefits.

These harsh, uncompassionate views of the poor are a clear corollary of the exceptionalist vision. But there is a major empirical problem here. First, as Tim Noah points out (New Republic, March 1, 2012), this vision was advanced when 41 percent of farmer’s sons advanced to white collar jobs between 1880 and 1990, compared with only 32 percent between 1950 and 1973. Intergenerational mobility has been dropping. But surely, the United States exceeds all other nations in our economic mobility?? The PEW Economic Mobility Project demonstrates ( ) that in 2006, the U.S. had far less relative intergenerational mobility than countries like France, Canada, Germany, Sweden, Finland, Norway, Denmark. The vaunted American mobility story, once partially true, is no longer. The real “moral hazard” is believing this myth.

Thursday, April 12, 2012

Why calling "liar" is critical to Democratic success

This graph based on numbers from the Federal Reserve, from Kevin Drum of Mother Jones (via Maddow Blog) is the clearest explanation of the deceit that Romney was doing with his claims that 92% of job losses since Obama came into office were to women. The reality is that there have been more losses to men, but the men's employment has also recovered more. The recovery is indicated by the falling line of men's unemployment. If the number were given of total jobs lost, not counting regains, men's is far higher. That honest number would be indicated by the area under the curves, not the difference between a starting and ending point—and the area under the men's unemployment curve is obviously greater.[Correction, the area is not the correct measure, partly because Drum's graph doesn't have unemployment per month numbers, but total employment numbers. More to come....

As Krugman argues, maybe the most important development is that the mainstream press are starting to call Romney for his deceit.

I think that the critical thing is for the Democrats to start calling Romney a liar. This is not polite, but when someone is trying to destroy you through lies, it is ethical to fight back and call them a liar. Furthermore, it is the only effective response. If you try simply to combat each "untruth," you get buried in an avalanche of lies. You have to combat the *narrative* of lies, and expose it for what it is.

Most importantly, if the Democrats make calling "liar" an issue, the press will be forced to deal with it and stop evading their responsibility to label the truth as truth and lies as lies.

It is also remarkable how bad a liar Romney is. He always goes overboard in his lies, and makes them not credible, so that he is very vulnerable on charges such as that Obama made the recession worse—a bare faced lie.

Wednesday, April 4, 2012

The central Republicon lie about "Big Government"

Obama has at long last given an in-depth rebuttal of the Republican economic plans, and defense of his own, in his speech before American Society of Newspaper Editors (ASNE). The transcript is here.

A key fact that Obama notes is that is that discretionary federal government spending is the smallest percentage it has been since Eisenhower. As Krugman has put it, our government now is basically "an insurance company with an army." The insurance aspects, such as social security, medicaid and medicare are huge, but they are transfer payments. When the government gives you a social security check, they don't tell you how to spend it. In spending health care dollars you also have a choice of provider. That's why the specter of 'big government controlling your life' is such a lie: the 'big' part of the government is transfer payments, including for health care. They are not programs run by the government.

The "Republi-con," as I call it, misrepresents transfer payments as government control of your life, and then advocates ripping holes in the safety net so the rich can get more money.

The key issue as far as the deficit long term is, as Ezra Klein has said: health care, health care, health care. And the only way to get costs under control is more government intervention in the health care market to keep costs down and increase efficiencies. That's because, as Nobel-prize winning economist Kenneth Arrow argued long ago, health care has all the qualities that makes it *not* work for all as a free market, such a lack of information and time to make decisions, and lack of alternative goods. The alternative to health care is sickness or dying. Only government subsidies will enable the poor to get health care, and only government power of bargaining and of regulation can bring down costs.

It is clear that Obama "gets it" as far as the need for government investment in public goods for future growth of our economy. That is very good news, if he makes it a centerpiece of his campaign.