Interesting dialogue beginning after our publication of a chart by Kevin Drum discovered at Mother Jones. It shows job level decline as President Obama took office and subsequent reversal and growth as new jobs policies took hold.
Ryan, who writes for Secular Ethics, also graciously contributes to this site from time to time. He points to a cautionary trend, the decline of participation in the labor force. This is often raised by conservatives as evidence that things are so bad under the Obama Presidency that people have given up on finding work. Ryan's comment:
It is good that this trend has reversed, but labor force participation is another story. It has been falling since Obama took office. At that time, it was 65.8% (February of 2009); now it is 63.6% (April of 2012), which is the lowest since 1981.
Tim McGaha, who writes with a scientific bent at Tim's Thoughtful Spot, responds that labor participation is not a direct indicator of labor despair. In fact, it does not differentiate between diverse motivations:
Some of that may be due to a weaker employment picture, but some will also be due to the Baby Boom generation entering retirement. Without some way to untangle the confounding factors, I'm not sure that the participation rate is all that useful as a figure of merit.
As it happens, Tim might find some backing in research conducted by the Urban Institute and published by the Department of Labor, albeit with disclaimers. The decrease in labor participation is heavily impacted by an increase in older workers, more likely to retire, and by young adults who seek more education than ever before.
In fact, an increase in retirement was forecast by the Director of the Congressional Budget office as Obamacare was scheduled to take effect. The forecast of retirements was based on a sad fact, that many older workers continue working because they can't afford to lose their group insurance; and a happy future development, that they will be able to retire when health care becomes available. Conservatives put their own twist on that testimony, broadcasting that Obamacare would cost 800,000 jobs. That 800,000 figure was actually based on the CBO estimate of newly freed workers who could finally retire.
Ryan comments, reasonably enough, on the uncertainties of cause and effect.
Since I do not fault Obama for the decline in labor force participation, I cannot fairly credit him with restoring the total payroll employment to the level at the beginning of his term. For all I know, that number is improving despite his policies, not because of them.
He points, fairly, to the clear liberal bias of this site:
Now, Raymond did not claim that Obama's policies have had any effect at all on total payroll employment. He merely posted a graph. But this is a generally liberal blog, so it's reasonable to conclude that the intent was there.
Ryan's got us on intent. We try to present facts fairly, but he is correct about our preferences.
In fact, I am comfortable making us a little more vulnerable to that criticism. As long as I can remember, Republicans have supported policies with a definite tilt. The rationale, when I was a youth, was that we all would benefit by favoring the wealthy because people with lots of money create jobs. It was called trickle down economics by detractors, pro-growth by advocates. After all, who could be against growth?
In the late 1970s a bell shaped curve was introduced by Professor Arthur Laffer, who famously drew it on a napkin at a dinner of Republican notables. Supply side economics was born, and has metastasized from tax revenue theory into economic growth theology. The primary belief now is that we all would benefit by favoring the wealthy because they create jobs.
Democrats have stayed with dreary old Keynesianism. In and out of fashion, they have stuck like glue to the pages of Economics 101. In downturn, increase government spending, in good times, cut spending and balance budgets.
Facts can be stubborn. In this case, as Ryan wisely points out, the facts don't prove either case to a moral certainty. They do tend to support only one side. The fact is that in the half century plus one year since John Kennedy took office, Democrats have produced more than twice as many jobs each year they were in office than have Republicans when they have held office. It looks worse for Republicans if you include the Great Depression and the Roosevelt recovery. So let's just look at half a century instead of a hundred years.
Democrats hold the edge though they occupied the Oval Office for 23 years since Kennedy’s inauguration, compared with 28 for the Republicans. Through April, Democratic presidents accounted for an average of 150,000 additional private-sector paychecks per month over that period, more than double the 71,000 average for Republicans.
But you never know. Could be coincidence. And you can't judge these things too quickly. Trickle down economics or Supply Side theology might still work. Just give Republicans a few hundred more years to prove their case.
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Both supply and demand are important. If we are going to emphasize one of the two in our economic policy, we should be sure that we are not harming the other to the point of imbalance. This should not be controversial to anyone.
But there are difficult questions:
Do we raise taxes and collect more revenue at first, but possibly lose more in the long run--or do we lower taxes and collect less at first, but possibly gain more in the long run?
On whom should we raise taxes?
To what extent should we raise or lower taxes, especially during or following a recession and with both a large deficit and a large debt?
What should we do with the revenue collected?
Do the results of the government's spending justify the taxation?
Can we maintain the current level of spending? Are we prepared if we cannot?
What are the primary reasons why businesses are not hiring as much or as well as before and what can we do about it?
All of these questions demand a close look at the numbers and variables--and perhaps some experimentation. Common sense is insufficient. And if we are to look to history for the answers, we have to consider not who was in office when the economy improved or worsened, but what policies were implemented, how much time they were given to take effect, what confounding variables were at play, what differences we face today, and much more.
As our beloved John Myste frequently points out, one can find a chart and narrative to support just about any position. This is not to say, of course, that all charts and narratives are wrong. The facts may indeed support one side over another, assuming that we must choose. I don't claim to be an expert--and that's precisely why I can't confidently and passionately hold a belief either way.
Now, I admit that I do have leanings: on this very blog, I have expressed disgust with the GOP, disdain for corporate excess, and support for various forms of wealth redistribution. But I am not at all confident that we can address the problems of today and the future simply by voting out Republicans, shrinking wage gaps, and redistributing wealth. As our problems run deeper--down to a culture that I regard as self-entitled, myopic, and unsustainable--so must our solutions.
Then again: I am no expert.
Like you, John Myste is a supporter of, and occasional contributor to, the site. I don't think I do violence to his views when I interpret him as saying that, since nothing is truly knowable, we should disregard evidence and simply go with our biases.
I think your approach is one of healthy skepticism. The temptation I believe you resist is to lapse into a lazy cynicism. When evidence gets complicated we have some responsibility to do our best, acknowledging that we can be wrong.
Charts, like any illustration or presentation, can be useful. When they look a little suspicious, we should look under the hood.
Indeed. Statistics can be extremely useful when analyzing a stack of data. But it can also be nothing more than "enhanced interrogation" applied to numbers. That is, the numbers can be coerced into saying exactly what the interrogator wants them to.
So you want more data. If you're interested in finding out what's really going on, you ALWAYS want more data. The problem, especially in economics, is that the data are extremely tricky to get.
As I think I've probably said before, the nice thing about mathematics is that there's exactly ONE right answer. The irritating thing about the humanities is that there's almost NEVER exactly ONE right answer. The horrifying thing about economics is that both of the above are true.
So ... I can't say that I disagree with Ryan much. He's got a good point. We're fumbling in the dark, and both sides sometimes engage in the fine old art of lying with figures. And we don't often know enough to know which one is which.
That said, my gut feeling is that just right now, the participation rate isn't the right figure of merit to use. But I'm a rocket scientist, not an economist. I could be wrong.
Actually, you brutalized his views. You jumped them from a crook in a dark ally, and beat them with chains and baseball bats.
I do not believe “we should disregard evidence.” I have never thought this. I believe we should regard scientific evidence as scientific evidence and we should regard competing opinions, often expressed with charts and graphs of whatever data happens to support our philosophical views, as competing opinions supported with competing charts and graphs.
To solve the problem of fake proof, we should argue what we believe for the reasons we believe it. Additionally, we should take special care not to label fake proof as “facts.”
Cognitive psychologists have basically proven that we form our opinions based on “intuitions,” and then start “seeking evidence to confirm.” We all do this with a single exception: the point where we recognize we are doing it, and consciously stop. This has to be done on an issue by issue basis. All beliefs begin with intuition, which is to say, faith. I see this routinely outside the lab in this great experiment we call life. What cognitive psychologists sometimes call intuitions, I am more likely to think of as opinions based on axioms, as I think these intuitions are children of axiomatic assumptions.
The economy is a perfect example of this. It is way too complex with far too many variables for anyone to understand it. Amateur “philosophical economists,” who stock shelves by day and philosophize by night, deny this, and claim that the answer is obvious, and they found it. They learn enough in their off hours to convince themselves, not only that they know something, but that they have the truth! A little learning is a dangerous thing.
Experts who dedicate their lives to the subject cannot agree with each other. There is no authoritative consensus. Experts consider a wealth of data that the average citizen may see as too arcane or too trivial to think about. They draw on a wealth of experience that the average person does not have available. The economy remains an impenetrable mystery to economic experts as body. Cabbies, grocers, and Burr Deming, have it all figured out.
If I challenge the cabbies’ opinions as irrational, not irrational as a guess, but extremely irrational as an assumption of truth, what fallacy is used in rebuttal? “Well, if you don’t agree that my charts explain all relevant economic variables and rebut all other competing charts, then you are simply an epistemological buffoon. You discard evidence, reject science.”
I do not reject science (evidence). I embrace science. You could not have performed the controlled studies you imply. Your “studies,” are uncontrolled anecdotal observation performed as part of a regimen of personal cognitive therapy. To make things more confusing, you are both therapist and patient, and you don’t even realize you are treating yourself. As a scientist, you are an obvious charlatan. You pretend to own truth you could not have possibly acquired. You never devised a valid study to confirm your “intuitive” hypothesis.
I say this cautiously because I know you have a Strong Opinion, blessed be He, and you have Charts, and you state passionately that they “are Truth.”
You are the liberal equivalent of The Heathen Republican, who has offsetting conservative rebuttals about the economy that are as persuasive as your liberal arguments so far as I can tell. They fool all conservatives who think they own Truth in the absence of a scientific method of acquiring it.
I do not reject your evidence, Mr. Deming. I do not reject The Heathen Republican’s competing evidence. I embrace science and I do not call one competing theory among many, backed up by one competing chart among many, the Truth. If I did, I would not be very scientific, now would I?
Newton’s Laws of Motion, Cognitive Dissonance, Confirmation Bias, even the theory that things evolve are all evidenced. There are some things that it is scientifically plausible to believe are representations of the Truth; your economic philosophy is not among them.
The participation rate is bad regardless of the reasons for it and the improvement of other aspects of the economy. However, it could be offset by other factors, like how much money the working 63.6% is making and what sorts of jobs they have, what the unemployed are doing with their time and money, whether the jobs that the baby boomers leave behind still exist and can be filled by the market today, what we are paying to care for retirees, etc. The answers to at least some of these questions are also not pleasing.
Unfortunately, we can't ethically experiment on the economy. Even if we could, we still wouldn't have a satisfactory control group for comparison.
I must protest your comparison of Mr. Deming to the Heathen Republican. One of the two is much more amicable.
I have no idea what that means. But it's interesting.
We won't know what's driving the participation rate's decline for a while yet. If we get back to ~5% unemployment, and we still have a low participation rate, that might indicate that the decrease was driven by a wave of retirements. If unemployment remains stubbornly high, say ~7%, that's indicative of a long, painful recovery added to that wave of retirements.
If I had to guess, my guess would be the latter. Recoveries from financial crises are always long and painful. That was going to be true no matter who was elected in 2008, and will remain true no matter who is elected in 2012.
But the Democrats are going to try to put the best spin possible on their record, and will tout the decrease in unemployment as evidence of a successful policy. That's their job as partisans. Likewise, the Republicans are going to tout the participation rate as evidence of failed policies. Same deal, it's their job as political partisans. On the evidence, especially on THIS evidence, you don't have enough information to say that either one is entirely right, or entirely wrong.
Actually, in mathematics there are many things that have multiple exact and correct answers.
Considering all of those on the left who compliment my site (and me specifically) for its civility, I can't help but think I am not the problem.
Regarding one subject from the comments, the Labor Force Participation rate is neither good or bad. It is simply a statistic.
It wasn't "bad" that labor force participation in the 1960s was under 60%. It was a sign of the times and evidence that many women chose to stay home instead of work.
It wasn't "good" that labor force participation peaked under Clinton at 67.3%, but it sure shows how the country has changed with two income families. It probably was good, indicating an economy so strong that after reaching full employment, we pulled people into the workforce.
But we can't know what's good or bad with just one statistic. Like all statistics, we need to use changes in the data to interpret what is happening in the economy and the context of other data.
It would be good if the unemployment rate were falling at the same time that participation was going up. It would be bad if unemployment were increasing as people were leaving the labor force. There are other combinations that can be argued as good or bad depending on the context.
If the baby boomers are simply retiring, therefore participation is falling, that is not a bad thing. If the participation rate is falling faster than boomers are retiring, that's a sign of economic trouble.
I have argued (and proved with many charts (wink-and-a-smile to John)) that the unemployment rate under Obama is only improving because of the fall in the participation rate. If the participation rate were identical to when he took office, unemployment is above 10%. I don't think there is a good way to spin that number.
I have not yet checked the number of boomers retiring, but if it matches the number of those leaving the labor force, I couldn't blame Obama anymore.
Good point on the inadequacy of a single statistic as a basis for final judgment. Looking under the hood is a good idea.
Ryan's more personal comment was ambiguous. "One of the two is much more amicable" does not specify which was which.
When someone doesn't like me, I just figure I have had the bad fortune to bump into a good judge of character.
Besides, Mama always liked you best.
It's also not about ideology. I acknowledge that liberals can be rude as well, which is why I rarely read anything on Bret's blog. I certainly prefer Burr's politics over yours for the most part, but your presentation is what gets me. Your new "Questions the Left Won't Answer" series comes to mind.
As for labor participation, I acknowledged that the decline could be offset by other factors. But I call the decline bad because I am not yet convinced that any of those other factors really are offsetting it. I understand how attributing it to boomer retirement gets Obama off the hook and eases some fears, but it is still not good that the percentage of people who are not working, which correlates with the percentage of people collecting money from the government without producing, is increasing, especially given the deficit/debt issue.
Unless I'm misunderstanding something, of course. You all probably know more about this than I do.
If I accidentally complimented anyone, I apologize for this egregious mistake.
Actually, I don't recall saying that a chart proves anything. Although I hesitate to speak for Heathen, I suspect he never said anything approaching that. A chart is simply a visual representation of data.
With respect (of course) it is your blanket rejection of that data that I point out. Ryan and Tim seem to express a healthy skepticism, a desire to look under the hood, before accepting evidence.
You reject evidence without all the bother of looking at it. Possibly this only happens when it is illustrated in chart form. My observation is that your rejection of evidence is less restricted than that.
If I am wrong then, like Mitt Romney, I "apologize to anyone who may have been offended."
"I have argued (and proved with many charts (wink-and-a-smile to John)) that the unemployment rate under Obama is only improving because of the fall in the participation rate. If the participation rate were identical to when he took office, unemployment is above 10%. I don't think there is a good way to spin that number." ~ The Heathen Republican, a few clicks up.
What I have seen is that people provide their own charts (encapsulated arguments) of certain things and argue this as "the reason they think something." They produce the charts after "thinking something," not before.
I have produced my own tables of data at John Myste Responds. I don't deny evidence. I deny faith. When you try to reduce the economy to a specific set of data you choose to claim represents it, you are not looking at "the facts." You are selecting "the facts" that best support your position.
You and Heathen both look at "the facts," which soundly refute each other’s’ telling of the economic story. To support your positions, you scrounge up more "facts" while rejecting, and seldom addressing, each other’s.
Each of you thinks what you think prior to locating a single "fact." Each of you often suggest I reject evidence for not selecting your "facts" as the "Truth," blessed be He.
I acknowledge facts and evidence where I find them. I seldom find them hiding in justification arguments. If you presented both sides, both charts (fact sets) that are floating around the web (or both real arguments), and addressed them all objectively, I would consider them well worth the time to investigate if they were telling enough.
However, I am not going to submit to everyone who tells me that I will worship their God if only I read their Bible. There are too many Bible's for that. If I clearly see that there are thousands of variables and the tale is being reduced to a few, I already know the argument is fallacious. I need no prayer or Biblical readings. I have enough data to form a rational evidence based conclusion, not about the economy, but about some else’s “scientific method” in evaluating it.
I continue to hesitate at speaking for Heathen. It did strike me that he was writing with a touch of humor.
It seems to me that you conflate evidence with proof, then ascribe that equivalence to others. I don't sense a similar confusion on the part of Heathen. I don't believe I am possessed by it myself.
I'm fine with a decent skepticism toward evidence. That's why I recommend "looking under the hood." I endorse the approach Ryan and Tim seem to take. I don't know that Heathen accepts a similar approach. I suspect he does, based on his willingness to occasionally change his opinion. As facts and logic become apparent opinions should sometimes change.
I appreciate the insights you provide, John. But, although I usually disagree with Heathen's conclusions, I suspect from what I have seen that his approach to evidence is more sound.
A skeptic will examine evidence with some care, knowing that other explanations may exist. The skeptic will even devote some effort endeavoring to find those explanations.
A cynic takes a lazier approach. Why even look at mere evidence? After all, if you can't really prove anything, why bother?
I am OK with that, but you think there is only one or two cars, and you call them “the car,” and cite the evidence you found about cars: “I looked under the hood. Cars have eight cylinders and one carburetor.” The Heathen Republican’s car has a fuel injector, but you cannot believe that. You don’t see fuel injectors and he is not looking at the Facts, blessed by They.
“I appreciate the insights you provide, John. But, although I usually disagree with Heathen's conclusions, I suspect from what I have seen that his approach to evidence is more sound.”
That sounds like a concession. You repeatedly imply that those like Heathen who have opposite opinions, simply don’t accept the facts. Yes, you believe his arguments are fact-based.
“A cynic takes a lazier approach. Why even look at mere evidence? After all, if you can't really prove anything, why bother?”
This is again, a straw man. I have never said why look at the evidence. I have said why cherry pick the evidence you need to find? I have never seen you present “the evidence,” about the economy or at least not that I recall. I have seen you present the evidence you need your readers to see. If you took the time to review “the real evidence,” provided by Heathen (et. Al.) in copious amounts, and then put your “evidence” against it, I would consider your evidence more circumspect than I do. The economy has thousands of variables. Selecting a couple and calling it the economy’s story is not forming an evidence-based opinion. It is, I daresay, refusing to look under the hood.
You said: "It seems to me that you conflate evidence with proof, then ascribe that equivalence to others."
John did exactly this earlier in the week, and ascribed the equivalence to me when I called him on it. He accused be of offering a proof when my only intention was to offer evidence. (Found here: http://heathenrepublican.blogspot.com/2012/04/bushs-record-still-better-than-obamas.html)
Since this comment string is now a week old, I fear John will never read this. Not that it matters. He is happy to point out the faults of others, but I don't think he will ever acknowledge his own.
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