There’s a guy who runs around the state of Illinois spouting statistics showing that Illinois is a low tax state and that our public schools are poverty stricken. You may have read his stuff in the newspaper or heard him on the radio.
He’s so good at it, in fact, that lazy people on the political right pay him respect. Their respect isn’t based on any understanding of what the man is saying, but rather because they know he sure sounds authoritative.
Brad Schiller, a professor of economics at American University and the University of Nevada, Reno, wrote a terrific article in the March 10th Wall Street Journal revealing how some people misuse statistics.
You know, the old “figures lie, and liars figure” thing.
Democrat candidates and pro-big-government types wage class warfare and decry “tax cuts for the rich.” They cite statistics that prove “the stagnation of middle-class incomes” and “the deepening woes of the poor.”
Presidential candidates Hillary Clinton and Barack Obama have taken up the themes of John Edwards:
- Seven years of stagnant wages, declining incomes and increasing inequality.
- The middle-class squeeze.
According to Professor Schiller,
“Both candidates portray America as a nation where the fruits of economic progress have been usurped by corporate CEOs, equity-fund managers, inside traders and international speculators. Main Street has floundered, while Wall Street has flourished.”
Clinton and Obama have the census data to back up what they say. Except, of course, they really don’t. Like our Illinois travelling salesman for tax increases, they purposefully misuse the data.
Stagnant household incomes? Turns out that over the period of time measured by the census data the number of people in a household has changed dramatically. If the average household income is basically the same as it was ten years ago, yet there are fewer people in that household, it’s not accurate to say that there has been stagnation.
According to Professor Schiller, the “typical” household keeps changing.
“Since 1970 there has been a dramatic rise in divorced, never-married and single-person households. Back in 1970, the married Ozzie and Harriet family was the norm: 71% of all U.S. households were two-parent families. Now the ratio is only 51%. In the process of this social revolution, the average household size has shrunk to 2.57 persons from 3.14 — a drop of 18%. The meaning? Even a “stagnant” average household income implies a higher standard of living for the average household member.”
The lowest-earning 20% of households has seen their over-all share of the pie decreased during a 40-year period. But the poor aren’t getting poorer if the size of the pie has increased enormously.
“They’re not rich, but they’re certainly not poorer. In reality, economic growth has raised incomes across the board.”
There’s more. For example:
“The supposed decline of the poor and middle class is exaggerated even more by the dynamics of population growth. When people look at the ‘poor’ in any two years, they think they’re looking at the same people. That’s rarely true, especially over longer periods of time.”
“The average American household is doing pretty well. The evident gap between income realities and political rhetoric may help explain why the ‘two Americas’ theme…may ultimately fail to resonate with voters. On Election Day, voters may well turn to the candidate with the greater focus on a strong economy that increases everyone’s income.”
It will help if Republicans get in the game and correct the Democrats’ misuse of “data.”
Which brings us back to our Illinois friend-of-the-tax-increase. You’ll know him when you hear him – he constantly talks about what the “data” shows. Don’t you believe him.