Thursday, August 05, 2004

More evidence that the NY Times has dropped in quality....?

Former Republican Sec. of State in the '80s, George Shultz, attempted to make an economic case for GW in yesterday's NY Times, using the following graph to illustrate his point.

The chart shows GDP growth based on percent change (quarter-over-quarter) and not levels of GDP growth.

I will assume Shultz's expertise is not economics -- and I can understand why. A few flaws exist with his analysis and the way in which he's trying to make his case.

For one, via the rules of mathematics, when you start at a lower level or base, you are going to arrive at higher percent increases. For instance, 10 growing to 15, or a 5 pt. increase, equals a 50% gain. However, the same 5 pt. increase from 50 to 55 equals just a 10% gain. Thus, for the purposes of this graph, recessions, or lower-level points, help both Bush I & II look good.

Beyond that, the truly astonishing feature of the chart -- which Schultz does not point out for obvious reasons -- is that Clinton was able to maintain an extraordinary consecutive years of quarter-over-quarter percent gains. Even I did not realize this fact -- wow, thanks Mr. Shultz! It makes me want to go back in time to look at other presidents to see if this has ever been accomplished before.

In other words, during those eight years, the level of GDP could have been growing, and a line graph would've displayed an upward-slanting line, however the percent change through the years could have diminished (i.e. growth in the growth, so to speak, could have been slowing or decelerating). Again, this gets back to (as I already mentioned) as the economy, or GDP, grows, the subsequent base or level is bigger and thus a larger percent increase becomes that much more difficult in future quarters. However, as you see in Shultz's chart, the GDP line for the Clinton years is not sloping down (which would have been OK as long as the line did not dip below the zero threshold), but rather maintains a steady line in the +2% to +4% range. Clinton was able to grow an ever-increasing-in-size GDP / economy at a near-constant percent-change clip. Again, wow!

I find it a bit depressing that the NY Times would give the "OK" to such an obviously less-than-rigorous presentation of the facts. And yet, I would say that it's likely even more depressing for Republicans that this may be the best that can be done in terms of making the economic case for GW.

But a big "thank you" to Shultz for offering just one more item of evidence showing how superior a president Clinton was! (perhaps this was the "liberal" Times' intention all along?)

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