The Art of the Lie

Xpatriated Texan doesn’t believe the American economy has fared well under President Bush and takes exception to much the President had to say about it in his State of the Union address.

In his post, the State of the Lie, Hart disputes the President’s assertion that the American economy is the fastest growing of any major industrialized nation. He tries to prove his point, first by using GDP statistics from 2000 through 2004.

Why did he begin his assessment in the year 2000? Well, as Hart explains later, ‘Bush took office in 2000’. Of course President Bush was sworn into office January 20, 2001. What happened to 2005? Who knows, but the 3.5% rate of growth in the U.S. economy last year may have bolstered the President’s case. You know, there’s lies, damn lies and statistics. We’ll give you the real statistics.

The actual annualized GPD growth rate per quarter for the past four years, are shown below. The forth quarter may yet be adjusted, but it did break a streak in which the economy had real growth rates of 3.0% or higher in 10 consecutive quarters. The last time the U.S. economy was on such a rip? That would be 1983-1986, when Ronald Reagan was President.

U.S. GDP Growth

1.1 - Q4 2005
4.1 - Q3 2005
3.3 - Q2 2005
3.8 - Q1 2005
3.3 - Q4 2004
4.0 - Q3 2004
3.5 - Q2 2004
4.3 - Q1 2004
3.6 - Q4 2003
7.2 - Q3 2003
3.7 - Q2 2003
1.7 - Q1 2003
0.2 - Q4 2002
2.4 - Q3 2002
2.2 - Q2 2002
2.7 - Q1 2002

Hart also has calculated GDP growth rates for the same erroneous time period for other selected countries, thus supposedly showing the U.S. economy is not the envy of the world. But, before we get to that, let’s see what the President actually said:

Our economy is healthy and vigorous, and growing faster than other major industrialized nations. In the last two-and-a-half years, America has created 4.6 million new jobs -- more than Japan and the European Union combined. Even in the face of higher energy prices and natural disasters, the American people have turned in an economic performance that is the envy of the world.

Hart says: “We aren't growing faster - we're barely keeping pace.” Well, let’s see, in terms of GDP per capita for the countries our friend has chosen: it’s the United States - $41,800; Canada - $32,800; Australia - $32,000; U.K. - $30,900; France - $29,900; and Germany – $29,700. We’d say the United States is setting the pace, wouldn’t you?

Hart rambles on about capital formation, inflation, net-positive cash flow and budget deficits for his selected countries. We have no idea what he’s talking about as he doesn’t provide much in the way of data. Anyway, he’s concluded the U.S. economy is lagging its peers.

It’s a rather suspect conclusion when you consider the World Economic Forum’s Global Competitiveness analysis agrees with President Bush. In a recently released report assessing the relative condition of economies in 117 countries, here are the results. The group ranked the United States as number 2 in the world behind Finland. Australia comes in at #10; Japan - #11; Canada - #14; Germany - #15, and France - #30. (FYI, you might remember the name of the group – Senator Kerry jetted back from Davos, Switzerland, where he was attending the World Economic Forum, to rally his colleagues for a filibuster against Alito.)

Oh, and creating 4.6 million new jobs -- more than Japan and the European Union combined, despite recent events? It didn’t factor into Hart’s analysis. Why? And then we realized, Hart was quoting from the 2005 State of the Union address, and not the one given this past Tuesday. We checked his SOTU link and sure enough, the date was February 2. 2005.

Okay, we’ll play along. Here’s the Bush quote Hart dissects next, albeit from last year’s SOTU:

In the past four years, we have provided tax relief to every person who pays income taxes, overcome a recession, opened up new markets abroad, prosecuted corporate criminals, raised homeownership to its highest level in history. And in the last year alone, the United States has added 2.3 million new jobs.

First, Hart takes up the tax issue and says: “Technically, it's correct.” But, apparently the stated fact is beside the point. Our friend then moves into the tax cuts have caused a huge federal deficit argument. We beg to differ, government spending causes deficits. In any case, after the ‘Bush tax cuts’ federal revenue increased to the highest levels in history.

On to overcoming a recession. Hart does some analysis and concludes – “No recession. How can we bounce back from a recession that never happened?” That might come as a bit of a shock to Senator John Kerry. During the presidential campaign of 2004, Kerry used to say Bush has “the worst economic record since Herbert Hoover.” Herbert Hoover is usually blamed for starting the Great Depression, and for good reason. Hoover raised the top income tax rate from 25 percent to 63 percent and signed the Smoot-Hawley tariff, a 40 percent tax on imports. But we digress. Most people acknowledge Bush inherited the start of a recession when he took office in 2001.

Hart grudgingly concludes if you fudge the numbers, maybe there was a recession in 2001, but it was one of the shortest in history. “I would hope, after four years, that we would be recovered. It's no great accomplishment.” Bush was actually speaking after three years - Hart’s quoting from last year’s SOTU, remember? But, why is limiting the duration of a recession not an accomplishment? Two things happened in 2001 that had a major impact of the nation’s economy - first was the ‘Bush tax cut of June 2001’ and second, the terrorist attacks of September 11, 2001. Obviously, 9-11 was a costly blow to the economy and thankfully, the tax cuts were already in place to mitigate the economic repercussions.

Next Hart disputes the President’s claim that new markets were opened abroad. He doesn’t provide a link or time period, but cites a World Bank statistic indicating U.S. exports as a percent of GDP “shrunk slightly from 11% to 10%.” He does link to a third quarter 2005 BEA report showing a foreign trade deficit. Does he prove new markets have not been opened abroad? Hardly. The U.S. is the largest exporter in the world (importer too) and total U.S. exports grew from $1.072 trillion in 2000 to $1.152 trillion in 2004. For a review of the new markets opened to the American economy, please see U.S. Trade Policy Agenda and Annual Reports.

Next, “prosecuted corporate criminals.” Hart writes: “Everything, except for Martha Stewart's conviction, has been incredibly slow to develop and there has been absolutely no action on corporate accountability. Read the Corporate Crime Reporter and see if you agree. As for no action on corporate accountability, how about the Sarbanes-Oxley Act of 2002, does that little piece of corporate accountability legislation count? For more on the Bush administration efforts in this area, check out the Justice Department Memo on Federal Prosecution of Business Organizations.

Homeownership? Hart notes “the growth in home ownership is very slight” and “more people own homes, but that's due to a growing population, not growing prosperity.” First of all, growth in homeownership is reported as a percent of U.S. households owning versus renting a home. As the population grows, so do the number of households. That’s why the statistic is reported as a percentage. It enables comparisons from year to year, regardless of population growth.

Homeownership in the United States is at the highest level in history at 69% both this year and last year. Over the last 30 years homeownership had remained at about 64% until 1995, when it increased to 65.1%. By the end of President Clinton’s term in 2000, homeownership was at 67.5%. Interestingly, Republicans took control of Congress in 1994 for the first time in 40 years. The baby boomers coming into their peak income years didn’t hurt.

Unsurprisingly, homeownership in the high tax/ high cost-of-living northeast and west now stands at 65.4% and 64.6%, respectively. While in fly-over-country - the south and midwest -with lower taxes and a lower cost-of- living, homeownership rates are 71.1% and 72.8%. The west and the northeast have lagged in homeowner for the entire 30 year period.

Hart ends his post with these words:” I don't know where the President is seeing all this wonderful growth he babbling about. Perhaps he needs glasses. Perhaps he needs new advisors that don't lie to him. We definitely need a new President.”

Someone may need glasses, advisors that don’t lie and to stop babbling – it just doesn’t happen to be President Bush. The country will have a new President in 2009. What do we do about getting political science professors that know what the hell they are talking about?

Update: This update is in response to a comment left by Thurman Hart on this post, the Art of the Lie.

In you comment you concluded: “It is, unfortunately, what I've come to expect from this blog. It's a shame, because I've seen flashes of intelligent and straightforward discussion. To this point, they remain flashes only.”

Who are you kidding? You attempted to prove various statements Bush made in his SOTU were misleading - “the state of the lie” - and we proved each of your conclusions wrong. You have not refuted any data or conclusions we presented in our post. Now you have the temerity to wag your finger at us.

You obviously felt no compunction about claming we need a new President based on the baloney you wrote or in calling Bush’s advisors liars. If you didn’t know ‘where the President was seeing wonderful growth’ when you wrote your post, you should know it now after reading ours. You certainly have no qualms with “quoting around parts” of our post or the President’s SOTU. We dispute your claim we did so in our post.

We realize you are human and anyone can make an honest mistake, but your post was riddled with mistakes, unsubstantiated claims and false conclusions. The fact that you are a political science professor is all the more troubling.

Yes, you linked to the wrong SOTU, but that was the least of your errors. The following are the President’s points you considered ‘misleading. And we repeat you failed to prove any of his points were untrue or misleading.

America's economy is the fastest growing of any major industrialized nation.
Provided tax relief to every person who pays income taxes
Overcame a recession
Opened up new markets abroad
Prosecuted corporate criminals
Raised homeownership to its highest level in history

Now, as to the remainder of your comments:

You attempted to prove the U.S. economy was not the fastest growing of any major industrialized nation by presenting average growth in GDP purportedly for the years 2000-2004. You erroneously stated President Bush was in office in 2000 and you mistakenly cite data from 2000 in other areas of your analysis. Perhaps it’s just another of your “careless” mistakes, like quoting form the 2005 rather than the 2006 SOTU. For us it reinforces the idea that you don’t know what you’re talking about.

Your excuse for not including 2005 GDP data was “If you look at the data I used, then it's pretty easy to see why my analysis is cut short - that's where the data ends.” So if you can’t find the essential data in question, you can just pretend it doesn’t exist? You are unable to back up your snide comment “So much for the contention that we're growing faster than anyone else. ”You are proving our point; you don’t know what you’re talking about.

We provided data, with link, showing U.S. GDP growth has in fact been excellent over the past several years. We also provided data, with source, proving our country’s per capita GDP far exceeds the “peers” you selected for comparison. Your statement - “We aren't growing faster - we're barely keeping pace” - is totally false. Once again demonstrating you don’t know what you’re talking about.

You wrote in your comment: “However, you admit: "We have no idea what he’s talking about" and conclude: "What do we do about getting political science professors that know what the hell they are talking about?" and Um, forgive the observation, but if you don't know what I'm talking about, then how can you judge what I'm talking about?

Here is what we actually wrote: “Hart rambles on about capital formation, inflation, net-positive cash flow and budget deficits for his selected countries. We have no idea what he’s talking about as he doesn’t provide much in the way of data. Anyway, he’s concluded the U.S. economy is lagging its peers.”

Why did you purposely use a partial quote, take it of context and attempt to make it sound as though we didn’t grasp your post? Let us take a guess. You were trying to discredit us in a false and condescending manner.

Beyond you erroneous GDP data sets and conclusions, you attempted to prove our economy is not the fastest growing of any major industrialized nation with a few more ‘facts’. The ‘facts’ you throw out are actually conclusions and are not backed up with data to prove your point or a link to a fuller explanation of how one might reach your conclusions regarding the current state of the U.S. economy.

Your additional “facts’ were as follows:

Of the countries listed, only the UK lags the US in capital formation.

What year or years did you use to arrive at this conclusion? Is the U.S. currently lagging in capital formation? What are the statistics for each country? If the U.S. is currently lagging in this area, by how much? Is the difference widely considered to be significant? We don’t know the answers to these questions because you didn’t provide the data. It was your job to prove your conclusion with the relevant facts. You haven’t provided facts, only your opinion based upon data unknown by your readers.

France and Germany have lower inflation, with the other countries slightly higher than our 2% average.

What year or years did you use to arrive at this conclusion? What is the current rate of inflation for each country? How much lower is inflation in France and Germany? Are France and Germany experiencing deflation? What do you mean by slight? Why did you even bother to bring up inflation, as it is low and appears to be under control? Given all the economic measures, why did you choose inflation, rather than say, unemployment, for comparison? We don’t know because you didn’t provide the data or an explanation as to why you considered current rates of U.S. inflation significant or alarming.

Oh yeah, Australia and Canada both have a net positive cash-flow (no deficit). Germany and the UK have a lower deficit and France is about even with us.

Once again you provided no specific information for you readers to evaluate – years analyzed, actual statistics, etc. While cash flow is one economic measure, do you believe it is used to calculate economic growth?

Now do you understand why we wrote “we don’t know what he’s talking about” in relation to your points on capital formation, inflation and deficits? How could anyone know, because you failed to provide the necessary time frame, statistics, etc. for each of your statements. The only conclusion a reader could reach was the on that we did – “Anyway, he’s concluded the U.S. economy is lagging its peers.” Did we miss your point?

We provided data, with link, to the World Economic Forum’s Global Competitiveness analysis that proved otherwise. The U.S. may not be #1 in every single economic metric, but the Forum’s analysis and rank provides the complete economic picture for the 117 countries evaluated. Your cherry picked data and conclusion the U.S. lags its peers are off the mark. Again, highlighting you don’t know what you are talking about.

In your comment you write: “As far as not giving data, I linked directly to the World Bank and the US Bureau of Economic Analysis. So, you can look for different figures (and there are a ton of economic analyses out there) but it's simply wrong to say that the data isn't there.”

Yes, you linked to the World Bank site and now you tell us we “can look for different figures (and there are a ton of economic analyses out there)”. Why should we waste our time looking for “figures” in a vain attempt to prove your point? If the “figures” were “out there”, why didn’t you provide them? Our guess is you can’t or you would have included them in your post or in your comment. That was our point.

It’s clear the President was speaking about the state of our economy at the time of his address. Using old data is not relevant to the President’s point about the current state of the economy. Further, he was comparing the U.S. against the economies of major industrialized nations. This refers to the G7 – United States, Canada, United Kingdom, France, Germany, Italy and Japan. This is something you should have known.

In your GDP analysis you left out two G7 countries, Italy and Japan, and replaced them with Australia and high income“(HI) countries. Australia has a workforce of about 11 million people, hardly an economic peer to the U.S.

The World Bank source you used considers a high income country to be one with per capita GDP of $10,066 or more. (U.S. per capita GDP is $41,800). High income countries include such major industrialized powerhouses as Andorra, Cayman Islands, Greenland, Liechtenstein, Slovenia, U.S Virgin Islands. The list does, of course, include others, plus the G7.

Your comparison of major industrialized nations to “high income” nations is a poor comparison and basically meaningless. To include this statistic demonstrates you don’t know what you’re talking about.

We did notice 2004 GDP growth rates for the G7 from the source you cite - World Bank - World Development Indicators database – here they are:

G7 GDP - 2004
Australia – 3%
Canada - 3%
France – 2%
Germany – 2%
Japan – 3%
U,,K - 3%
Italy – 1
U.S. - 4%

Most people would conclude the U.S. GDP was growing at a faster rate then the major industrialized countries for 2004. For some reason you don’t. Could it be because you don’t know what you’re talking about?

Your link to the US Bureau of Economic Analysis was provided to supposedly prove there was no recession in 2001 and the link comes after your conclusion “So much for the contention that we're growing faster than anyone else.” Our comment about your lack of data and links referred to your ‘points’ on capital formation, inflation and deficits.

You wrote in your comment: “I don't mind disagreement, and although I hate that I linked to the wrong statement, I don't mind that you caught that mistake. I am, after all, human. However, I really wish you would actually represent what I said rather than quoting around certain parts of the post.”

It would seem that you mind disagreement very much and make excuses for your errors and lack of data to back up your claims and unfounded conclusions. You pretend our comment “we don’t know he’s talking about” applied to your entire post when in fact it’s clear we referring to your lack of data to support your points in specific parts of your post.

You provide one example of our supposed misrepresenting your writing, taking exception with our statement:” Hart notes “the growth in home ownership is very slight” and “more people own homes, but that's due to a growing population, not growing prosperity.” Perhaps you could explain how we misconstrued your point? What is you point? We thought we were attempting to prove the President’s remark - “raised homeownership to its highest level in history” - to be false.

Your linked source proves the rate of homeownership is at the highest level in history and therefore, Bush’s statement was true.

You compare growth in homeownership during Clinton’s 8 years in office to Bush’s 5 years. What was that supposed to prove? It's not an appropriate comaprison - 5 years to 8 years.

You also claim there was a net loss in homeownership under President Bush I, as well as, President Reagan. How did you arrive at those conclusions? For example, the average homeownership rate for GHW Bush’s first year in office was 63.9 and in his last year it was 64.2.
In any case, what do these statistics have to do with refuting the President's claim about current homeownership rates? Nothing.

Bush was referring to the rate of homeownership and you understood he was referring to the current rate. And we know that because you started your paragraph with "Home ownership rates?” All of the data you provided were in terms of the rate (percent) of homeownership. Then you concluded your paragraph with: “More people own homes, but that's due to a growing population, not growing prosperity." So what conclusion did you want your readers to draw from your final sentence on the topic? We concluded you didn’t know what you were talking about.

You wrote in your comment:: “In fact, it's the exact same link that you provide. I wonder how you found it...” What are we supposed to get out of that snarky comment? That we wouldn’t have been able to find U.S. homeownership data without your help? And by the way, we linked to a different U.S. Census report than you. Your link was to a report entitled, 4th quarter 2005 - Table 5, and our link was to a report entitled, Historical Tables – Table 14. Our link provided more comprehensive data, including homeownership rates by region. As you would say “so much for” exact same. We would say you don’t know what you’re talking about.

So what was unfortunate about our post? That fact we pointed out your analysis was poorly sourced and reasoned? The fact we demolished every false claim you made against the President in your post?

You are quick to call others liars, wing nuts and other pejoratives. We may be only humble “plumbers” and you a “noble professor”, but at least we can recognize bullshit when we see it and your post was complete bullshit.

Yes, we read your post last month that included your thoughts on social class, your ’’noble calling’ and your high regard for a professor’s opinion:

Money, surprisingly, isn't enough to boost you into the next social class. Otherwise union plumbers would be ranked above university professors, and most people would agree that they aren't. The professor has more prestige attached to his or her profession, is generally considered to follow a more noble calling, and his or her opinion will generally carry more weight in an open debate.

We’ll take a plumber’s facts over a professor’s opinion any day. Most sensible people would.

Update II: This update is in response to a second comment left by Thurman Hart on this post, the Art of the Lie.

You wrote: "As I said, take a class and learn what you are talking about."

We’ve taken our classes and we know what we are talking about. If your post – “state of the lie” is representative of your understanding of economics, then you should consider remedial classes in the subject.

You apparently also have a problem with reading comprehension if your comment is representative of your skills in that area. Here’s what you wrote in your comment : “To say a plumber knows more about everything than anyone else, however, is about as stupid of a statement that anyone can make.”

Yes, that would be a stupid statement; the thing is we didn’t make it. Here’s what we wrote: “We’ll take a plumber’s facts over a professor’s opinion any day.”

Our comparison was between a plumber with facts vs. a professor with merely an opinion. Facts are objective and opinions are subjective, regardless of who presents them.

Did you happen to notice the quotes around the word plumber in our sentence that included these words: “We may be only humble “plumbers”.” Our use of the word ‘plumbers‘ was a metaphor.

You wrote: “I have no idea if you're a plumber or not - you simply haven't the courage to even disclose your real name, much less any real area of expertise.”

Does name and occupation really matter when verifiable facts are presented and discussed? Facts don’t change based upon the presenter, because if they did, then they wouldn’t be facts, right? And no, unfortunately we are not plumbers.

Why do you assume it is a lack of courage that prevents us from disclosing “our real names”? That’s your opinion and not a fact. The name or occupation of the person(s) presenting documented arguments and facts is of no consequence. You have disclosed your name and occupation, but we are not aware of “any real area of expertise” you have.

You wrote: “It’s easy to throw stones when you can avoid responsibility by wrapping yourself in anonymity.” How are we avoiding responsibility? Our words and facts are there for all to see and to verify. And in terms of throwing stones – you were the one claiming the President was misleading and his advisors were liars. You were throwing stones at the President and we were deflecting them by presenting the actual facts about the economy. What stones did we throw at you? We presented facts, do you call them stones?

Or perhaps you consider this remark as throwing a stone: “What do we do about getting political science professors that know what the hell they are talking about?” Apparently you thought the shoe fit and you wore it. Note we used the plural – professors.

From our vantage point it seems as though you wrap yourself up in the robes of a professor, as one “follow[ing] a more noble calling” and whose “opinion will generally carry more weight in an open debate.” For those that buy into your notions of social class and status, perhaps knowing occupation makes a difference. It doesn’t to us.

We are not hung up about occupation, level of education, titles, etc. and see no honest purpose in trying to sway opinion one way or the other with these details. Perceived social, professional or academic status has never impressed us and we prefer to let facts and logic do the persuading. The fact we are anonymous is a red herring, is off topic and has nothing to do with our debate about the state of the U.S. economy or the President’s SOTU address.

Although, we freely admit it has troubled us to read your posts in which you have described your opinions that you have presented to your students as facts. And our fear is you have been teaching your students the same baloney as contained in your post we have been debating.

You wrote: “Again, I give people credit for being able to follow a discussion. If you can't; then it isn't my fault at all.”

Again you make this false charge. Another condescending attempt to discredit and deflect your failure to prove the President was lying in his statements about the American economy. We give people credit for backing up conclusions with widely recognized facts. We demolished the nonsense in your post and you are trying to claim we just don’t get it. We get it. You are not used to be challenged on the baloney you dish out.

You wrote: “The same thing applies for your station in life - if you feel slighted by the statement that a professor's job carries more status than a plumber's; then you have a problem with reality, not the statement.”

Another condescending statement and one that confuses opinion for fact. In whose reality is a plumber of lower “status” or “station in life” as compared to a professor? Yours? Why don’t you give us the official “station in life” list so that everyone will know where they stand in your pecking order?

Slighted by you remark? No, amused that someone who supposedly holds and promotes so-called “progressive values” writes about “station in life” and believes “a professor's job carries more status than a plumber's” We reject stereotyping people, but then again we aren’t liberal professors.