Friday, August 5, 2011

What if Americans for Tax Reform Really Stood for Reform?

Over the last month or so, the partisan divides in Washington have made for glorious, unprecedented spectacle. If such wrangling had occurred on an episode of The West Wing or in a Jimmy Stewart film, it surely would have made for a magnificent few moments of entertainment. Alas, those folks aren't actors and real people's livelihoods are at stake.

For the past few years, I've listened on and off to conservative talk radio, read bits and pieces from the WSJ, and "liked" conservative organizations on Facebook, so that I could, perhaps, begin to understand a little bit better the roots of both populist rage, and the thinking that supports such rage. Today, I stumbled across a magnificent piece by Grover Norquist in Human EventsGrover Norquist, of course, is the leader of Americans for Tax Reform. His ideological stand is well known as he who forced Tea Party candidates to sign pledges against raising taxes.  Weirdly, the FaceBook feed suggested that "the results are not surprising."  On closer inspection, the results were not at all surprising because they were formed on the basis of a hard-line, radical ideology that's not really interested in (all) the facts. Have a look at the article, as it truly is magnificent--not because it's smart or effective--but because it's an incredible work of statistical manipulation. At the least, read as much as you can stomach. Then, if you remain intrigued, have a look at what follows: my post to Americans for Tax Reform FB thread that touted Norquist's Op-Ed.

And then consider: What does it suggest about our country that someone like Norquist could--feasibly--have as much influence as he does on politicians? How many politicians read an op-ed like this? And basing economic/policy decisions on this man's thought? 

That's a fascinating use of statistics (from ALEC!?!) for ideological means.  Let's look at unemployment numbers!

States Grover mentions as on the "right path"
Ohio: 8.8% (and going up); Pennsylvania: 7.6%; Wisconsin: 7.6%; Michigan: 10.6%; Maine: 7.8%.

States "most economically free" according to ALEC (?!?!)
Texas: 8.2%; Florida: 10.6%; Utah: 7.4%; South Dakota: 4.8%; Tennessee: 9.8%; Virginia: 6%; Colorado: 8.5%; Idaho: 9.4%; North Dakota: 3.2%; Wyoming: 5.9%  (notice that I'm not cherry picking data, like Grover; the Dakotas and Wyoming have different sorts of economies than the rest of the U.S. and were largely unaffected by the housing crash and the credit crunch).

States "least economically free" according to ALEC:
Pennsylvania (yes; it's on this list too): 7.6%; Rhode Island: 10.8%; New York: 8%; New Jersey: 9.5%; Oregon: 9.5%; Illinois: 9.2%; Hawaii: 6%; California: 11.8%; Vermont: 5.5%; Maine: 7.8%.

So this data strongly suggest that there is no correlation between "economic freedom" and unemployment rate (and that's generally a pretty good measure of growth, right?)  Hmmm.

So what happens if we look at, say, a different set of statistics, one that actually measures production, like GDP?

Here is the percent change in GDP from the BEA (http://www.bea.gov/newsreleases/regional/gdp_state/gsp_newsrelease.htm) for each of the above listed states.   Note how some of the "spenders" are doing better than Texas and Florida...that seem hero states to Grover. Ready?

"Right Path":
OH: 2.1
PA: 3.0
WI: 2.5
MI: 2.9
ME: 2.1

Most Economically "Free":
TX: 2.8
FL: 1.4
UT: 1.7
SD: 2.1
TN: 3.5
VA: 2.6
CO: 1.4
ID: 2.0
ND: 7.1*
WY: -0.3

Least Economically "Free":
PA: 3.0
RI: 2.8
NY: 5.1*
NJ: 2.5
OR: 3.4*
IL: 1.9
HI: 1.2
CA:1.8
VT: 3.2*
ME: 2.1

(Those marked with * are in the highest quintile of growth for 2010).

Altogether, further analysis suggest that Grover's use of data is a little bit suspect.  You don't think he did that purposefully?  Manipulated data to suit an ideological agenda?  Do you?

Of course not, I'm sure Grover will recognize the problems with cherry picking data for an argument that conflates taxation with economic stimulus.  Without question, he's probably already working on the corrections now....

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