How to Lie with Statistics
Reported by Ellen - March 30, 2009 -
Guest blogged by Dan
When I was much younger, I read a book entitled, How to Lie with Statistics. The book was later made required reading in our local school system. It has lessons for all of us; not the least of whom is Fox Business' Brian Sullivan.
Sullivan blogs at FOXBusiness.com:
The Wealth Redistribution Has Begun But Problems Loom
We can dismiss the cataclysmic language in the title and Sullivan's characterization of President Obama as "Re-distributor-in-Chief" as typical Fox verbiage. We can dismiss the horror, as Sullivan sees it, of New York State's alleged tax increase as vitally important to those who work on the Avenue of the Americas, but less relevant to those of us who live in the other 49. Of course, dismay at tax increases on those making more than $300,000 a year is of much more relevance to a Fox Pundit than to me.
But let's see how Sullivan plays with his statistics:
"There also appears to be little positive correlation between high taxes on the wealthy and job creation in America. The top tax rate in the 1970s was a staggering 70% yet unemployment averaged around 7-8% for most of the decade, topping out above 10% for the first few months of 1983. Only when the impact of the Reagan tax cuts of the early 80s began to be felt did joblessness fall. Franklin Roosevelt raised the highest end tax rate to 94%, and while the unemployment rate did fall in the later half of the 1930s it was still more than 17% in 1939.Please note the two decades Sullivan chooses to analyze. the 1930s and the 1970s. It's worth noting that Sullivan seems to have extended the 1970's to 1983. But what happened to the 40s, 50s and 60s? Did they have high taxes as defined by Mr. Sullivan? You bet'cha. Did they have relatively low unemployment? Yep. Are there plenty of other factors in each decade since the Depression to impact unemployment other than taxes? Sure, World War II for example.The favored argument of those in favor of higher taxes is that the Obama top-end is simply placing the tax rate back to where it was under Bill Clinton in the go-go 1990s. Supporters of that era tend to forget two important things. First, the 90s decade was highlighted by the boom in personal computing and the growth of an entirely new industry in the Internet and software. Second, we found out the hard way that much of the “go” in the “go-go” 90s was based on a bubble economy in tech stocks. The problem now is that we are recovering from a much bigger economic problem - the housing bubble created by the Fed’s interest rate cuts after the tech bubble burst and the terrorist attacks on 9/11. We also lack a nascent technology such as the Internet to help build a new economy and good jobs to drag us out of the slump as we did in the early 1990s."
Picking two decades out of the past seven to push an argument that high taxes equals high unemployment is spurious at best, dishonest at worst.
