Fact Checking
A friend of mine recently forwarded an email to me with the subject, “Facts are Facts”. She sent it to me as a joke. But it wasn’t sent to her as a joke. The contents of the email are supposed to persuade the reader that the current economic conditions in the United States are a direct result of democrats gaining control of the congress in the November 2006 elections. And furthermore, that this “change” and the current state of the economy are only a prelude to what will happen if Barack Obama is elected president because, as you probably know, one of the central themes of Senator Obama’s campaign has been that it’s time for “change”.
The fact that this email made it to my inbox means that it is managing to convince some number of people that it contains reasonable information. Which, on the face of it, is quite funny. But it also speaks loudly as to how easy it is to convince people that something is true by throwing numbers at it.
To be fair, I should note that the persuasive power of this email is enhanced by liberal use of extra-large, multi-colored fonts. Which we all know is a hallmark of top quality investigative journalism.
First, allow me to go over each point in the email. In place of large, colorful fonts, I’ll just use bold type for the points listed in the email.
“George Bush has been in office for seven and a half years.”
This statement, along with a later reference to the current price of the Dow Jones Industrial Average index, means that the email was written in July 2008, specifically, during the first week of July.
“A little over one year ago:” (Meaning sometime in the first half of 2007 the following statements are purported to be true.)
1. “Consumer confidence stood at a 2.5 year high.”
Looking at the graph, it does appear that consumer confidence was at a “high” relative to today. But to say it was at a “two and a half year high” belies the fact that the CCI had been meandering along for several years with a dip in mid-2005 and a larger dip in mid-2003, and was significantly higher in 2000. But certainly in the last year, it has dipped dramatically.
According to the graph, consumer confidence didn’t start to decline until around August 2007, which was 9 months after the November 2006 elections. What that date does closely mirror is the time when the nationwide drop in housing prices began to impact the economy and started to get a lot of news coverage, along with talk of a recession really beginning to be taken seriously.
But did the democrats cause all that in the 9 months since they were elected? No, they did not. In fact, the current congress has done very little since coming into office because it’s a democratic congress going up against a republican president. The senate majority is just one vote, which is not enough to get significant changes enacted when dealing with a president and his veto pen. It’s called gridlock.
2. “Regular gasoline sold for $2.19 a gallon.”
According to this page at the U.S. Department of Energy, regular gasoline dipped to a low of $2.19 per gallon in October, 2006, and was slightly lower at $2.10 in January 2007. But look closer and you’ll see that it hit a high of $3.00 in August, 2006.
There is no doubt that the rise in gasoline prices has been felt by most Americans. But the rise in prices and how much it’s hurt can’t be blamed on the current congress. It can be blamed on all the congresses and presidents for the past 30 years who didn’t enact any serious changes in our national energy policy. In fact, an argument can be made that the current congress has at least done something, however small, to help the matter, which was to raise the CAFE Standards. The first congress to do so in over 30 years! But it’s too little and too late.
3. “The unemployment rate was 4.5% and is now 5%.”
According to the United States Bureau of Labor Statistics, the unemployment rate in the first half of 2007 was as low as 4.4% in March 2007. The most recent statistic for July 2008 has the rate at 5.7%. But if you go back further, the rate was as high as 6.3% in June 2003.
Is it significant that the unemployment rate has gone up to 5.7%? Yes, but in the larger context, it’s not out of the ordinary, nor can its recent rise be blamed on the current congress.
4. “The Dow Jones hit a record high of 14,000+.”
The Dow hit a record closing high of $14,164.53 on October 9, 2007, not “over a year ago” and nearly one year after the 2006 elections. It closed today at $11,628.06, which is still at or above the stock market bubble highs (not adjusted for inflation) in early 2000.
Given that the original email was simply wrong about this one, it’s not really worth going into any detail about it, except to say that the rise and fall of the stock market has little to do with what congress does, at least in the short term, and much more to do, at least recently, with the housing crises and the fluctuations in oil prices.
The email goes on to lament that “consumer confidence has plummeted”, “gasoline is now over $4 a gallon and climbing”, “home equity has dropped by $12 trillion”, and a couple other hyperbolic statements related to the above “facts”.
I’ve already discussed the other claims, but I want to touch on the “$12 trillion” drop in home equity. I don’t know if the figure itself is accurate. But the number isn’t important. What’s important is that the email doesn’t mention the even larger rise in home equity that started back in the late 1990’s, and ballooned into the now infamous “housing bubble” after 2001. Why did that occur? This takes us back to 9/11. Prior to that day, we had already seen a huge bubble in the stock market that was still in the process of deflating and was only hurt more by 9/11. One of the decisions made at that time was to drastically and quickly reduce the Prime Lending Rate, eventually all the way down to 1%. And it stayed low for a long time. This artificially low rate for such a long time made money “cheap” to borrow. Combine that with people being afraid of the stock market after what happened with that bubble, and you have a perfect recipe for real estate prices to skyrocket. People and institutions wanted to put their money somewhere, but were hesitant to go back into the stock market. They saw how cheap it was to borrow money, and the rest is history that we’re still living through.
What we’re really facing right now is a two-pronged “assault” on our economy, led by the bursting of the real estate bubble, and followed up by large increases in oil prices. Neither of these can be placed at the feet of the current congress. The real estate bubble took years to grow and the price of oil and its effect on our economy has its roots in decades of inaction.
As I’ve shown above, several of the statements do hold a modicum of truth to them. But are any of them relevant to the democrats taking over control of congress in the November 2006 elections? I don’t see how, and the email itself gives no arguments explaining how the “facts” in the email are related to the democratic congress. That’s how these kind of email campaigns work. Those who already agree with the email won’t care about the accuracy of the facts. And most of those who are on the fence and might possibly be persuaded by the “facts” in the email won’t bother to do anything more than a cursory examination of those facts, completely ignoring the underlying cause and effect relationships.
Incidentally, the email starts out by saying, “This has to make you think a little bit.” … Indeed.
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Who in the world would send you such an email? Egads.
I can’t say. She made me swear a solemn oath of secrecy never to reveal her name until 10 years after her death, at which point she can be commemorated on a U.S. Stamp.
“No living person may be honored by portrayal on a stamp. Former presidents can be honored the year following their death; other people after 10 years.”
So now you know that this mystery woman has never been president, and is unlikely to ever be president (of the United States, at least).
Unlikely? Pfft.
She is nominated for President of the Association for Finding Jacked-Up Blogs.
Your blog is still jacked-up through IE, BTW.
Stupid IE. Ok, that’s fixed now, too.
Thank you, Madam President of the AFJUB!
Just lettin the Phils gain some false confidence…
Game 1 was just a scrimmage.
Grand slam, baby.
Blew your best pitcher on a scrimmage, huh? Not smart.