What does a -2.9% annual GDP growth rate for Q1 2014 really mean?

Fox News Explains GDP Shrinking

The above picture, from Fox News, shows the correct way to report on the recent finding that the national gross domestic product (GDP) shrank by 2.9% (annualized) during the first quarter of 2014. Specifically, this picture is the correct way to report on this finding because it does not distract or confuse people with things like history, comparisons to prior examples, or too many data points.  Plus, you have a frowning unattractive man depicted next to the gigantic negative number: so you know that things must be bad!!!!!

Indeed, the frowning unattractive man also tells you what you should believe about the explanation of this number: “This is obviously a result of an administration, five years of policies… high taxation, high regulation, high spending and high debt.”

How could he possibly be wrong?

Now, some liberals out there will present this same information in a way that is clearly liberally biased. For example, they will show you this graph:

GDP changes by quarter over several years

The problem with this graph is that includes too much information, and it might confuse people. It could even lead to uncomfortable questions, like:

“If a -2.9% growth rate is obviously the fault of President Obama’s policies, then which of President Bush’s policies are to blame for the -8.1% growth rate in 2008?”

Or worse:

“If a -2.9% growth rate is a clear sign that all of liberal philosophy is a total failure, then does that mean that Bush was also completely incompetent and all of his economic philosophies are also total failures?”

Clearly, this kind of thinking simply will not do!

Liberals have also been disseminating this second graph, which shows that although GDP was unusually low in the first quarter of 2014, other economic measures were up. For example, in the following graph we see that the total aggregate hours worked by private-sector nonsupervisory workers 1.4 percent, which is usually associated with higher growth:

Real GDP vs Private Sector Jobs

Showing this graph clearly can cause a liberal bias, because it can lead people to believe that some aspects of the economy have been improving despite that fact that Obama is OMFG KENYAN MUSLIM SOCIALIST HITLER.

If you look carefully, you will see that the above graph includes three data points where the GDP value is just as bad or worse, but the jobs value is worse than the first quarter 2014: these are the points on the same level or below the red point on the vertical axis, but to the left of the red point.

These points all occurred under George Bush as well, once again leading to the question: were those points also “obviously a result of an administration” under George W. Bush of ridiculous economic, and domestic and foreign policy failures?

No, these types of graphs clearly are not what people should be seeing.

People need to be sheltered from the burden of getting too much information, and asking questions. Therefore we applaud Fox News for not falling into that trap. That, after all, is how numbers and statistics can lead to LIBERAL BIAS!!!!

 


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