This is just a short gripe at the NYT, and a feature
that they included in today's Op-Ed section.
It purports to compare how the economy does under democratic versus
republican administrations. They claim that they're computing the returns
on a 10,000 dollar stock investment under 40 years of republican
administrations and 40 years of democratic administrations, in the 80 years
The whole comparison is pretty idiotic to begin with. Comparing stock
prices over different time spans is already so noise-ridden that it's going to be damned hard to get any interesting information out of it. The idea of comparing things this way is really not reasonable, meaningful, or valid, because it's not comparing like to like. For one example, World War 2 was fought entirely under a democratic administration, and was a period of dramatic growth in the American economy. But the biggest reason for the growth was producing stuff for the war and the reconstruction; the same thing would, arguably, have happened if the republicans had been in
charge. Similarly, it includes the tech-stock bubble as a growth period under Clinton, and includes the tech crash under Bush, despite the fact that the tech bubble would have popped under Gore, had he (correctly) won
But far worse is the fact that they deliberately used data that
could, at best be described as total bullshit.
How do you make money off of an investment in stock? Ask any
economist that question, and I'll pretty much guarantee that they'll
name two things:
- Selling the stock.
The latter, selling the stock, is dependent entirely on the share price, which is frequently total disconnected from anything meaningful. (Anyone remember the share price for pets.com?) But that's the only thing
that they consider. The fact that many large, profitable companies hand
a portion of their profits to their shareholders as dividends - and that those dividends can represent a significant profit for the shareholders - is totally ignored by this.
The NYT considers omitting this to be a trivial thing. It's so utterly unimportant that it only merits mention in a footnote. In fact, it rates
mention below a footnote concerning the changes in the S&P
market index in 1957.
People who read this blog regularly know that I'm a very vocal liberal
democrat. I think that the policies of democratic administrations are better
for the economy than the policies of republicans. And I think that the constant
conservative harping about the so-called "Liberal Media" is just a convenient tool
that they use for manipulating press coverage.
But this is just
bullshit - this is not a meaningful comparison. It's a hopelessly
biased, fake, meaningless pile of nonsense. And I find it very hard to believe that they would have published it as a huge graphic in the op-ed section, three weeks before an important election, if it didn't confirm
The NYT should be ashamed.