Obama: Bad Data and Poor Statistics

How does the nation create jobs? Apparently the Federal Government needs to raise taxes. According to a statistical analysis, Obama concluded that this is what the American people need in order to create jobs. This analysis included data from a Google employee, who asked Obama, “Will you please raise my taxes?”1

In the same article, Obama is quoted as stated the following:

I mean, has anybody been watching the debates lately…You’ve got a governor whose state is on fire denying climate change.

The President has made a huge assumption regarding wild fires. The assumption is that there is a causal relationship between climate change and the wild fires. (The statement also assumes that climate change exists in the form of man-induced global warming, which is a topic deserving its own post.) The President is attempting to infer that the climate change caused the fires, and that because Rick Perry denies the Global Warming Theory (GLOWART), he is an idiot and people shouldn’t vote for him. The problem is that even if GLOWART existed, a causal relationship between it and the wild fires in the great state of Texas is hard to prove without significant data. Wild fires would require an increase in the global temperature over a multiple year period in order to exist. Furthermore, other explanations (lack of rain, increased smoking due to having to live with the Obamanomics of the twenty first century and thus an increased unextinguished cigarette butt population, etc.) would have to be negated in order to infer that GLOWART explains Rick Perry’s fire problem and that he’s an idiot for denying it. Instead of being reasonable, Obama has taken a cheap shot at Rick Perry.

Let’s venture back to the argument alluded to in the first paragraph. Obama’s argument is as follows:

  1. Premise: Raising taxes for the rich results in job growth.
  2. Premise: My statistical analysis proves that Americans validate Premise 1.
  3. Conclusion: Therefore, we must raise taxes on the rich now.

The problem with Premise 1 is that it is a false assumption. Here is a counterargument to Premise 1:

  1. Premise: All private sector jobs are created by businesses.
  2. Premise: Businesses seek to increase profit.
  3. Premise: Increased profit is an increase in revenue vs. expenses.
  4. Premise: Increased profit results in increased in investment.
  5. Premise: Increased investment results in increased jobs.
  6. Premise: Lowering taxes on businesses results in increased revenue.
  7. Premise: Lowering taxes on businesses results in increased profit.
  8. Conclusion: Lowering taxes on businesses results in job growth in the private sector

One might dispute Premise 5, stating that the investment might be in tools or real estate. However, those tools had to be built and a real estate agent was contracted in the land purchase. My point stands: raising taxes on the rich will not create jobs. The President may add that his plan is to create “shovel-ready” jobs in infrastructure. While there are many roads and bridges that need replaced, raising taxes (and thereby killing jobs in the private sector) is no way to accomplish this goal. Furthermore, these “shovel-ready” jobs are temporary. Finally, it takes months of engineering and drafting to plan a new bridge.

The President has recently unveiled an additional data set in his statistical analysis. This data set includes two records: Warren Buffet and his secretary. Apparently, Buffet pays a lower tax rate than his secretary. Therefore, Obama argues, the tax rate for the rich needs to increase. Let’s not mention that much of Buffet’s income is from capital gains. Let’s also conceal any charitable contributions that Buffet made in order to lower his tax rate.

In order to perform a statistical analysis, one needs to gather a sample of data that is representative of the entire population. The more data one gets, the more accurate the sample will represent the thoughts of the population (assuming that random sampling is used). Typically, 1000 to 1500 records are used in statistical analyses, resulting in a very accurate result. Obama has taken three records in his sample, and those records are not representative of the whole. The President should instead use reason and look at past policies that resulted in increased job growth in the private sector. Even better, the President should just go back on vacation and enjoy his time in office–it is likely to end in just over a year.


  1. The data was retrieved from a retired Google employee from the following site: http://www.latimes.com/news/politics/la-pn-obama-town-hall-20110926,0,3495346.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fnews%2Fpolitics+%28L.A.+Times+-+Politics%29&utm_content=Google+Feedfetcher


  • http://online.wsj.com/article/SB10001424053111903703604576588694049254486.html?mod=googlenews_wsj
  • http://www.reuters.com/article/2011/09/22/usa-debt-taxes-democrats-idUSS1E78L0YV20110922

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