Goofy Economic Data and Politics Go Hand-In-Hand: A Case Study from Escondido, California

Wonder Where the Numbers Come From?

Wonder Where the Numbers Come From?

Real economic information has always been a casualty of electioneering.  Since campaign loony tunes have been  put on steroids by Tea Party style dialogue, it’s even worse,  if that’s imaginable.   I offer a little case study here from the City of Escondido, near San Diego, where I live. which illustrates the problem.   This case has some humorous features that should alleviate the inclination to cry or pound the table.  It has its counterparts in most of the U.S. Senate and Governor’s races we follow across the country.

“Everyone is entitled to his own opinion, but not to his own facts,” said the late Senator Daniel Patrick Moynihan, about American political campaigning.

The Mayor of Escondido has either never heard this wise and oft quoted remark, or doesn’t agree with it, especially as it applies to the local economy. The Mayor, or his publicists, have indeed brought new manufacturing to Escondido (as he claims) – the manufacture of numbers about the City’s economy during his tenure.

These numbers are either lies, sloppily concocted because its too much effort to get them right,  or just picked out of thin air because they have a nice ring to them. It’s more likely one of the latter two, than outright lying, because some of the “facts” (amusingly) subvert the Mayor’s case.  The examples are from the Mayor’s stump speeches and campaign mailers blanketing the City.

In a recent campaign mailer, the Mayor says he “created over one thousand new jobs” and “attracted $200 million in investments to Escondido.”  There is a footnote cited for this information that leads to a blog by a local chiropractor. I guess this was considered a better source of information than the U.S. Census or the Bureau or of Labor Statistics. That’s what happens when Tea Party style rhetoric and paranoia relentlessly defame trustworthy organizations.  We ignore them and turn to chiropractors to tell us about the economy.

Let’s start with the number about job gains. The most ludicrous and supremely ironic aspect of the “1000 new jobs” claim is that if it was accurate, it would be evidence the Mayor presided over a new recession in Escondido, on top of the U.S. led downturn that officially began in 2008, and ended about two years later, around the time the Mayor took office.

Based on good data from the U.S. Census Bureau, the City of Escondido has averaged about 50,000 jobs (private and public combined) since the Mayor took office.  That’s a rough and conservative estimate, because, it is exceptionally difficult to come up with accurate and recent employment numbers for a relatively small-sized city like Escondido.   (Hence the proclivity to make things up).  But 50,000 is a good order of magnitude figure for evaluating the Mayor’s claim.

If the Mayor really did “create” 1000 new jobs over the last four years, as the mailer says, that would mean job growth in the City was less than half a percentage point per year, which wouldn’t have even kept up with population growth.  That translates into a double-dip recession, the second one right here in Escondido.

Then you have the claim about attracting $200 million investment in Escondido. That, on its face, is not an implausible number. But, again, there’s the problem that accurate and recent business investment numbers are exceptionally difficult to come by, even for a state or major metropolitan area, let alone a city the size of Escondido.

So, did the Mayor use money from his campaign war chest to hire a consultant to do massive data mining and econometric acrobatics?  Like Nate Silver?  Did he prevail on a City staffer to use (real and more timely) tax information to infer the investment number?  If so, that might have been an inappropriate use of city resources). More likely, it was pulled out of thin air or computed on the back of an envelope or borrowed by a publicist from another blog that had nothing to do with business investment, who, in turn,  got it from another blog, neither one vetted by anybody.    (But it was in print).

The most perplexing aspect of the $200 million investment number is that, if true, it would, just like the jobs figure,  be no better — and in fact, actually proportionately smaller — than new business investment in the U.S. over the same period of time (for which we have good numbers).

So, again,  the Mayor’s flyer, with much irony, proclaims he presided over business investments that were proportionately smaller than in the U.S. economy, which the Mayor has said is drastically mismanaged by President Obama.  BTW, in that same speech he said Escondido had created more jobs in a couple of years than the President did in two terms.   More goofy economics.

In case anyone thinks I’m pulling numbers out of thin air, here, quickly, is how I conclude the Mayor’s $200 million business investment claim is saying Escondido performed more poorly under his leadership than the U.S. did under Obama.  (You can skip the nerdy details in  the next paragraph).

We have good numbers on U.S. business investment during the Mayor’s tenure (about $700 billion) and we know that Escondido is about .033% of the U.S. economy.   So, if Escondido performed as well as the U.S. (which the Mayor says performed abysmally), it would have attracted at least $230 million in business investment.   Even the “misguided economic policies” of the President, as the Mayor sees them,  outdid the Mayor’s policies, as his own mailer (effectively) reports.  If you want to do the math yourself,  two places to  look are here and here, or contact the blogger,

The most absurd aspect of the Mayor’s economic numbers, is when you combine the 1000 new jobs claim with the $200 million new investment boast, it turns out City business people are investing $200,000 per job. Wow!  You can get a PhD from M.I.T for less than that. The Obama 2009-10 U.S. “stimulus package” was, ironically, lampooned by opponents for costing about $200,000 per job (which wasn’t even true).

Does the Mayor think all those smart business people at the local Chamber of Commerce, some of them on the City Council, are investing that kind of money per job?
For the U.S., good studies have shown that, in general, a million dollars of investment translates into about 20 jobs, which pencils out to $50,000 per job. So, unless the 1000 new jobs the Mayor’s mailer says he created included a bunch of workers doing high tech, hydraulic fracking along the Escondido Creek, a $200,000 investment per job, would not be very smart business,

Business people in Escondido are thankfully a lot smarter than that. They also have a lot more on the ball than the consultants or publicists that gave the Mayor those numbers.  Or maybe the Mayor does the math himself?

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2 thoughts on “Goofy Economic Data and Politics Go Hand-In-Hand: A Case Study from Escondido, California

  1. KURT

    Escondido’s Mayor and Hole In The Wall Gang are likely to be sustained. North County Inland San Diego is a backwater Republican-partisan auto-think culture, and likely to stay that way for awhile.

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    1. Irv Lefberg Post author

      Thanks for comment , Kurt. I think Escondido, with the right leadership, could be a model for how a diverse community could work economically and socially. It’s unfortunate that R party here has been hijacked by tea party mentality. That combined with paucity of mass, useful, constructive news coverage of city affairs, results in the condition you describe. The voters have a chance to change that. Olga is a moderate and pragmatist, but of course has been painted otherwise by the forces and factors we’ve both described.

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