Tuesday, September 9, 2008

Obama Takes on O'Reilly on Taxes

I think Obama acquits himself quite well in the second part of his interview with O'Reilly. This part of the interview concerned taxes and the economy. Everything Obama says is spot on. O'Reilly makes two major distortions.

First, he says that federal revenue during the Bush years has been 20% higher than during the Clinton years. There are two problems with this. Number one, it's false. By my quick calculations using CBO historical budget data, put in real 2007 terms using the CPI from the BLS, average federal revenues under Bush have been only 12.5% higher than under Clinton. But more importantly, it's a stupid comparison. Revenues usually increase as the size of the economy increases, which happens all the time, except during recession. Revenues under Clinton were 43% higher than under Reagan. I look forward to hearing O'Reilly say this was due to Clinton's brilliant economic policy.

Without question, the economy performed far better under Clinton than it has under Bush. No amount of right-wing spin can change that fact. See this post, which includes a review of Clinton vs. Bush on the economy.

Second, O'Reilly says that wages have gone up during the Bush years. I won't check his exact figures, but he must be using using average wages (and I suspect it's actually income, not wages.) The problem with the average is that it includes people at the very top whose incomes have increased a lot, e.g. Halliburton executives. Thus, the average can increase even as incomes decrease for most Americans. For this reason, it's generally better to look at median incomes. The median is the value for which half the population makes more and half the population makes less. As noted in this post, real median income has fallen under Bush by $1000, after growing during the Clinton years by $6000.


Erik said...

Um... why did you compare Bush to Clinton... and then Clinton to Reagan?

Last time I checked, Reagan was not before Clinton.

Anonymous said...

What planet are you from? Obviously we've got to invest in education in this country, SERIOUSLY.