Milwaukee Journal Sentinel

Johnson cherry-picks data on economy

- Mica Soellner

Republican­s love praising the Trump economy. With one of the lowest unemployme­nt rates in years and steady job growth, there’s a lot to boast about.

But just how well does the Trump administra­tion’s overall economic performanc­e compare to his predecesso­r Barack Obama? And how has the business climate fared under the two presidents?

Here’s what U.S. Sen. Ron Johnson, R-Wis., claimed in a July 15 tweet:

“Republican policies have led to business investment growth that’s 10 times faster than what we saw under President Obama.”

The numbers don’t lie, he says. But how exactly is he measuring them?

Although the tweet is a bit old, the issue will be an important one in the coming election, so we decided to take a look.

The data

To come to his conclusion, Johnson’s staff told us he used data from the Bureau of Economic Analysis, an agency within the U.S. Department of Commerce that measures economic growth.

Johnson pointed to statistics measuring “private fixed investment, nonresiden­tial” which show how much businesses invest in structures, equipment and intellectu­al property, such as software and research and developmen­t.

Johnson broadly said growth has been 10 times faster under Trump than Obama in his tweet. Those who read it would presumably think it took in Obama’s entire eight-year tenure.

But in the data Johnson used, he only compared the final two years of the Obama administra­tion, 2015 and 2016, to a little over the first two years of data for the Trump administra­tion. That approach often signals cherry-picking.

Let’s dig deeper.

“We use the final two years of the Obama administra­tion for comparison because it constitute­s a comparable length of time with the two years of data for the Trump administra­tion,” said Ben Voelkel, a spokesman for Johnson. “It is a time adjacent to, rather than remote from, the Trump years.”

According to Johnson’s data points, Obama had an average of 0.6% growth in that period, compared to 6.4% under Trump.

The Bureau of Economic Analysis updated the data shortly after Johnson made the statement. In doing so, figures for some of the quarters were slightly adjusted, but the overall trend was largely the same.

The new numbers showed between 2015 and 2016, the Obama administra­tion had an average business investment growth of 0.7%. Meanwhile, between 2017 and 2018 (and the first quarter of 2019), the Trump administra­tion had a growth of about 5.5%.

That’s not far off from the original numbers, though quite not as strong.

The full picture

Of course, Obama’s term did not start in 2015. Under the full eight years of the Obama administra­tion, the rate of business investment growth was about 3.7%. When bringing Trump’s term to the overall latest numbers, overall growth has been about 4.9%.

So, looking at all of Obama’s tenure, the numbers are much more comparable.

What about the beginning of Obama’s term. How does it compare to the beginning of Trump’s term?

In Obama’s first two years plus an additional quarter, the period cited by Johnson, the business investment rate actually declined by 0.3%. This was the period immediatel­y after the Great Recession.

That underscore­s the volatility of the numbers and how the time frame you pick can make a major difference.

Other measures, other factors

There are other ways to examine business growth, and another part of the claim to consider: Johnson asserts the growth was caused by GOP policies.

Tara Sinclair, an economics professor at George Washington University, said average growth rates for business investment look stronger in recent years, but when measured as a share of Gross Domestic Product the picture is very similar under both administra­tions.

Why? The nation’s GDP, a convention­al measure of the size of the economy, has also grown over time.

“The share of GDP going to ‘private fixed investment, nonresiden­tial’ is below the peaks seen in the 1980s and 2000s,” Sinclair said in an email to PolitiFact Wisconsin.

Sinclair said GOP policies that cut regulation­s may have helped lead to stronger business investment under the Trump administra­tion, but it’s hard to blame or credit a presidenti­al administra­tion for most economic outcomes.

Indeed, as we have noted time and again in fact checks, experts say it is wrong to attribute too much to individual­s or particular policy changes. There are simply too many factors in the economy to boil it down to one.

“As you can see from the data, the quarterly growth rates are quite volatile, so more data to identify a clear trend will be helpful,” Sinclair told us.

Our rating

Johnson said “Republican policies have led to business investment growth that’s 10 times faster than what we saw under President Obama.”

That language may leave the reader thinking the comparison is to Obama’s full term. Johnson, though, said he was only comparing the first two years of Trump to the last two years of Obama. By that measure, there’s an element of truth here.

But that element is undermined by the broader picture: When you look at all of Obama’s tenure and other measures, such as share of GDP, the picture is much closer to even between the two.

In addition, Johnson over-attributes the cause of recent growth to GOP policies, when there are many other factors at work.

Our definition for Mostly False is “The statement contains an element of truth but ignores critical facts that would give a different impression.” That fits here.

Newspapers in English

Newspapers from United States