The Truth Behind Simple Claims

During the Presidential campaign Barack Obama made a comment I did not fully believe was true. To summarize the president he stated he would decrease the unemployment rate by increasing our exports. He could have simply replaced "increasing our exports" with "creating more jobs at home". If he did, I might have bought the idea. Below is a series of screen shots I took. I decided to use GapMinder in order to explore the relationships between exports (% of GDP) Y-axis and unemployment rates (Age 25-54 as a %) X-axis. The Yellow is the United States, and the red is China. I was interested mainly in the USA but thought a comparison with a country that usually has high levels of exports would be interesting. The size of the bubbles refer to the total population of the country. 

The start of my data exploration begins in 1982.  Only the USA is present as no data existed for China.

Here we are 8 years, 1990. China is present in Red. Notice how at this point as Exports increase unemployment does in fact trend downwards. 

This is where the exploration became interesting! As time progressed to 2000, you can see the relationship between the variables is far more complex than previously seemed (see 1990 graph!). The United states unemployment rate seems to move between 4-8 with very little change in Exports. The trend line created by the China bubble (red dots) is anything but a clear relationship. Actually as Chinas exports fell, so did the unemployment!

The end point for this data exploration is 2005. Hopefully you can see the non-linear relationship between Exports and unemployment at this point (look at the red trend line!)

Hopefully by now you can understand my interest in Mr. Obamas statement. At first what seems like a reasonable, simple truth, is anything but. Boiling down our economy to the simple equation of Increasing Exports = Decreasing Unemployment, does not adequately describe the nature of our economy. I believe this statement was simply a means to garner votes, as it sounds completely reasonable at first. But a simple exploration into some free data shows a much more complex relationship. 

The data and analysis tools are Free material from www.gapminder.org