Philly Fed: They Do Have A Ranking of Economic Strength... And Wisconsin is #42 | WisCommunity

Philly Fed: They Do Have A Ranking of Economic Strength... And Wisconsin is #42

[img_assist|nid=472611|title=|desc=|link=none|align=left|width=231|height=300]The Philadelphia Federal Reserve Bank releases something every month called the ""  (CI), which they say "combines four state-level indicators to summarize current economic conditions in a single statistic."  

How does Wisconsin rank?  According to the most recent numbers, Wisconsin comes in at 42nd in the country.  In addition, despite obfuscation from the Walker administration and the WMC, since Walker took office, Wisconsin's rate of improvement in in this index (6.3%) is the lowest among our neighbors and far below the national average rate of improvement in the index:  7.8%.    

So... where is Walker and the WMC getting the "ranked second in the nation in economic growth" claim?

In some cases they're pointing to the Philly Fed's "Leading Index," which is a forecast of the rate of improvement of the CI over the next six months.  (The Philly Fed has forecasted that Wisconsin's CI rate of improvement will be the second best in the country over the next six months.)  In other cases they're pointing to Wisconsin's rate of improvement in the CI, from July to August, being the second best in the country.

But, alas, second best rate of improvement in the CI from July to August is simply not the same as "second in the nation in economic growth."  What's the difference? One is what Wisconsin is-- 42nd in economic growth-- and one is basically a measure of how fast Walker is putting down the pizza and jumping off the couch-- 2nd fastest in the country.

And even these rate of improvement numbers are less than they seem, mostly because Wisconsin was soooo low in their CI, rate of improvements are much easier to achieve.

For example, Colorado has a much higher CI than Wisconsin and improved from July to August by going form 182.8 to 183.8 or +1  Meanwhile Wisconsin improved their CI during the same time period by going from 142.7 to 143.4 or +.7.  Even though Colorado's overall CI rank is seventh in the country and they added more to their CI from July to August, using Walker's math, both of these states are the same in economic growth because the rate of improvement of Colorado and Wisconsin were both .51% and they are both supposedly tied for second.    

Another way to look at it is to think of Walker as marathon runner almost to the 3/4 mark in his term... err... race.  Out of the 50 runners, he's ran slower than his peers from neighboring states and slower than the overall average runner in the marathon and is, therefore, running with the back of the pack.  Walker suddenly starts to speed up. He's still running slower than the leaders of the the pack and he's still running with the back of the pack, but because he was going sooooo slow before, one could say that, at this point in time of the race, his rate of improvement is second best of all the runners.

Certainly, though, no reasonable person would call the back-of-the-pack "runner" in the above scenaro second best anything for having the second best rate of improvement of one small part of a long race.  

Published

October 1, 2013 - 2:39pm

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