Thursday, January 28, 2010

A tale of two addresses

The website lets you use a page of text to make a "word cloud," in which words appear larger or smaller depending on how often they appear in the text. I decided to make word clouds out of Barack Obama's State of the Union Address last night, and of Ronald Reagan's Address from 1982. Both of these addresses occurred after the first year of each presidency, and both addresses took place during a recession.

Obama's word cloud:

Reagan's word cloud:
The differences between the two addresses are immediately obvious when seen in this format. The top three words in Reagan's address were "federal," "government," and "programs." It turns out that Reagan was talking about the need to reduce the size of government programs, and to distribute some of the federal responsibilities to the states in order to let them fine-tune various programs to their particular local needs.

By contrast, the largest words in Obama's word cloud are "people," "Americans," and "year" - rather generic words which don't illuminate any particular theme in the speech. The irony of course is that Obama has been trying to increase the size and number of government programs, as well as the power of the federal government, and he intends to continue doing so. Apparently he's decided that, in order to advance his agenda, it's best not to refer to federal government programs as "federal government programs."


Cathy said...

I'm thinking the emphatic presence of the word "people" signals his tack towards populism.

Gotta get the Bible/gun clingers in the government entitlements queue.

The Western Chauvinist said...

I'm surprised Obama's cloud doesn't show "invest" in big huge type. Because it isn't Government "SPENDING" doncha know? It is "INVESTING". We're "investing" in high-speed railroads in Florida and "investing" in people's college education (whether they're studying engineering or queer studies - we don't discriminate!). ACK!

linc campbell said...

Interesting experiment, but let's look at what happened in the seven years after Reagan's word cloud. And why not include the four under his successor, GHWB?

Disclosure: I don't care much for Reagan or Obama. Or any other politician since Nero, or before.

Here's another graph:

I know, I know. He said reduce the size of government programs, and ya know what? He may have. But he sure spent a hell of a lot of money. In fact he increased the deficit to levels not seem since the early 50s.

Oh sure, if we actually adjust those numbers for inflation, Reagan didn't spend as much as it appears he did in nominal dollars. True. But if you take the words from his first SoU address and extrapolate reality from it then you get a very illusory result.

It's kinda like that other big story from the 80s that turned out to be fiction: cold fusion.

vv said...

This is weird. I was making the same argument as linc campbell with an office colleague a few minutes ago pointing out the exact same image on wiki.

His argument was that the Reagan years added a total of 1.7 trillion over 8 years but the Obama admin added 1 trillion (the stimulus + interest on it) in 1 year. Also, that the Reagan spending was all defense related. It increased from 22% of the budget to 27% of the budget and ended in the Cold war victory which was worth it.

Trouble is.. that he also cut taxes at the same time increasing the debt. You would also be right to include HW Bush and the total debt added by the Reagan - Bush years goes to 3.1 trillion. About half of that number is defense related, remaining is the effect of tax cuts and recessions (82-82 and 91-92).
Tables 4.1 and 4.2

linc campbell said...


The idea that increasing spending on defense is ok while increasing spending on domestic issues is not ok is at best a specious argument based solely on the values of the individual making the judgment. At an objective level, spending is spending and Reagan increased it. At a second objective level, defense spending is what drives national debt. Here is a chart for US presidencies that shows that mandatory and domestic spending stays relatively flat and the driver is defense:

The untold story is that unfunded liabilities (future SS and Medicare costs) are not projected in here; it only shows actual spending. And if you don't like the Huffington Post, you can find the same info elsewhere. It's all sourced from the OMB.

The sad thing is that if we look back to the last four centuries, the things that drive the greatest economies to ruin are threefold: increasing debt spurred by increasing military spending (really a circular pattern) + reliance on a single major power source + increasing isolationism driven by fundamentalist religion. It happened in the 1600 Netherlands, 1700s Spain, 1800s UK and is now happening in the US. Kevin Phillips (ex-Republican strategist) has a number of books that go into this historical pattern.

Here is a critique of Regan by the ultra-Libertarian Mises institute, the hub of the Australian school of Economic theory.

It's also funny that you mention the reduction in taxes while increasing spending. GWB did the same. We hear a lot of criticism of tax and spend Democrats. Like it or not, that is a much more logical position (increase in taxes = increase in revenue which allows an increase in spending assuming we aren't creating a deficit, see Clinton)than what happened under Reagan and GWB: cut-taxes and increase spending. Both are betting on the cum by playing the far side of the Laffer curve.

If we adjust for inflation the dollars Reagan spent in his first year vs. Obama, Reagan spent more. Do the math if you like.

My issue is this: many people are criticizing Obama based on one emotional argument: they don't like him (bc he's a democrat, he's black, bc of his policies or some combo). But none of that has anything to do with the reality of what happens or how he is spending. You can't even judge a president based on the budget they present bc what they put out there and what actually happens are wildly different. And in truth it will be hard to judge Obama objectively on his spending: he inherited two wars so some of his spending has to be blamed on his predecessor.

The point is that until we get to the end of Obama's presidency there will be no objective way to measure him vs. Reagan or anyone else. But as a species we prefer to judge things emotionally.

I say let's apply the same objective, quantitative-in-fact methodology to political regimes that we do to any TA of the market. Let's separate our emotions from our ideas about policy (at least if our starting point is rooted in "sound fiscal policy") the same way we would like to remove our emotions from our investments.