August 16, 2017

Paul Ryan’s Bullshit About Bankruptcy Data

Bankruptcy Filings & CreditThe philosopher Harry Frankfurt famously published his book, On Bullshit, where he distinguished lying (intentional disregard of truth) from bullshit (apathy as to the truth). Frankfurt argued that bullshit harms public discourse more than lying. Liars at least acknowledge the truth matters, although consciously choose to disregard it, but the bullshit artist displays a contempt for facts. To the bullshitter, facts are irrelevant.

Yesterday, Paul Ryan and his campaign put themselves firmly in the bullshit category, at least when it comes to bankruptcy statistics. Ryan said:

In 1980 under Jimmy Carter, 330,000 businesses filed for bankruptcy. Last year, under President Obama’s failed leadership, 1.4
million businesses filed for bankruptcy.

Both the New York Times and ABC News noted several problems with Ryan's statement. Most notably, Ryan conflated the total number of bankruptcies with the number of business bankruptcies. When ABC News called out Ryan for his misstatement, an official Ryan spokesman pulled out another doozy:

He obviously misspoke, but it’s still an apples to apples comparison. The point remains: bankruptcies are
up dramatically under President Obama compared to the Carter years.

The Ryan campaign apparently wants to stand by this point.

If the standard is how many bankruptcies occurred under a president's watch, then the worst president in U.S. history is George W. Bush because a record 2.1 million bankruptcies occurred in 2005 under his watch. In addition, the daily bankruptcy filing rate steadily rose from 2006 until the day Bush left office. By his own standard, Ryan also must admire the success of FDR's first year in office — the New Deal, the first 100 days and all that — because bankruptcies declined 11.1% from 1932 to 1933. If you ignore changing laws, changing economic conditions, and population growth, you can find lots of interesting patterns in the bankruptcy statistics to support pretty much whatever political position you prefer.

One has to be dumber than a rock to think that the absolute number of bankruptcies is an indicator of the president's job performance. He may be many things, but Paul Ryan is not dumber than a rock. A moment's reflection would have told Ryan and his campaign that the bankruptcy numbers they were spewing told us nothing about Obama's job performance. It is difficult to imagine any explanation other than the fact that the Ryan campaign simply did not care. It was just bullshit as Harry Frankfort has labeled it.

Bankruptcy filings have increased hand-in-hand with the amount of debt American households have. The graph at the top of this post shows population-adjusted and inflation-adjusted figures for bankruptcy filings and household debt (defined as the total of consumer credit and home mortgages). The trend has been happening for over 65 years, so there is plenty of blame to go around. If we want to have serious conversations about what rising bankruptcy filing rates mean, we have to discuss what that means for household borrowing. But, we apparently have a political climate where anything but serious conversations will occur.

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