Sunday, July 19, 2009

What do Google searches tell you about the economy?

If you're Larry Summers, they apparently tell you everything.

Summers, top economic advisor to the White House, recently said that the number of people searching Google for the term 'economic depression' is down. While that may be a fact, his conclusion is that it indicates consumer confidence is higher and that the "economic free-fall is ended."

I cannot conceive of anyone making such a ridiculous statement, except maybe Vice President Joe Biden.

Google searches are not an indicator of the economy, only of a person's interest in a particular subject. There is no empirical evidence to suggest that searches for a particular term indicate anything at all about consumer confidence.

One alternative, and just as likely, conclusion from the decline in Google searches is that people who were curious about the 'definition' have now found their answer and no longer need to search the term.

Another alternative and likely conclusion is that people no longer care about the definition because they know first-hand what the term means.

Still another: that people were curious about the difference between recession and depression and when one begins and the other ends.

In October 2007, I did a post 'Do they even know the definition of a recession in order to be polled?' CNN had done a poll asking if Americans believed we were in a recession and 'nearly half' said yes. In examining the title question, I found some definitions of 'recession.'

For about a year after that post, I was still getting hits on that post when people did a Google search on the term. The searches steadily declined over time, as expected. But I did not conclude that the recession had ended simply because the number of searches for the term had declined. That would have been absurd.

Now, I realize that Thurber's Thoughts is not Google, but the comparison is valid. In fact, here are the top 10 Google searches from yesterday:

1. tom watson wife
2. watch erin andrews peephole video
3. erin andrews peephole video download
4. hilary watson
5. hans reiser
6. erin andrews peephole video cache
7. erin andrews peephole video
8. tour de france stage 14
9. dirty sexy money
10. dan quinn

And from January 1, just for comparison:

1. reebok hockey
2. doobie brothers
3. svc inc
4. nittany lion
5. g commercial
6. taylor mays
7. der springer
8. penn state football roster
9. hgtv dream home
10. dick clark

In fact, the term 'depression' (and anything remotely similar) does not even appear in the top 100 for either of those days.

A look at the 2008 trends for a search on the word 'depression' also shows some alternatives to an impact on the economy. Other issues in the news which Google references for the search are two medical studies about depression with diabetes and in heart patients. There were two tropical depressions as well.

And if you do the same for the term 'recession,' you'll see that searches on that term are still high. Does that mean our 'recession' is not over?

Here's something rather interesting: In 2008, no one in Ohio searched for the term recession from February through about mid-September. Does that mean Ohio was not in economic difficulties during that time? I don't think so!

So what does all this mean? Only that the 'top economic advisor' to the White House is grasping at just about anything to show that the economy is turning around. The problem is that it isn't, really, and government actions are only making it worse.

However, when you've made the condition of the economy out to be the absolute worst ever as part of your political campaign, and then promised and implemented spending to solve the problem, only to find that your solution is making things worse than if you'd done nothing at all, you find yourself in a very difficult situation trying to explain exactly why all this is happening...and you can no longer blame your opponent.


James said...

Now if Summers and the Obama Administration can somehow figure out how to correlate the number of searches for the Erin Andrews peephole video on Google into a rationalization of how the economy is getting better.......

Maggie Thurber said...

James - I wondered about that, too...


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