Fact checking PolitiFact’s stock market numbers

PolitiFact the ideal source?“These numbers show that Webb is definitely right for the NASDAQ Composite (in fact, he underestimates a bit) and that he’s just about on target for the S&P 500 and the Wilshire 5000 if you round the figures upwards.”

—PolitiFact, from a March 17, 2015 fact check of former Democratic Senator Jim Webb



PolitiFact’s claim massages the facts by ignoring Webb’s cherry picking and by failing to adjust stock market increases for inflation.

The Facts

Former Senator Jim Webb (D, Va.) appeared as a guest on ABC’s This Week with George Stephanopoulos on March 17, 2015. Webb said the U.S. economy has changed in a way that shifts benefits to the wealthy:

STEPHANOPOULOS: Let’s talk about economics, as well. In that speech we showed, you also talked about, quote, “Powerful financial interests spending billions to elect people who think the current drift toward a permanent aristocracy is OK.”

So let’s do that a little bit.

Who are those interests and how are they encouraging a permanent aristocracy?

WEBB: Well, I think if you see what has been happening to our country over the past 20 or 25 years or so, with the economic model, first, the model itself has broken apart. The traditional model has broken apart. The employment model that was based on full-time employment, manufacturing-based, taking care of your working people, fell apart a lot — when the manufacturing sector itself was hurt so bad in the past 20 years.

But the other thing is what — you’re seeing the — if you have capital, if you have assets, you’re doing pretty well. The stock market has almost tripled since April of 2009.


PolitiFact places its fact checking focus squarely on Webb’s claim about the stock market, as we can see from the conclusion:

Webb said that “the stock market has almost tripled since April of 2009.” There are different ways to measure “the stock market.” For three of the four most common yardsticks, Webb is basically right; for the other one, he’s off base, but not dramatically so. And it’s worth noting that the period Webb chose maximizes the increase; a longer time horizon makes the gain more modest.

The statement is accurate but needs additional information, so we rate it Mostly True.


With the context set, we’ll evaluate PolitiFact’s approach to this fact check and see whether the mainstream fact checker made the right call on Webb’s claim the stock market nearly tripled.

Analyzing the Rhetoric

PolitiFact provides context enough to make clear Webb’s point, but with the focus on his stock market claim the underlying point about the “permanent aristocracy” gets left out of the assessment. That approach to fact checking can easily make a bad argument look good based on the truth of one part of the argument. A sharp rise in the stock market doesn’t necessarily have anything to do with the creation of a permanent upper class.

Setting aside Webb’s main point, did the stock market nearly triple?

The Power of Cherry Picking

When Webb claimed the stock market had nearly tripled, he used a very specific time frame, beginning with April 2009. April 2009 featured some of the lowest stock market index values from the Great Recession, though March 2009 was worse. Given the stock market’s performance in 2015, Webb ended up using an unusually low point and comparing that to a notably high point.

That’s cherry picking. The start and end points rig the percentage rise in the stock market. Remember, nothing in the assertion that the modern economy creates a permanent upper class necessitates Webb’s start and end points. The choice serves to make Webb’s chosen example sound impressive.

One of the experts PolitiFact consulted pointed out this problem very specifically:

Lawrence J. White, an economist at New York University’s Stern School of Business, warned that comparisons like Webb’s are sensitive to the choice of start and end dates, among other issues.

“For example, if one takes the Dow Jones Industrial Average and instead makes the comparison with its previous high in 2007, the increase is only 25 percent — not the more-than doubling that occurred from its low point in 2009,” he said. “And if one nets out inflation from that 25 percent increase, the ‘real’ increase in the stock market has been only about half of that increase.”


If the start and end points make the difference between a 25 percent increase and 300 percent increase then why doesn’t PolitiFact pay more attention to the cherry picking?

Inflation Adjustment

PolitiFact’s expert, Lawrence J. Wright, also pointed out that inflation could make a big difference in the change of stock market values over time. Wright’s advice went unheeded as PolitiFact produced a chart showing stock market increases without any adjustment for inflation:

PolitiFact stock market chart no inflation adjustment

PolitiFact performed three actions helpful to Webb. First, PolitiFact chose the lowest daily market value in April 2009, April 1, as the first point of comparison. Second, PolitiFact chose a date after the date of Webb’s statement as the second point of comparison. The stock market’s value was higher at the close of business on March 16, 2015 than it was during the week prior to Webb’s television appearance. Third, PolitiFact refrained from adjusting the 2015 figures for inflation.

In effect, PolitiFact fine-tuned Webb’s cherry picking.

PolitiFact concluded Webb’s claim was only wrong with respect to the Dow Jones Industrial Average, which by PolitiFact’s calculation only increased by 2.3 times over the April 1, 2009 baseline.

What would PolitiFact’s chart look like adjusted for inflation? Like this:

PF stock index chart inflation adjusted

After adjusting for inflation only the NASDAQ increase rounds up to three in accord with PolitiFact’s claim. PolitiFact’s claim that Webb underestimated the increase with respect to the NASDAQ index falls by the wayside, rendered false. The other three indices all fall below the 2.5 mark that would justify rounding up to three.

Expertise Shunned

We find it mystifying that PolitiFact would quote Wright’s misgivings and then ignore them in judging the accuracy of Webb’s claim. PolitiFact buries those problems in its summary, allowing only “It’s worth noting that the period Webb chose maximizes the increase; a longer time horizon makes the gain more modest.”

But the longer time horizon wasn’t Wright’s point. A shorter time horizon also makes the gain more modest. Webb chose start and end points that greatly magnified the gains a “permanent aristocracy” could derive from the stock market. It isn’t the span of time that makes Webb’s claim misleading. It’s the deliberate choice of a starting point where the stock market fell far below normal.


Even if PolitiFact didn’t enhance the deception in Webb’s numbers and neglect to adjust for inflation, the cherry-picked factoid would not support Webb’s claim that the U.S. economy supports a permanent aristocracy.

“These numbers show that Webb is definitely right for the NASDAQ Composite”

False statement icon Fallacy of Ambiguity icon

PolitiFact’s flawed numbers show nothing. PolitiFact should have adjusted for inflation and justified choosing April 1, 2009 as the baseline, given that Webb simply named the month of April from 2009 as his baseline. April 1 was the NASDAQ’s lowest close for the month of April. PolitiFact’s fact check was no better than a careless approximation, resulting in an ambiguity PolitiFact used to favor Webb’s claim.

Numbers adjusted for inflation would have supported Webb’s claim, but would not have saved his argument from a fatal fallacy.

“(in fact, he underestimates a bit)”

False statement icon

Adjusting the figures for inflation dispels PolitiFact’s illusion that Webb underestimated the rise of the stock market as measured by the NASDAQ.

“he’s just about on target for the S&P 500 and the Wilshire 5000 if you round the figures upwards.”

False statement icon

Webb’s phrasing was ambiguous enough for us to grant him the benefit of charitable interpretation. But PolitiFact bases its claim squarely on stock market numbers it failed to adjust for inflation. We see that clearly with PolitiFact’s admission that Webb was wrong about the Dow based on a 230 percent increase. If PolitiFact does not try to round 2.3 up to 3 for the Dow then we don’t see any justification for rounding up from 2.3 for the S&P 500 or for rounding up from 2.4 for the Wilshire 5000. After adjusting for inflation, Webb’s claim is false for three out of four of the stock market indices PolitiFact considered.

We also charge PolitiFact with dropping the context of Webb’s claim, namely his implicit claim that sharp gains in the stock market since April 2009 provide reasonable evidence that the U.S. economic system supports a permanent aristocracy. Webb’s evidence did not support his point, and PolitiFact should have mentioned the fact.

icon Out of Context



Jacobson, Louis. “James Webb Says Stock Market Has Tripled in Value since 2009.” PolitiFact.com. Tampa Bay Times, 17 Mar. 2015. Web. 25 Mar. 2015.

‘This Week’ Transcript: Sen. Roy Blunt.” ABC News. ABC News Network, 15 Mar. 2015. Web. 25 Mar. 2015.

Frank, Robert. “The Top Three Myths about Income Inequality.” CNBC. CNBC LLC, 28 Jan. 2014. Web. 25 Mar. 2015.

McBride, William. “Thomas Piketty’s False Depiction of Wealth in America.” Tax Foundation. Tax Foundation, 04 Aug. 2014. Web. 25 Mar. 2015.

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