The Barbour Boom: Litigation Effect or Katrina Effect?

Cactus has caught Stephen Moore lying to the readers of the Wall Street Journal again:

For most of the past 30 years, Mississippi has ranked as one of the poorest as well as one of the most litigious states. The two statistics are related … Shortly after winning election in 2003 by running on a tort-reform platform, Mr. Barbour stitched together a coalition of doctors, business groups, taxpayers and even unions to roll back the trial lawyer lobby … Almost overnight, the flow of lawsuits began to dry up and businesses started to trickle in … About 60,000 new jobs have arrived in four years – not a small number in a workforce of about 1.3 million – and a sharp improvement from the 30,000 jobs lost in the four years before Mr. Barbour took office … Thanks to Mr. Barbour, the state’s unemployment rate is down to about 6% from nearly 9%. Last year, Mississippi’s per capita income growth was 6.7%, third highest of the 50 states and well above the national average of 5.2%. Mississippi tort reform is making the poor richer

We have graphed both the state’s employment as well as its unemployment rate from January 1998 to March 2008 using this source. As far as the unemployment rate, we see a clear indication of a Katrina bounce, which has come and gone, but no evidence of any alleged litigation relief effect. We also see a Katrina effect, which came during Barbour’s tenure and has shift dissipated. Now it is true that during Bush’s first term in office, employment growth was negative in Mississippi but wasn’t it negative for most of the nation? Once one graphs the employment series and thinks about the effects of Katrina and that recession a few years back – it is hard to see anything of a litigation relief effect at all.

As far as the growth in per capita (nominal) income, Cactus would have us look at this source which states:

Louisiana grew 10.5 percent in 2007, down from 20.6 percent in 2006. These growth rates are substantially higher than any other state’s. The rental income component of Louisiana’s personal income was boosted in 2007 by $5.4 billion of Road Home subsidies from the U.S. Department of Housing and Urban Development (HUD). The subsidies are to persons whose homes had been destroyed or damaged by Hurricane Katrina. Mississippi, whose Homeowners’ Assistance Program was funded $1.5 billion by HUD, grew 7.4 percent in 2007 up from 6.0 percent in 2006.

Per capita income. U.S. per capita income grew 5.2 percent in 2007, down from 5.6 percent in 2006, but equal to the average of the last four years (2004-07). Louisiana’s per capita income was up 9.2 percent or $2,935. Much of the gain in Louisiana is accounted for by the Road Home subsidies which averaged nearly $1,250 per Louisiana resident. In Mississippi, housing subsidies added $530 to per capita income.

Additionally, the state’s per capita income in 2007 was only $28,845 which ranks it 50 out of 50 again. Could someone at the Wall Street Journal kindly suggest to Mr. Moore’s that such blatant abuse of the data to make a phony argument is not an appropriate thing for this business newspaper to do?