Category Archive for: Press [Return to Main]

Oct 18, 2009

The Pundit's Dilemma

Mark Liberman at Language Log says the game theory can explain why pundits "best move always seems to be to take the low road":

...Overall, the promotion of interesting stories in preference to accurate ones is always in the immediate economic self-interest of the promoter. It's interesting stories, not accurate ones, that pump up ratings for Beck and Limbaugh. But it's also interesting stories that bring readers to The Huffington Post and to Maureen Dowd's column, and it's interesting stories that sell copies of Freakonomics and Super Freakonomics. In this respect, Levitt and Dubner are exactly like Beck and Limbaugh.

We might call this the Pundit's Dilemma — a game, like the Prisoner's Dilemma, in which the player's best move always seems to be to take the low road, and in which the aggregate welfare of the community always seems fated to fall. And this isn't just a game for pundits. Scientists face similar choices every day, in deciding whether to over-sell their results, or for that matter to manufacture results for optimal appeal.

In the end, scientists usually over-interpret only a little, and rarely cheat, because the penalties for being caught are extreme. As a result, in an iterated version of the game, it's generally better to play it fairly straight. Pundits (and regular journalists) also play an iterated version of this game — but empirical observation suggests that the penalties for many forms of bad behavior are too small and uncertain to have much effect. Certainly, the reputational effects of mere sensationalism and exaggeration seem to be negligible. ...

I think it's correct that the penalties pundits face for "many forms of bad behavior are too small and uncertain to have much effect," but I'm not sure that was always true to the extent it's true today. So the question to me is why the tolerance for this behavior has changed over time (has it changed?).

I'm not sure I know the answer to that, but I suspect it has something to do with increased competition among media companies for eyeballs and ears combined with profit incentives that cause information organizations to maximize something other than the output of credible information (maximizing profit may not be the same as maximizing the output of factual, useful information).

Though this type of behavior was always present in the media, it seems to have gotten much worse with the proliferation of cable channels and other media as information technology developed beyond the old fashioned antennas on roofs receiving analog signals. I don't want to go back to the days where we had an oligopolistic structure for the provision of news (especially on network TV), competitive markets are much better, but there seems to be a divergence between what is optimal for the firm and what is socially optimal.

Some people have argued that there are big externalities to good and bad reporting, and therefore that "some kind of tax credit scheme for non-entertainment news reporting might enhance societal efficiency and welfare." That might help to change incentives, but I'm not sure it solves the fundamental problem. There must be reputation effects that matter to the firm, some way of making the firms pay a cost for bad pundit behavior. But that is up to the public at large, people must reward good behavior and penalize bad, it is not something the government can control. I suppose we could try something like British libel laws to partially address this, but looking at the UK press does not convince me that this solves the problem.

So I don't know what the answer is. It drives me crazy that, for example, people invited to appear on CNN will say something that is an outright lie, and the person saying it clearly knows it is a lie or misrepresentation, but yet they get invited back anyway due to their entertainment value. Why isn't the rule that if you lie once on the air, you can never come back again? No matter what they say or how accurate they are, the line-up on the news, op-ed pages, etc., etc., is pretty much the same tired old group of people who have proven they will say controversial things that draw ratings. And that is what matters, never mind the accuracy.

The distressing part is that there doesn't seem to be a good way to change these incentives so long as the public continues to lend their eyeballs and ears to those who play this game.

Is there a solution?

Aug 18, 2009

Swiftboating Health Care Reform

The liars are winning:

...Majorities in the poll believe the plans would give health insurance coverage to illegal immigrants; would lead to a government takeover of the health system; and would use taxpayer dollars to pay for women to have abortions — all claims that nonpartisan fact-checkers say are untrue about the legislation that has emerged so far from Congress.

Forty-five percent think the reform proposals would allow the government to make decisions about when to stop providing medical care for the elderly. That also is untrue...

Do we blame ineffective messaging, effective liars, or an ineffective and complicit press? All bear responsibility, but it's not clear that even the best messaging effort can penetrate the cloud of disinformation and untruths that is allowed to persist so long as it is good for ratings. Tell lies to scare people, then when the other side howls, count on the press turning it into a circus that is more of a series of gotchas than anything resembling a debate or a search for the truth. The press needs to take a long, hard look at it's role in destroying public debate. But it won't.

"Odd WSJ Story on Vermont"

Tim Duy turns from Fed Watcher to Press Watcher. Will more regulation in mortgage markets lead to outcomes like Vermont's?:

Odd WSJ Story on Vermont, by Tim Duy: The Wall Street Journal has an odd piece on the Vermont mortgage market today. Odd in that the thesis appears to be completely unsupported by the rest of the piece. The story begins:

In plenty of other states, Andrea Todd would have been a homeowner years ago. Here, she bought just this month -- a difference that helps explain how Vermont avoided the housing bust, and shows the possible pitfalls in President Barack Obama's plan to tighten mortgage regulation…

...Vermont's strict mortgage-lending laws largely prevented the state's residents from signing the types of dubious home loans written in other markets across the country. Its 1990s legislation made mortgage lenders warn customers when their rates were relatively high, and put the brokers who arranged loans on the hook if their customers defaulted. Now, by at least one measure, the state has the lowest foreclosure rate in the U.S.

It came at a cost. The rules also kept some Vermonters like Ms. Todd from buying homes, keeping this rural corner of New England on the sidelines of the housing boom and the economic bonanza that came with it. Vermont's 10-year growth trails the national average.

The tenor of the article is that Vermont has overregulated the mortgage market preventing…wait for it…the unforgivable error of restricting loans to those who can prove an ability to repay. Worse yet, consumers receive explicit notice of high rates and brokers are held accountable:

In laws passed between 1996 and 1998, Vermont required lenders to tell consumers when their rates were substantially higher than competitors', with notices printed on "a colored sheet of paper, chartreuse or passion pink." And in what officials believe is the first state law of its kind, Vermont declared that mortgage brokers' fiduciary responsibility was to borrowers, not lenders. This left Vermont brokers partly on the hook for loans gone sour.

The insanity. The horror. Encourage personal responsibility? Hold people accountable for their behavior? Unthinkable. While of course such policies would limit defaults, the economic consequences would be disastrous:

Vermont's economy grew 60% in the 10 years ending in 2008, just behind the 63% rate nationally, according to the Commerce Department. Vermont lagged Arizona, Nevada and California over the decade but outpaced most of its New England neighbors.

That's right, Vermont's growth trails the national average by an astounding 3 percentage points over a decade. They truly missed the economic boom. Why surely Vermont would have outpaced Arizona had it not been for the stunningly tight mortgage markets. The snow didn't have anything to do with it.

Of course, homeownership rates in Vermont are dismal. A state of renters, virtual serfs in this medieval land. The author forges bravely ahead:

Vermonters didn't see the same sharp rise in home ownership that swept much of America in recent decades, which, despite the bust, buoyed economic growth. And while part of the increase in U.S. home ownership reflected excesses in lending and borrowing, some of it represented real progress in the form of more Americans achieving the cherished goal of getting -- and keeping -- a home of their own. By 2007, the percentage of owner-occupied households as a whole reached 68.1%, up from 63.9% in 1990, according to U.S. Census data. Vermont started at a higher base but saw ownership rise just 1.1 percentage points in that span, to 73.7%.

The according to the article, the "pitfalls" amount to: Informed consumers, fewer foreclosures, healthier banks, higher rates of homeownership, and virtually no impact on average growth. Those are some "pitfalls" - truly, greater consumer financial protection would spell ruin for us all.

Aug 13, 2009

"The GOP's Misplaced Rage"

Bruce Bartlett argues that conservative anger is misplaced, it ought to be directed at George Bush rather than the current administration. That may be, but I don't blame conservatives for trying to hang our problems on the Obama administration. If they can get away with it, why not? I suppose you could argue that displacing the blame delays adjustments the GOP needs to make, the argument below is that conservatives will not reestablish credibility until they begin holding Republican Party memebers publicly accountable for transgressions of conservative ideals. I'll let conservatives figure out what is best for their own party, public blame of themselves or public blame of the current administration, my concern is that they can falsely blame the current administration and make questionable assertions without getting called on it in the media. It doesn't hurt your credibility to say false or misleading things about the Obama administration if there is no accountability for it from the major media (who instead seem to fan the flames of outrage irrespective of the underlying truth in their attempt to grab viewers). If the media carries the message without effective rebuttal, why not make outrageous claims?:

The GOP's Misplaced Rage, by Bruce Bartlett: ...Does anyone believe the economy would be growing faster or that unemployment would be lower today if John McCain had won the election? I know of no economist who holds that view. The economy is like an ocean liner that turns only very slowly. The gross domestic product and the level of employment would be pretty much the same today under any conceivable set of policies enacted since Barack Obama’s inauguration. ...
I think conservative anger is misplaced. To a large extent, Obama is only cleaning up messes created by Bush. ... Conservative protesters should remember that the recession, which led to so many of the policies they oppose, is almost entirely the result of Bush’s policies. According to the National Bureau of Economic Research, the recession began in December 2007—long before Obama was even nominated. ...
[T]he extremely poor economic performance of the Bush years really set the stage for the current recession. This is apparent when we compare Bush’s two terms to Bill Clinton’s eight years. ...
Throughout the Bush years, many conservative economists ... extravagantly extolled Bush’s economic policies. As late as December 21, 2007, after the recession already began, he wrote in National Review: “the Goldilocks economy is outperforming all expectations.” In a column on May 2, 2008, almost six months into the recession, Kudlow praised Bush for having prevented a recession.
But the truth was always that the economy performed very, very badly under Bush, and the best efforts of his cheerleaders cannot change that fact because the data don’t lie. Consider these comparisons between Bush and Clinton... [list of comparisons] ...
Conservatives delude themselves that the Bush tax cuts worked and that the best medicine for America’s economic woes is more tax cuts; at a minimum, any tax increase would be economic poison. They forget that Ronald Reagan worked hard to pass one of the largest tax increases in American history in September 1982 ... even though the nation was still in a recession that didn’t end until November of that year. Indeed, one could easily argue that the enactment of that legislation was a critical prerequisite to recovery because it led to a decline in interest rates. The same could be said of Clinton’s 1993 tax increase, which many conservatives predicted would cause a recession but led to one of the biggest economic booms in history.
According to the CBO, federal taxes will amount to just 15.5 percent of GDP this year. That’s 2.2 percent of GDP less than last year, 3.3 percent less than in 2007, and 1.8 percent less than the lowest percentage recorded during the Reagan years. If conservatives really believe their own rhetoric, they should be congratulating Obama for being one of the greatest tax cutters in history.
Conservatives will respond that some tax cuts are good while others are not. ... According to the supply-side view, temporary tax cuts and tax credits are economically valueless. Only permanent cuts in marginal tax rates will significantly raise growth.
On this basis, we see that Bush’s tax cuts were pretty much the opposite of what supply-side economics would recommend. The vast bulk of his tax cuts involved tax rebates—which failed in 2001 and again in 2008, because the vast bulk of the money was saved—or tax credits that had no incentive effects. While marginal rates were cut slightly—the top rate fell from 39.6 percent to 35 percent—it was phased in slowly and never made permanent. Neither were Bush’s cuts in capital gains and dividend taxes.
I could go on to discuss other Bush mistakes that had negative economic consequences, such as ... starting unnecessary wars in Iraq and Afghanistan, which will burden the economy for decades... But there is yet another dimension to Bush’s failures—the things he didn’t do. In this category I would put a health-care overhaul.
Budget experts have known for years that Medicare was on an unsustainable financial path. ... In 2003, the Bush administration repeatedly lied about the cost of the drug benefit to get it passed, and Bush himself heavily pressured reluctant conservatives to vote for the program.
Because reforming Medicare is an important part of getting health costs under control generally, Bush could have used the opportunity to develop a comprehensive health-reform plan. By not doing so, he left his party with nothing to offer as an alternative to the Obama plan. Instead, Republicans have opposed Obama's initiative while proposing nothing themselves.
In my opinion, conservative activists, who seem to believe that the louder they shout the more correct their beliefs must be, are less angry about Obama’s policies than they are about having lost the White House in 2008. They are primarily Republican Party hacks trying to overturn the election results, not representatives of a true grassroots revolt against liberal policies. ...
Until conservatives once again hold Republicans to the same standard they hold Democrats, they will have no credibility and deserve no respect. They can start building some by admitting to themselves that Bush caused many of the problems they are protesting.

I think he's right that the real anger is about losing the White House, but they only have themselves to blame for that. They do need to recognize this, it wasn't Democrats acting like they are acting that caused the downfall, it was their own choices. But that doesn't mean they can't be effective in tearing down the current administration in the face of a complacent and enabling media that refuses to analyze and report on the veracity of the claims and the true underlying causes of the anger from the right.

Aug 12, 2009

Breaking the CNN Habit

I just noticed Ben Stein on CNN talking about health care reform. There had to be a better choice.

Lou Dobbs is still on CNN. I thought he should have been shown the door long ago, way before his latest antics.

I turn it on out of habit, but CNN has been going downhill for some time now, and it's time for that habit to change.

Jun 15, 2009

Why Op-Eds?

Here's something I've been wondering. Now that we have blogs and the internet, why do high ranking government officials - Timothy Geithner and Larry Summers today in the Washington Post, or Peter Orszag in the Financial Times for example - publish op-eds behind paywalls?

Why should people be forced to pay to hear read important policy discussions? Doesn't that exclude a lot of people from participating in the discourse? Even if the policy discussions aren't behind paywalls, other papers don't reprint the remarks in full, at least hardly ever, so the distribution is still limited.

When, say, the president wants to say something, why publish it on the op-ed pages of the New York Times, the Washington Post, the Wall Street Journal, the Financial Times, etc.? Why not simply post it on the White House web site, and make it absolutely clear that anyone who wants to can republish it in its entirety. Instead of one paper publishing the remarks, wouldn't they likely appear in several if not all major papers, or at least be discussed in some fashion, and wouldn't the remarks also be reprinted in local papers and in many blogs? Wouldn't a lot more people be able to read the discussion, and, in fact, wouldn't it be likely that a lot more people would read it?

So why do they still use the old model? Is it because the general public isn't the real target of these communications, or have I missed something essential? [Note: added a bit more in comments.]

Update: My daughter Amy is political consultant, and she helps politicians and others build support for their candidacy or for a particular side of an issue (and her dad thinks she is very good at it). She sends this along to straighten me out:

There are a few reasons for putting op-eds in Tier 1 newspapers:

1.  Having your op-ed in a newspaper that is well-established gives your point a seal of legitimacy.

2.  Once your op-ed is published, the goal is to move it around to bloggers, other reporters, etc. who will reprint it. But, being in “old media” gives your point gravitas.

3.  The audience is NEVER the general public, ever. Your audience is always opinion leaders, policy makers and lobbyists. Oh, and reporters who may be covering your issue.

4.  There is value to being able to use the masthead of the paper where your op-ed was published in campaign commercials, mailers, etc. You can only do that if it’s been published.

5. Not everyone is new media savvy.

That’s all.

Jun 12, 2009

Paul Krugman: The Big Hate

The conservative media and political establishment are aiding and abetting "the mainstreaming of right-wing extremism":

The Big Hate, by Paul Krugman, Commentary, NY Times: Back in April, there was a huge fuss over an internal report by the Department of Homeland Security warning that current conditions resemble those in the early 1990s — a time marked by an upsurge of right-wing extremism that culminated in the Oklahoma City bombing.

Conservatives were outraged. ... But with the murder of Dr. George Tiller by an anti-abortion fanatic, closely followed by a shooting by a white supremacist at the United States Holocaust Memorial Museum, the analysis looks prescient.

There is, however, one important thing that the D.H.S. report didn’t say: Today, as in the early years of the Clinton administration but to an even greater extent, right-wing extremism is being systematically fed by the conservative media and political establishment.

Now, for the most part, the likes of Fox News and the R.N.C. haven’t directly incited violence, despite Bill O’Reilly’s declarations that “some” called Dr. Tiller “Tiller the Baby Killer,” that he had “blood on his hands,” and that he was a “guy operating a death mill.” But they have gone out of their way to provide a platform for conspiracy theories and apocalyptic rhetoric, just as they did the last time a Democrat held the White House.

And at this point, whatever dividing line there was between mainstream conservatism and the black-helicopter crowd seems to have been virtually erased.

Exhibit A for the mainstreaming of right-wing extremism is Fox News’s new star, Glenn Beck...—... a commentator who, among other things, warned viewers that the Federal Emergency Management Agency might be building concentration camps as part of the Obama administration’s “totalitarian” agenda (although he eventually conceded that nothing of the kind was happening).

But let’s not neglect the print news media. ...The Washington Times ... saw fit to run an opinion piece declaring that President Obama “not only identifies with Muslims, but actually may still be one himself,” and that in any case he has “aligned himself” with the radical Muslim Brotherhood.

And then there’s Rush Limbaugh. ...[W]hen Mr. Limbaugh peddles conspiracy theories — suggesting, for example, that fears over swine flu were being hyped “to get people to respond to government orders” — that’s a case of the conservative media establishment joining hands with the lunatic fringe.

It’s not surprising, then, that politicians are doing the same thing. The R.N.C. says that “the Democratic Party is dedicated to restructuring American society along socialist ideals.” And when Jon Voight, the actor, told the audience at a Republican fund-raiser this week that the president is a “false prophet” and that “we and we alone are the right frame of mind to free this nation from this Obama oppression,” Mitch McConnell, the Senate minority leader, thanked him, saying that he “really enjoyed” the remarks.

Credit where credit is due. Some figures in the conservative media have refused to go along with the big hate... But this doesn’t change the broad picture ... that supposedly respectable news organizations and political figures are giving aid and comfort to dangerous extremism.

What will the consequences be? Nobody knows, of course, although the analysts at Homeland Security fretted that things may turn out even worse than in the 1990s — that thanks, in part, to the election of an African-American president, “the threat posed by lone wolves and small terrorist cells is more pronounced than in past years.”

And that’s a threat to take seriously. Yes, the worst terrorist attack in our history was perpetrated by a foreign conspiracy. But the second worst, the Oklahoma City bombing, was perpetrated by an all-American lunatic. Politicians and media organizations wind up such people at their, and our, peril.

May 23, 2009

The Decline of Merit Pay in Journalism

David Cay Johnston on the job market for journalists:

Welcome to the Jungle, by David Cay Johnston, CJR: Reporter Dan Browning’s piece on coming newsroom cuts at the St. Paul Pioneer-Press contains a curious detail that perhaps will encourage rigorous thinking in articles covering compensation. “The company said it wants… the elimination of merit pay….” Browning wrote... The term “merit pay” usually means that management rewards superior performance with superior compensation. ...

There is an adage among business owners ... that properly priced labor pays for itself. Workers whose pay equals their economic value-added receive just what they contribute and, in effect, cost the employer nothing. Those who are underpaid, however, damage profits through inefficiency, because when you underpay you attract less efficient workers. On the other end, those ... who are overpaid rob the owners of part of their profits.

So what does it say that Pioneer Press ... wants to stop rewarding superior performance with appropriately superior pay?

In theory, the best workers will go elsewhere. After all, the highest performers will be in demand and others will bid for their talent. The theory of market economics says that ... the quality of the labor ... will diminish, with appropriate damage to ... equity.

Continue reading "The Decline of Merit Pay in Journalism" »

Apr 27, 2009

Governor Schwarzenegger's Press Conference

Since I was issued a press pass for the conference, on a tip, I went to Governor Schwarzenegger's press conference on the swine flu outbreak. I was the only one taking pictures with an iPhone. For the most part, it was as expected, they are testing new flu cases, monitoring the borders in San Diego and Imperial counties (though he made it clear there are no travel restrictions, at least not yet - the Mexican border is a Federal issue in any case), and they gave hygiene tips (wash your hands!). There are currently seven cases in California, an eighth is suspected, and they are looking at a dozen additional cases. One of the doctors present noted that the CDC has created a seed virus and is ready to move forward to create a vaccine if needed (there are currently 5 million does of anti-viral medication out there - a combination of Tami flu and Relenza (sp?) - 25% will come to California, and they will be concentrated in the counties where there are outbreaks.

Gov2

But the news, I thought, was when he was asked to react to advice being given in Europe not to travel to America, California in particular. Instead of saying that wasn't necessary, that it was alarmist, he said that each country has to do what it thinks is best. He did not say the advice was bad, and he made a statement about how we cannot worry about the economic effects right now. That made me think he believes the problem is far bigger than what is reported above (otherwise, the probability of infection is minuscule, and the European advice isn't really needed). Even so, I'd guess he wishes he'd given a different answer.

Update: Bloomberg's version:

Avoid Travel to Mexico, U.S. Says as Outbreak of Flu Advances, by Tom Randall, April 27 (Bloomberg): Nonessential travel to Mexico should be avoided because of the outbreak of swine flu there that may be responsible for killing 100 people and sickening 1,000, U.S. health officials said.

A similar recommendation made by European officials against travel to the U.S., where 40 cases have been confirmed, is “premature,” said Richard Besser, acting head of the U.S. Centers for Disease Control and Prevention in Atlanta. None of the U.S. cases has been fatal, and the government is distributing swine flu information to people arriving in the U.S., he said.

Both the U.S. and European travel warnings may be influenced by politics more than science, said Margaret Chan, director-general of the World Health Organization in Geneva. WHO doesn’t recommend closing borders or restricting the movement of people or goods, Chan told leaders from United Nations agencies in a conference call today. The disease, also confirmed in Canada and Spain, has spread too far and would be impossible to contain by closing borders, she said.

“By definition, pandemic influenza will move around the world,” Chan said in the call today. “Does that mean we are going to close every country? Does that mean we are going to bring the world’s economy to a standstill?

“We know from past experience that transmission of influenza or the spread of new influenza disease would not be stopped by closing borders and would not be stopped by restricting movement of people or goods.” ...

Travel to Asia plunged during the 2002-2003 outbreak of severe acute respiratory disease, or SARS. ... “When we talk about travel advisories, we cannot think of the old days when we were dealing with SARS,” Chan said today. “It’s a totally different ballgame now.” ...

Health authorities in the U.S. recommended that nonessential travel to Mexico be avoided. The European Union also advised travelers to avoid areas affected by the outbreak. Australia, Japan, Singapore and South Korea are among countries screening travelers for fever, while Hong Kong raised its swine- flu response level to “serious” from “alert.”

When asked whether Europeans should avoid traveling to California, Arnold Schwarzenegger, the state’s governor, said: “That’s probably a wise decision.”

He said the risk of decreased tourism is outweighed by the importance of preventing the spread of the virus. ... 

Feb 28, 2009

Does the Media Deserve Liberal Defenders?

Should Democrats "ratchet down their hostility to newspapers and begin crusading on behalf of these imperiled organizations"?:

MSM, RIP, The Editors, The New Republic: ...Thirty-six percent of Americans now say that the press "hurts" democracy. Many others wouldn't express their feelings in ... such ... terms but share the basic disrespectful sentiment. Put another way, the crisis in journalism is even deeper than the crisis in its business model. It is suffering a crisis of legitimacy.

We all know the long list of scandals that has bloodied the profession--from Jayson Blair to Judith Miller to Dan Rather. But to focus only on these wrecks both misses the point and blames the victim. Just as the press has been slammed by the tides of technology, it has been hit hard by the political culture. The master narratives of both the right and the left have come to include the same villain: the hypocritical, biased elite media. And their combined grouching has helped foment the anti-media backlash.

On the right, the history of press-bashing is venerable... But during the Bush years, and thanks to Fox News, the critique of the liberal media was canonized...

A mirror version of this ... emerged on the left. In this telling, it was the timid, lazy press corps that failed to rigorously challenge the president's core (mendacious) claims about his tax cuts and rationale for heading to war. Very valid criticisms. But these specific objections morphed into populist broadsides against what the left came to describe as "the mainstream media"--avatars of establishmentarian groupthink who bend to the latest conventional wisdom emerging from D.C. cocktail parties and neurotically fret that they might be just as biased as their conservative critics allege. On The Huffington Post and its ilk, you would find rants about how "Beltway media really makes no effort to do anything other than parrot totally out-of-touch conventional wisdom--no matter how inane, stupid and ridiculous it is."

This rhetoric creates a poisonous atmosphere. By assaulting the credibility of the press, it destroys its authority in the culture, giving cover to politicians who would rather avoid dealing with reporters in the first place. ... When the administration needed to make its case, it took to the local press or Fox News, where it had no fear of probing questions.

At times, Obama has hinted that he will borrow from the Bush playbook and deal with the press only as he pleases, using new technology to vault over the old arbiters. Fortunately, that hasn't been his methodology in recent weeks... This is fortunate, because Obama is presiding over a turning-point moment in media history.

Obama can help set a tone for liberals, convincing them to ratchet down their hostility to newspapers and begin crusading on behalf of these imperiled organizations. The media deserves liberal critics, who hold it accountable. But it also deserves liberal defenders because a press working toward the ideal of objectivity is often the only means of blunting government or business run amok... Even the press's fiercest critics have been forced to acknowledge and fear its findings--an authority that will never exist in a world consisting entirely of partisan outlets. ...

Many venerable newspapers and magazines will close in the coming weeks and months; the ones that remain will be attenuated. But the old ideals embodied in these institutions must not be permitted to join the carnage.

When the press does its job well, it deserves defenders, and when it does a lousy job, it deserves being taken to task. The complaint seems to be that the criticism is without foundation, and there's some of that, but the fundamental problem is not, in my view, the people doing the criticizing, it's the media companies themselves. The argument also seems to treat "media" as something other than Fox News. I agree that the term journalism conjures up another image, as it should, but presently Fox News isn't clearly separate from other media outlets, far from it, and the commingling of all of these sources of information in the minds of the public is part of the problem. If journalists in the mainstream media want respect, they need to differentiate themselves from the "partisan outlets," including calling foul loudly and in no uncertain terms when Fox or whomever crosses the line, and they also need to do a better job themselves of establishing and maintaining their credibility through solid reporting.

Dec 02, 2008

"I Blame the Wine"

Tim Duy takes a wrong turn:

I Blame The Wine, by Tim Duy: Tonight I am ensconced in my preferred Portland hotel in anticipation of an early morning presentation. A good opportunity to work in the holiday-decorated lobby bar, listening to Christmas music while logging some quiet work hours throughout the evening.

How quickly, however, a quiet evening can become unsettled. A second glass of wine and an inadvertent click on a link brought me to Larry Kudlow’s webpage. Drawn in, not recognizing the danger, I clicked again and again, and landed in the Wall Street Journal’s op-ed section. The horror of a Peggy Noonan column greeted me:

One of the weirdest, most perceptually jarring things about the economic crisis is that everything looks the same. We are told every day and in every news venue that we are in Great Depression II, that we are in a crisis, a cataclysm, a meltdown, the credit crunch from hell, that we will lose millions of jobs, and that the great abundance is over and may never return. Three great investment banks have fallen while a fourth totters, and the Dow Jones Industrial Average has fallen 31% in six months. And yet when you free yourself from media and go outside for a walk, everything looks . . . the same.

Everyone is dressed the same. Everyone looks as comfortable as they did three years ago, at the height of prosperity. The mall is still there, and people are still walking into the stores and daydreaming with half-full carts in aisle 3. Everyone's still overweight... Nothing looks different.

It won’t be a real recession until we are all covered in nothing but rags. Still, look at the bright side – we will have finally cured the obesity epidemic. We may be poor, but at least we will be thin.

I hear this kind of commentary frequently: “Of course we are not in a real recession – look at all the cars at the mall!” Yes, people continue to shop – they shopped during the Great Depression as well. They even went to movies. Economies generally don’t spiral into oblivion. And on any given day, we generally don’t see “everyone.” Mall traffic is the worst of the anecdotal evidence. It tells you nothing about the composition of spending. Does Noonan know if the shopper has downgraded from Nordstrum’s to the Gap? Or if they purchased only one shirt when they normally would have purchased three? And what exactly does a sale of only one shirt imply for the firm’s business model?

It is simply much more complex than the number of cars at the mall. Noonan forges on:

In the Depression people sold apples on the street. They sold pencils. Angels with dirty faces wore coats too thin and short and shivered in line at the government surplus warehouse. There was the Dust Bowl, and the want of the cities. Captains of industry are said to have jumped from the skyscrapers of Wall Street. (Yes, those were the good old days. Just kidding!) People didn't have enough food.

Suicide is funny, right? And again with the food. Perhaps Noonan, so convinced that people are still eating, should have stopped by the Eugene Register Guard website this weekend:

Given the widespread and escalating economic hardship throughout Oregon and the nation, it’s no surprise to see it trickling down to schools.

The most easily quantifiable measure is the number of students signing up for free and reduced-price meals through the National School Lunch program. Though statewide numbers aren’t yet available, the number of children receiving subsidized meals in the Eugene district is up 8 percent over this time last year. In Bethel, Fern Ridge, Creswell and Springfield, it’s up by at least 10 percent.

“I think the biggest thing we noticed during registration this time was a lot more families moving in together to lower living expenses,” said Jim Crist, principal at Springfield’s Ridgeview Elementary School, which saw the percentage of students signed up for free or reduced meals swell from 31 percent last October to 43 percent this October.

Cafeteria manager Sharon Gregory said the change has been especially dramatic at breakfast, served before school for 95 cents for kids who pay in full.

Apparently more people don’t have enough food compared to this time last year. Just not the people Noonan associates with.

Noonan continues:

I asked an economic expert a few weeks ago if a second Great Depression would come to look at all like that, like a catastrophe, and he said no, not at all. In 1930 we had no safety net. Unemployment benefits, food stamps, welfare, an interlocking system of city, state and federal services—these things will keep it from being so bad.

Not a bad answer. But after acknowledging the benefits of a social safety net, Noonan then laments the potential widening of that same net:

But in tough times we will surely expand unemployment benefits, and welfare, and food stamps and housing assistance, which will mean more and greatly accelerated spending, which will mean bigger and steeper deficits, and higher taxes, with the one feeding on the other, which may mean an economic death spiral comparable to, say, Britain in the decades after World War II, its economy mired and held down by government control and demands. It continued more than a quarter century, until the change of economic thinking encapsulated in the phrase "the Thatcher years." Is that what this will be?

The safety net has so far prevented economic calamity but will cause an economic calamity if expanded. No thought given to the possibility that a safety net designed for a typical postwar business may be, and is likely, insufficient to cushion the blow from a deeper and longer recession. Just a quick leap from a 26 week extension of unemployment benefits to the crushing weight of socialism.

Noonan concludes that the recession is all in our heads:

So where is GDII happening? Right now mostly in conversations between wives and husbands, in families and among friends, about selling, about digging in, about layoffs, and not taking chances, and reduced income, and fear.

So the 11.8% of the workforce unemployed by the U-6 measure, or the 500k+ filing for unemployment insurance each week are not having conversations with their families about where the next rent payment or trip to the grocery store is coming from? Would Noonan be happier is that number was 15%?

You get the idea….

Nov 23, 2008

Does Not! Does Too!

The WSJ argues with itself:

The Fed Is Out of Ammunition - WSJ.com

Fed Has More Ammunition After Firing Rate-Cut Bullets - WSJ.com

Nov 07, 2008

"Communicating Economics"

This discussion from the Royal Economic Society newsletter is about "the role of economists in the media":

Communicating economics, RES Newsletter: ...[Romesh Vaitilingam]: You once said that one important role for economists is to inch forward public understanding. I wonder if you see a positive trend, say over the last ten years, in terms of the sophistication of public debate about serious policy questions.

[Evan Davis]: Yes I do – and inching forward is the right pace to describe it. I think it’s become accepted that economists probably have something sensible to say about transport policy, health policy, environmental policy. And in all these areas, you see economics talking – and rather more loudly here than in some other countries. This is the country with a congestion charge, which is an economist’s solution to the problem of urban congestion as opposed to madcap schemes based on number plates.

I think instinctively the British have come to respect microeconomics in a way that some other countries don’t – and that’s why we have a more economics-driven trade agenda, a better approach to transport policy and have taken a somewhat robust line on lots of other issues. And in macroeconomic policy, we have one of the most eminent economists in the country running the Bank of England.

RV: What about the role of economics in the particularly difficult economic circumstances we currently face?

ED: I think this episode is slightly embarrassing for economists, net. It’s not great for the profession that we’ve talked about trying to end the cycle of booms and busts and congratulated ourselves on the improved framework for policy, and yet we’ve allowed ourselves to have a nineteenth century-style bank run and a house price crash. Even if we’re not in the forecasting business, we ought to have been in the business of saying the current situation is unsustainable and various scenarios could play out badly.

In fairness, economists were pretty good at saying that there are global imbalances and the housing market might fall. And I don’t think you would necessarily expect economists to predict the particular nature of the crisis – that it would come out of sub-prime and lead to an overall credit crunch.

But the question we all have to ask ourselves – particularly those of us who’ve been in communication – is did we do enough to warn people that there could be a very bumpy patch? I’ve asked myself this a lot and I think the answer is we did try to tell people but we didn’t try hard enough. In particular, we failed to tell people that when times turn bad, lots of things can get bad simultaneously. One of the reasons we didn’t do enough is that there’s a mood pervading both the economics profession and the public at large that is only receptive to a particular message at a particular time and essentially blanks out anything that’s not consistent with that message. Only when the narrative changes, when this sort of the economic earthquake occurs, are we receptive to all the other news.

RV: Can economists provide the tools to get us out of these difficulties?

ED: I’m not sure it’s going to be economic answers as much as trying to foolproof the human systems that run these economic systems. There’s a very good TV programme called Air Crash Investigation, which analyses what went wrong in various plane disasters. In a surprisingly large number of cases, there’s a small human failing in a very sophisticated system. For example, one crash happened because the covers had been left on altitude indicators after some routine cleaning.

Now obviously the airplane engineers could say to themselves we need more sophisticated ways of making our planes failsafe. But equally, we need to ask what is the weakest link in these very sophisticated systems. If the cleaner can do something that is mission critical for the survival of the plane, you’d better think more about the human processes as well as the engineering issues. I think there are economic analogies here. For me, one of the most interesting things to come out of recent economic events is the degree to which you need to look at human factors as well as economic ones, and not always assume that there’s an economic model of rationality that underpins human behaviour. It might be that we’re evolving towards rationality, but in the meantime, we could allow ourselves a slightly faster pace of evolution if we study the human factors. ...

Oct 26, 2008

"Is The New York Times Giving Us a Bad Read?"

John Hempton has a question:

Is the New York Times giving us a bad read on the newspaper business?, by John Hempton: News Corp’s newspaper advert numbers are bad – but they are not catastrophic. ... The death of newspapers looked exaggerated if your benchmark was News Corp.

The WSJ is doing OK- not stellar – but OK. Murdoch clearly has plans to turn it (a) into a national paper, and (b) into the dominant paper in NYC. In that he is helped by the seeming failures of the New York Times.   

The New York Times is a paper I want to like, but in fact like less and less. It is falling into catastrophic disrepair and the stock price shows it.

The New York Times has become the poster boy for the demise of newspapers everywhere. Revenue and profitability is weak – and the paper looks doomed. Well is it possible – just possible – that the NYT editorial policies are giving us all a false read about the demise of papers? 

  • Why is it that the paper employs Ben Stein despite the regular and ludicrous columns so well criticised by Felix Salmon?
  • Does anybody still read Maureen Dowd? As far as I can tell the same incoherent column has been repeated for about a decade. (Maybe I am just insensitive to "gender issues"?) Is this worth a regular editorial column in what purports to be the world’s greatest paper?
  • Bob Herbert suits my liberal predisposition – but I don’t bother reading him because I learn little new or useful. He is too predictable. And he has been that predictable for fifteen years...
  • Friedman seems to know less about foreign affairs (outside Israel and Beirut) than I do. And I know very little. He has been spectacularly wrong quite often. Unlike Friedman though I know I know little about foreign affairs - he has a platform to show off his ignorance twice a week...
  • David Brooks is a poor replacement for the conservative William Safire. Safire wrote better – and more to the point I had little idea what he was going to say and sometimes I was forced by sheer power of argument to agree with him. David Brooks has never done that for me. Safire was a disingenous guy who twisted facts to suit his political views - but he was darn clever about how he did it...
  • In the editorial area all they have is the very clever Krugman. I agree with Krugman a good proprotion of the time - but I am forced to think. He drives conservatives to apoplexy for the same reasons that Safire drove liberals to apoplexy. He is too darn good. Unlike Safire he doesn't twist the facts - at least in my view. If only the paper could find five writers the standard of Krugman covering most political persuasons. But then it would need to sack the others!

And that is when I get to the editorial policy. Need I repeat that this was the paper that employed Jayson Blair (who just made it up with little consequence for the world) and Judith Miller (whose seemingly made up stories helped propel America to the Iraq war). 

The New York Times is failing... In the past the New York Times would be forgiven their failures – because there were few alternative sources of information. But now there are plenty… competition is rife.

Competition is seldom good for shareholders. It hurts well run businesses but competition has a knack of totally disposing of badly run businesses. Indeed that is the real charm of competition. 

I want to ask a question: how much of the awful results of the New York Times are because of the demise of newspapers generally – and how much are newspaper specific?  How would we know?  ...

Sep 07, 2008

"The Moral Content of Economic Terminology in the Popular Press"

The Good, the Bad, and the Divine:

Continue reading ""The Moral Content of Economic Terminology in the Popular Press"" »

Aug 27, 2008

"Unsmearing the Smear"

Free Exchange looks at a report on "How unscrupulous campaign strategists are taking advantage of a quirk in our brains – and what reporters can do to stop helping them":

Unsmearing the smear, Free Exchange, The Econmist: An interesting behavioural look at the world of political mud-slinging... It helpfully begins:

According to a recent Pew Research Center survey, Americans increasingly get their news from multiple sources. More than one-third use Internet-based sources such as Web sites, blogs, and even social networking sites. Only a minority rely entirely on traditional sources, including print, radio, television, and cable news. The survey did not include chain e-mail, which has fed rumors... This proliferation of sources creates competitive pressure on journalists to bend their standards in order to get a story quickly.

It's always good to see blogging given a clear edge over crazy, ungrammatical emails typed in multi-coloured fonts. The piece continues:

Our brains tend to remember facts that accord with our worldview, and discount statements that contradict it. ...

The human brain also does not save information permanently, as do computer drives and printed pages. Recent research suggests that every time the brain recalls a piece of information, it is "written" down again and often modified in the process. Along the way, the fact is gradually separated from its original context. For example, most people don't remember how they know that the capital of Massachusetts is Boston.

This is actually quite a serious point. Repetition in any context strengthens memory. Incredibly it also creates its own aura of credibility:

In another Stanford study, students were exposed repeatedly to the unsubstantiated claim that Coca-Cola is an effective paint thinner. Those who read the statement five times were nearly one-third more likely than those who read it only twice to attribute it to Consumer Reports (rather than the National Enquirer), giving it a gloss of credibility. Thus the classic opening line "I think I read somewhere," or even reference to a specific source, is often used to support falsehoods. Similarly, psychologist Daniel Gilbert and his colleagues have shown that if people are distracted from thinking critically, they default to automatically accepting statements as true.

A week or so ago, Mark Thoma responded to a piece on "Libertarian Paternalism" by noting that he didn't like feeling like he was being manipulated. It's interesting to me that even if we assume that journalists are impartial actors, there is an asymmetry in the presentation of information, since the smearers are presumably well aware of these findings and using them to their advantage. We are being manipulated.

So here is the question: should journalists actively study behavioural economics in an effort to adjust their coverage such that the effect of the coverage will be something closer to factual truth? Either the media aims to be deliberately manipulative in an effort to produce better content, or the media will abet the manipulations of others, by predictably being not manipulative. Which is preferable?

Let me add the following from the article as an example of how journalists might use this in their reports:

Continue reading ""Unsmearing the Smear"" »

Aug 22, 2008

"More Speculation about Those Oil Speculators"

A Washington Post article claiming that one firm, Vitrol, "at one point in July,... held 11 percent of all the oil contracts on the regulated New York Mercantile Exchange" reinforced the beliefs of those who claim that unregulated speculation is behind the recent swings in commodity prices.

Jim Hamilton throws cold water on this idea. He has other objections to the article, but here's the one relating to the 11 percent figure that has received so much attention:

More speculation about those oil speculators, econbrowser: I normally leave it to folks like Dean Baker to beat up on the press. But I can't resist shining a bright light on today's story about oil speculators in the Washington Post, which has also been discussed by Mark Thoma and Tyler Cowen. ...

What ... does [David Cho] dig up? The article continues:

Even more surprising to the commodities markets was the massive size of Vitol's portfolio-- at one point in July, the firm held 11 percent of all the oil contracts on the regulated New York Mercantile Exchange.

That does sound like a lot, though enough details are left out to make me wonder what is actually being claimed here. Surely Cho doesn't literally mean "all the oil contracts," i.e., light sweet, Brent, heating oil, gasoline, and so on. If light sweet alone, are we talking about just futures, or futures plus options? Or is Cho possibly referring just to one very specific contract, such as the August CL futures contract? And were these positions held outright by Vitol or purchased on behalf of its clients?

Cho gets more quantitative a few paragraphs down:

By June 6, for instance, Vitol had acquired a huge holding in oil contracts, betting prices would rise. The contracts were equal to 57.7 million barrels of oil-- about three times the amount the United States consumes daily.

Again I'd like to know if we're including options somehow in this number. But more importantly, the claim that you can compare the number of notional barrels of oil implied by a futures contract if it were held to settlement with the number of physical barrels that the U.S. consumes repeats the egregious error committed by Michael Masters in his Senate testimony this May. You can't compare the outstanding NYMEX open interest with U.S. daily petroleum consumption numbers directly because they are measured in different units. Open interest is a stock-- it is measured in number of outstanding contracts at a particular point in time. Consumption is a flow-- it is measured in barrels per unit of time. You can't measure how many barrels of oil the U.S. consumes without specifying a time unit. We consume about 20 million barrels per day, or 14,000 barrels per minute, or 7.3 billion barrels per year. With which of these 3 numbers are we supposed to compare 57 million? Fifty-seven million sounds like a lot more than 14,000, and a lot less than 7.3 billion. You can make 57 million sound as big or as small compared with U.S. consumption as you want, because there's an arbitrary time interval associated with consumption that is not associated with open interest. If you want the futures volume to sound big, you compare open interest with daily consumption, as Masters and Cho both do.

Cho was trying the best he could to convince us that unregulated speculation was the cause of this summer's spike in oil prices.

But instead he convinces me that he really couldn't find much of a case.

Aug 16, 2008

Of Corsi Lies

An editorial from the local paper on the new book smearing Obama with lies:

Return of the swift boater, Editorial, Register Guard: You’ve got to hand it to Jerome Corsi. Not only did he manage to debut in the No. 1 spot on The New York Times best-seller list with his book-length smear of Barack Obama, but he also has played the media like a Stradivarius.

Capitalizing on his success four years ago as a key figure in the swift boating of John Kerry, Corsi once again is capturing priceless political coverage that further propels book sales and keeps his grab bag of lies, innuendo and character assassination front and center in the presidential campaign. He has appeared on CNN’s “Larry King Live” and had major stories and editorials on his book published in dozens of leading U.S. and international newspapers.

Rarely does such obvious media manipulation succeed so effortlessly without promising exclusive photos of Brangelina’s new babies. We take the bait because we must. The media are obliged to vet the charges and countercharges that ping-pong through a presidential campaign.

As Obama has discovered painfully, deliberately repeated misinformation is difficult enough to combat with irrefutable evidence. Left unchallenged, it can undergo the Joseph Goebbels’ transformation — repeat a lie often enough and it becomes truth.

That’s why the Obama campaign wasted no time pushing back hard against Corsi’s book, “The Obama Nation,” a title that is a deliberate play on the word “abomination.”

Because of the virulent misinformation that has circulated on the Internet about Obama since his rapid rise to the top of the Democratic ticket, his campaign has developed a rumor-debunking Web page called “Fight the Smears.” On that page is a link to a 40-page rebuttal to Corsi’s 384-page book.

In addition, John Kerry’s political action committee has launched a new Web site called Truth Fights Back to “fight against the right-wing smear machine.” It devotes significant space to “making sure Jerome Corsi doesn’t get away with his lies unchallenged.”

Corsi shouldn’t get away with much of anything unchallenged. He’s a staff reporter for the hard-right World Net Daily, where the Web site features an item headlined “Astonishing photo claims: Dead Bigfoot stored on ice” and another that announces “Big Macs fund training for homosexual activists.”

Corsi is well-known for his intemperate remarks. He has referred to Arabs as “ragheads,” called Pope John Paul II senile and characterized Islam as “a worthless, dangerous Satanic religion.”

Continue reading "Of Corsi Lies" »

Jun 02, 2008

"His Readers are Now Dumber for His Efforts"

Brad DeLong is rightly critical of the editors of the New York Times opinion page for running articles that misinform readers. But it's worth noting that the editors at the Washington Post are doing the same thing. Witness this column today by Robert Samuelson. The main intent of the article is to bash environmentalists for proposing a cap-and-trade system, but there's no foundation to Samuelson's arguments, they're based upon an incorrect understanding of how these policies work. Here's Ryan Avent:

Robert Samuelson Drinks Deeply From the Cup of Stupid, The Bellows: Washington Post columnist Robert Samuelson has long impressed me as one of the most hackish economic columnists not associated with the Wall Street Journal and not named Ben Stein, but today’s piece on cap-and-trade is dismally, embarrassingly stupid. Its essential premise is that consumers and producers of energy don’t respond to price signals, something so incredibly, obviously wrong that even the dolt editors of the Post opinion section should have wondered what was up. Samuelson should be ashamed of himself.

Let’s go to the videotape:

Continue reading ""His Readers are Now Dumber for His Efforts"" »

May 30, 2008

Ending the Soft Ride for Mendacious Politicians

Paul Krugman, "a self-described pussycat":

Maverick loads gun for new round of shots, by Ben Naparstek, Business Day: Today, Paul Krugman doesn't seem like a maverick. A CNN poll in April found George Bush to be the least popular American president in modern history... But in the run-up to the Iraq invasion, Krugman was one of the few pundits in the mainstream media to unflinchingly attack Bush. Since beginning his twice-weekly column in The New York Times in January 2000, Krugman has relentlessly accused Bush of lying — about the motives behind cutting taxes for the rich and attempting to roll back social security, for example, and about weapons of mass destruction in Iraq.

After the September 11, 2001, attacks, newspapers and magazines of the liberal centre ricocheted to the right. As the Times, The Washington Post, New Yorker and New Republic fell obediently in line with the Bush Administration, Krugman's heretical columns made him a poster boy for the anti-war left and a hate figure to neocons. "I was largely alone on the major op-ed pages," says the mild-mannered 55-year-old Princeton economics professor. "We look back now at 2002 and say, 'Nothing really bad happened to people. We did not have a new era of McCarthyism'. But that was very far from clear at the time. It was pretty frightening." ...

In the fevered climate of post-9/11 America, his outspokenness attracted death threats. But Krugman, a self-described pussycat, ... never set out to fight political battles. "It has been a much less easy life than I expected to be leading at this point. I should be sitting around in well-stuffed armchairs reflecting upon my life's research work."

When The New York Times approached Krugman to write a column in 1999, he wrongly presumed it wouldn't be too time-consuming. The main burden would be financial — the newspaper's conflict of interest rules prohibited him from giving corporate talks, for which he commanded up to $50,000. With the American political scene calm and the economy booming, Krugman expected to write about business deals, the internet, and developing world financial crises. But the 2000 presidential election politicised him. "A funny thing was happening. The candidate of one major party was being blatantly dishonest in what he said — at that point about economics — and no one was calling him on it." Krugman argues that the media give a soft ride to mendacious politicians because journalists are trained to consider two sides of any issue.

"If Bush said that the world was flat, the headline on the news analysis would read 'Shape of Earth: Views Differ'," he said in 2000. In "The Great Unravelling..., Krugman explains why many people failed to grasp the radicalism of the Bush agenda: "People who have been accustomed to stability can't bring themselves to believe what is happening when faced with a revolutionary power, and are therefore ineffective in opposing it."

He understands why journalists feared speaking up. "There really has been, for the most part, no reward for having gotten in front of the story and reporting what was going on. On the contrary, people who got it right have been fired and there's no cost to having gotten it wrong. Most news outlets are owned by large corporations. The journalists may be mostly highly educated people from the north-east who tend to be liberal, but the ultimate decisions on the coverage are made by people who are, on the whole, Republicans."

Whereas most Times columnists are career reporters, Krugman's academic background means he was never socialised to follow the dominant media line. ... Krugman maintains his independence by leading the relatively secluded life of a university professor in New Jersey. ...

Even Krugman's admirers sometimes flinch at his savagery. "He steps over the top," says Stiglitz, a Nobel Prize-winning economist and close acquaintance of Krugman. [...read more...]

If the Democrats win this presidency this fall, it will be interesting to see how people react when he is writing about Democrats rather than Republicans (it already has been interesting). My view is that Krugman has been right when most everyone else was wrong, and, agree or disagree, he's earned the right to be heard.

Update: Free Exchange seems to have stumbled across the same article (it's from an Australian business publication) and comments here.

Update: Stephen Moore of the WSJ says:

A few weeks ago, I gave a talk about tax policy to a group of elderly people ... I reminded the audience that the estate tax is scheduled to fall from 45% today to zero in 2010, but then rise all the way up to 55% in 2011. I joked that what we have here is the "Throw Mama From the Train Tax."

Then:

Democrats are starting to wake up to the death-tax calamity

I'm afraid he has this wrong, he seems to just be waking up to this, but Krugman was all over this years ago - in 2001 - even using the same joke:

Reckonings; Bad Heir Day, by Paul Krugman, Commentary, NY Times, May 30, 2001: ...The Bush tax plan was always peculiar: in order to hide the true budget impact, its authors delayed many of the biggest tax cuts until late into the 10-year planning period; repeal of the estate tax, in particular, was put off to 2010. But even that left the books insufficiently cooked, so last week the conferees added a "sunset" clause, officially causing the whole bill to expire, and tax rates to bounce back to 2000 levels, at the beginning of 2011.

So in the law as now written, heirs to great wealth face the following situation: If your ailing mother passes away on Dec. 30, 2010, you inherit her estate tax-free. But if she makes it to Jan. 1, 2011, half the estate will be taxed away. That creates some interesting incentives. Maybe they should have called it the Throw Momma From the Train Act of 2001.

That's by no means the only weird element in the tax bill. ...

Moore tries to blame it on Democrats, then says:

the obvious solution to a death-tax nightmare scenario in 2010 is to make the estate-tax repeal permanent.

Krugman predicted this:

In short, the tax bill is a joke. But if the administration has its way, the joke is on us. For the bill is absurd by design. The administration, knowing that its tax cut wouldn't fit into any responsible budget, pushed through a bill that contains the things it wanted most -- big tax cuts for the very, very rich -- and used whatever accounting gimmicks it could find to make the overall budget impact seem smaller than it is. The idea is that when the absurdities become apparent -- when mobs of angry junior vice presidents from New Jersey start demonstrating against the A.M.T., or when elderly multimillionaires develop a suspiciously high rate of fatal accidents -- Congress will always respond with further tax cuts. ...

Someday, responsible politicians — or is that an oxymoron? — will have to untangle this mess. ... But for now, it's a defensive game. The administration, having successfully rammed through a ridiculous tax bill, will try to bamboozle us on other matters. ...

May 27, 2008

McCain: Why Americans Think America is on the Wrong Track

I was surprised this statement by John McCain showing how out of touch he is with people who have to work for a living didn't get more notice in the media:

McCain: Out of Touch on Trade, by Seth Michaels, AFL-CIO Blog: At a speech in Florida yesterday, Sen. John McCain made a baffling pronouncement: The rising discontent in our country is not due to job losses, home foreclosures or the health care crisis, but rather the fact that we aren’t passing a bad trade deal with Colombia.

Here’s what McCain had to say at yesterday’s event:

We have made progress toward this vision by expanding the benefits of free commerce, through ... our free trade agreements... But the progress has stalled; our longstanding bipartisan commitment to hemispheric prosperity is crumbling. We see this most vividly in Barack Obama’s and Hillary Clinton’s opposition to the free trade agreement with Colombia. The failure of Congress to take up and approve this agreement is a reminder why 80 percent of Americans think we are on the wrong track.

What country is he living in?

If Obama had made the same statement, his "elitist views" would have been highlighted all over the airwaves and internet, we would have heard repeatedly about how out of touch Mr. Arugula is with the working class. But McCain says it and there's hardly a stir. Why?

If I were running Obama's campaign, I would be tempted to pull a Bill Clinton and let it slip out that he sometimes sneaks out for fast food, has a secret passion for big time wrestling, dreams of driving around the track at Indie, something like that. Some foible that betrays his "true" identity.

May 25, 2008

"Flat-Out Anti-Immigrant Fearmongering"

Joe Klein is unhappy with CNN:

Lou Demagogue, by Joe Klein: ...I've got to wonder why [CNN] allows Lou Dobbs to continue spewing false, inflammatory nonsense under the guise of objective journalism. Here is his latest confrontation with Paul Waldman of Media Matters about the fictional NAFTA superhighway. Indeed, the Washington Post's Fact Checker gave the NAFTA Superhighway myth four Pinocchios. Now, I know that Dobbs brings in some serious ratings. And he is certainly entitled to his own opinion. But he is not entitled to his own facts--especially not on a network that makes a real effort to separate truth from falsehood and represent all sides of the political debate. Shouldn't someone be editing this swill? Doesn't CNN have a responsibility to tell its viewers that, in this case, one of their presenters is engaged in flat-out anti-immigrant fearmongering? Perhaps the network could employ a simple superimposed title--THIS IS NOT TRUE...or LOU HAS JUMPED THE SHARK ON THIS ONE--whenever Dobbs pretends that there is such a thing as the NAFTA Superhighway. This sort of thing diminishes the credibility and hard work of the other journalists on the network. (And no, I do not count the execrable Glenn Beck as a journalist.)

I don't mean to include every individual in a sweeping statement, but Joe Klein's baseline opinion of CNN appears to be higher than mine. I agree, though, that Lou Dobbs is a downward drag from whatever starting point is assumed.

Markets find a way to work no matter how hard governments work to stop them (see drugs), and with the difference in opportunity as large as it is between the US and Mexico, illegal immigration will continue to be a problem. Sure, we can get tough and reduce the flow of illegal workers, crack down on employers, put illegal workers in jail, but for those who are still engaged in the activity it will become more brutal, more violent, and those who make it here to work will be subjected to much worse working conditions than they already are as people work as hard as they can to conceal their activity. The bigger the penalties if they are caught, the more they will be willing to do to prevent discovery and it will be the workers trying to escape poverty who will bear the brunt of the effort to keep things underground. I'm not saying we shouldn't enforce immigration law, but we need to recognize the consequences of intensified enforcement, and do our best to make the punishment fit the crime of trying to escape from difficult conditions at home.

The only long-term solution is for opportunity to increase in Mexico, for Mexico to develop economically. That's the only thing that, ultimately, will substantially reduce the flow of illegal workers without draconian measures. That means, in part, accepting that some companies will need to move to Mexico, it means building highways between the US and Mexico, etc. The politics of such a policy aren't easy, but we have to do more to help Mexico develop economically if we want to solve this problem - it's in the long-run interest of both countries that we do so. Thus, this needs to be on our political agenda - what will we do to help Mexico to develop? How can we help them to help themselves? Instead of spending money building fences, why not spend it helping to create opportunity for Mexicans in Mexico? Instead of working so hard to keep people out, why not focus more of our efforts on giving them an economic incentive to stay home? We'll all be better off if we do that.

May 08, 2008

A "Misguided Attempt to Appear Unbiased"

Jeff Frankel reacts to Bryan Caplan's op-ed on the gas-tax holiday:

How Far the NYT had to go to Find an Economist to Support the Gas Tax Holiday, by Jeff Frankel: Economists frequently complain that even when 98% of the profession agrees on something (say a free-trade proposition), the media will go to lengths to dig up an economist from the 2% minority in order to balance one from the 98% majority, in its feverish and misguided attempt to appear unbiased and balanced on every issue, even issues that don’t really have two sides. The New York Times op-ed page has outdone itself today by publishing “The 18-cent Solution” by Bryan Caplan. The “callout” heading is “Found: an economist who backs the summer gas-tax holiday.” The impetus, of course, was the question posed to Hillary Clinton by a reporter: can you name a single economist who supports the idea of a summer gas tax holiday?

In this case, the NYT couldn’t find an economist who really takes the minority position on economic grounds, or even on reasonable political economy grounds. ...  Rather Caplan’s argument is a very convoluted political rationalization: (1) the high gas prices engender populist concerns that might lead to bad policies, (2) yes, a gas tax holiday is a bad policy, but (3) one can make a political argument for the gas tax holiday because it is not as bad as some of the other “populist nonsense: price controls, rationing, windfall profits taxes…” that we might get instead. This political argument is quite a stretch as it is, but he then goes on to make it truly absurd by supporting “a pairing of an excess profits tax with a gas tax holiday” on the grounds that it is not as bad as “an excess profits tax all by itself.” Apparently two bad policies is better than none! ...

Bryan Caplan is a perfectly competent economist, with a Ph.D. and a job and everything. ... Why would he spout the nonsense that is in this op-ed? The answer is very clear: it is the way to get into the New York Times. He gleefully admits as much on his blog today: “I’ve finally made the Gray Lady: Today’s New York Times features my op-ed inspired by Sunday’s post, I’ll Shill for Hillary. I hope critics don’t misrepresent me as an economic apostate; I’m not dissenting from the standard analysis… look on the bright side: I’m in the New York Times. Sweet!”

Bryan: A suggestion. You should now write a letter to the New York Times retracting your op-ed on the grounds that you should have known that readers would incorrectly infer that you were supporting the policy on economic grounds. [Arnold, can you help out here?] If you do this, the Club of Economists might let you back in. Plus, you will have gotten your name in the NYT a second time! Sweet!”

Apr 19, 2008

About Those TV Generals...

This is about the "effort to dupe the American public with propaganda dressed as independent military analysis."

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Apr 18, 2008

An Open Letter to ABC about the Presidential Debate

We the undersigned deplore the conduct of ABC's George Stephanopoulos and Charles Gibson at the Democratic Presidential debate on April 16. The debate was a revolting descent into tabloid journalism and a gross disservice to Americans concerned about the great issues facing the nation and the world. This is not the first Democratic or Republican presidential debate to emphasize gotcha questions over real discussion. However, it is, so far, the worst.

For 53 minutes, we heard no question about public policy from either moderator. ABC seemed less interested in provoking serious discussion than in trying to generate cheap shot sound-bites for later rebroadcast. The questions asked by Mr. Stephanopoulos and Mr. Gibson were a disgrace, and the subsequent attempts to justify them by claiming that they reflect citizens' interest are an insult to the intelligence of those citizens and ABC's viewers. Many thousands of those viewers have already written to ABC to express their outrage.

The moderators' occasional later forays into substance were nearly as bad. Mr. Gibson's claim that the government can raise revenues by cutting capital gains tax is grossly at odds with what taxation experts believe. Both candidates tried, repeatedly, to bring debate back to the real problems faced by ordinary Americans. Neither moderator allowed them to do this.

We're at a crucial moment in our country's history, facing war, a terrorism threat, recession, and a range of big domestic challenges. Large majorities of our fellow Americans tell pollsters they're deeply worried about the country's direction. In such a context, journalists moderating a debate--who are, after all, entrusted with free public airwaves--have a particular responsibility to push and engage the candidates in serious debate about these matters. Tough, probing questions on these issues clearly serve the public interest. Demands that candidates make pledges about a future no one can predict or excessive emphasis on tangential "character" issues do not. This applies to candidates of both parties.

Neither Mr. Gibson nor Mr. Stephanopoulos lived up to these responsibilities. In the words of Tom Shales of the Washington Post, Mr. Gibson and Mr. Stephanopoulos turned in "shoddy, despicable performances." As Greg Mitchell of Editor and Publisher, describes it, the debate was a "travesty." We hope that the public uproar over ABC's miserable showing will encourage a return to serious journalism in debates between the Democratic and Republican nominees this fall. Anything less would be a betrayal of the basic responsibilities that journalists owe to their public.

Spencer Ackerman, The Washington Independent
Thomas Adcock, New York Law Journal
Eric Alterman, City University of New York
Dean Baker, The American Prospect Online
Steven Benen, The Carpetbagger Report
Julie Bergman Sender, Balcony Films
Ari Berman, The Nation
Brian Beutler, The Media Consortium
Michael Bérubé, Crooked Timber, Penn. State University
Joel Bleifuss, In These Times
Sam Boyd, The American Prospect
Will Bunch, Philadelphia Daily News
Lakshmi Chaudry, In These Times
Michael Cohen, The New America Foundation
Lark Corbeil, Public News Service
Brad DeLong, Brad DeLong's Semi-Daily Journal and UC Berkeley
Adam Doster, In These Times
Kevin Drum, The Washington Monthly
Gerald Dworkin, UC Davis
Henry Farrell, Crooked Timber,George Washington University
James Galbraith, University of Texas at Austin
Todd Gitlin, Columbia University, TPM Cafe
Merrill Goozner (formerly Chicago Tribune)
Ilan Goldenberg, The National Security Network
Arthur Goldhammer, Harvard University
Robert Greenwald, Brave New Films
Chris Hayes, The Nation
Don Hazen, Alternet
James Johnson, University of Rochester
Michael Kazin, Georgetown University
Ed Kilgore, The Democratic Strategist
Charlie Kireker, Air America Media
Richard Kim,
The Nation
Ezra Klein, The American Prospect
Mark Kleiman, The Reality Based Community, UCLA
Ralph Luker, Cliopatria
Scott McLemee, Inside Higher Ed
Ari Melber, The Nation
Luke Mitchell, Harper's Magazine
Rick Perlstein, Campaign for America's Future
Katha Pollit, The Nation
Joy-Ann Reid, The South Florida Times
David Roberts, Grist
Thomas Schaller, Columnist, The Baltimore Sun
Adele Stan, The Media Consortium
Jonathan Stein, Mother Jones Magazine
Rinku Sen, ColorLines Magazine
Matthew Shugart, UC San Diego
Matt Steinglass, Deutsche Presse-Agentur
Mark Thoma, The Economist's View
Michael Tomasky, The Guardian
Cenk Uygur, The Young Turks
Tracy Van Slyke, The Media Consortium
J. Harry Wray, DePaul University
Kai Wright, The Root
Matthew Yglesias, The Atlantic Monthly

[Update: In case there is any confusion, I should have made clear that the letter is a group effort.]

Apr 14, 2008

"Obama, Bitterness, Meet the Press, and the Old Politics"

Robert Reich has something to say:

Obama, Bitterness, Meet the Press, and the Old Politics, by Robert Reich: I was born in Scranton, Pennsylvania, 61 years ago. My father sold $1.98 cotton blouses to blue-collar women and women whose husbands worked in factories. Years later, I was secretary of labor of the United States, and I tried the best I could – which wasn’t nearly good enough – to help reverse one of the most troublesome trends America has faced: The stagnation of middle-class wages and the expansion of poverty. Male hourly wages began to drop in the early 1970s, adjusted for inflation. The average man in his 30s is earning less than his father did thirty years ago. Yet America is far richer. Where did the money go? To the top.

Are Americans who have been left behind frustrated? Of course. And their frustrations, their anger and, yes, sometimes their bitterness, have been used since then -- by demagogues, by nationalists and xenophobes, by radical conservatives, by political nuts and fanatical fruitcakes – to blame immigrants and foreign traders, to blame blacks and the poor, to blame "liberal elites," to blame anyone and anything.

Rather than counter all this, the American media have wallowed in it. Some, like Fox News and talk radio, have given the haters and blamers their very own megaphones. The rest have merely "reported on" it. Instead of focusing on how to get Americans good jobs again; instead of admitting too many of our schools are failing...; instead of showing why we need a more progressive tax system to finance better schools and access to health care, and green technologies that might create new manufacturing jobs, our national discussion has been mired in the old politics.

Listen to this morning’s “Meet the Press” if you want an example. Tim Russert ... interviewed four political consultants – Carville and Matalin, Bob Schrum, and Michael Murphy. ... And what do Russert and these four consultants talk about? The potential damage to Barack Obama from saying that lots of people in Pennsylvania are bitter that the economy has left them behind; about HRC’s spin on Obama’s words (he’s an “elitist,” she said); and John McCain’s similarly puerile attack.

Does Russert really believe he’s doing the nation a service for this parade of spin doctors talking about potential spins and the spin-offs from the words Obama used to state what everyone knows is true? Or is Russert merely in the business of selling TV airtime for a network that doesn’t give a hoot about its supposed commitment to the public interest but wants to up its ratings by pandering to the nation’s ongoing desire for gladiator entertainment instead of real talk about real problems.

We’re heading into the worst economic crisis in a half century or more. Many of the Americans who have been getting nowhere for decades are in even deeper trouble. Large numbers of people ... are losing their homes and losing their jobs, and the situation is likely to grow worse. ...

Bitter? You ain’t seen nothing yet. And as much as people like Russert, Carville, Matalin, Schrum, and Murphy want to divert our attention from what’s really happening; as much as HRC and McCain seek to make political hay out of choices of words that can be spun cynically by the mindless spinners of the old politics; as much as demagogues on the right and left continue to try to channel the cumulative frustrations of Americans into a politics of resentment – all these attempts will, I hope, prove futile. Eighty percent of Americans know the nation is on the wrong track. The old politics, and the old media that feeds it, are irrelevant now.

The working class has been largely ignored by this administration, save a few tokens when elections are near, and that's what the questions ought to be about. What do each of the candidates plan to do to change the conditions that led to Americans being "more pessimistic about their situation than they have been for more than a quarter century"? How many times has McCain flip-flopped on economic policy? Does he have any plans at all to address these problems (beyond wishful thinking), or will he follow in this administration's footsteps on (the lack of) domestic policy? But no, instead, we get this drivel. The public has not been well served by a press that seems, as I watch CNN, to spend more time picking out their clothes than they do preparing to talk about issues, and they aren't even the worst offenders. I shouldn't be surprised, it happens every four years, but I hoped for better. I'm afraid old politics still works.

What do you think? Is Robert Reich right that economic conditions will nullify old politics and make this election different?

Mar 27, 2008

A "53-Trillion Dollar Asteroid"?

This argues we should leave Social Security benefits alone:

Time to honour America’s debt to the retired, by John Shilling, Commentary, Financial Times: The first American baby boomers have now become eligible to retire and start drawing on Social Security... Many politicians are telling us that the resulting rise in Social Security “entitlement” payments will break the budget, so we have to cut benefits to retired people. But the politicians do not want to mention that the Social Security system has been compiling a huge surplus. Why? Because they have been using that surplus for years to hide the real size of the current federal budget deficit, allowing them to spend more and justify tax cuts for the wealthy. ...

Social Security was initially a pay-as-you-go system – annual payroll taxes of workers covered that year’s payments to retired people. By the early 1980s, however, it was clear that this system was not sustainable. Payments were increasing faster than revenues, and when the baby boomers started retiring and collecting pensions, there would be huge shortfalls. President Ronald Reagan had the prudence to address this problem early enough to make Social Security sustainable. ... Social Security payroll taxes were raised, creating a surplus in the trust fund that would fully cover the future costs of baby-boomer retirement. ...

Baby boomers, and all others who have worked since 1983, paid in more than needed for Social Security retirement payments. They saved and created the trust fund surplus, which now amounts to more than $2,000bn and must be invested in US Treasury bonds. It is projected to reach nearly $3,000bn in 10 years. Then Social Security will stop generating a surplus to subsidise the rest of the budget and will begin redeeming its bonds to help make payments.

Current projections show that the trust fund bonds may be exhausted by about 2041. The trust fund’s full sustainability for at least the next 75 years could be restored easily with minor adjustments...

Politicians understand that, with the Social Security Trust Fund surplus declining, they will no longer be able to borrow from them under the table while announcing fictitiously smaller deficits to justify continued expenditures and tax cuts. And they will have to generate funds from other sources of revenue to redeem the bonds after 2017. Rather than admit too much was borrowed recently, and must now be repaid, they want to reduce Social Security benefits. This puts much of the burden on the middle class, who created most of the surplus that has been used to hide the real size of the deficits.

Fundamentally, the Social Security issue is not one of “entitlements” but of the obligation of our government to honour its debt and not reduce Social Security benefits.

There has been lots written and discussed in the media on Social Security, but not nearly as much on the real problem, rising health care costs.

Maybe one reason people are so confused about about the Social Security funding issue and the degree to which it is a problem is due to imagery like this from supposedly trusted news sources:

Cnn1


Cnn2

The broadcast itself did mention health costs and Medicare, but it would have been difficult to tell from the broadcast, or from Wolf Blitzer's questions and presentation, that the rising cost of health care rather than Social Security is the source of the problems. And the interview with Glenn Beck didn't help at all.

Update: See pgl at Angry Bear who also noticed Beck's claim.

Jan 03, 2008

"Not Remotely the Same as Good at Getting it Right"

Why oh why do I read anything at the NRO and, if I do, why do I ever bother with Jerry Bowyer? He says:

Gas Bags, by Jerry Bowyer, NRO: ...Gas-price hikes will never, ever, ever cut into consumer spending. It’s a mathematical impossibility. Here’s why: Gas prices are a component of consumer spending.

You see, when gas prices climb from $2 a gallon to $3 a gallon, one of the components of retail spending goes up. ...

Sure, if people spend more money on gas, they may very well spend less on soft drinks. But that’s a substitution, not a decrease in overall spending. The spending simply shifts from one retail category to another.

So why don’t we ever hear this? Well, with a few notable exceptions, mainstream TV commentators don’t know the facts, which often are buried in the details. You can’t just read a financial press release from a government organization (or worse yet, the blurb about the press release) and understand what the data are saying. A Larry Kudlow, a Steve Forbes, a Dan Yergin, a John Rutledge, an Art Laffer, a Brian Wesbury — these folks actually read the reports, including the tables in the back. They look at rows of numbers; in the case of a consumer-spending report, they note the row that is devoted to gas stations.

Meanwhile, the ... only numbers they master are the phone numbers of their favorite producers. Good at getting on the air is not remotely the same as good at getting it right.

He is arguing that input costs don't matter, but of course that's wrong. It's just not true that "Gas-price hikes will never, ever, ever cut into consumer spending," see the 1970s for one counterexample. Or do a simple thought experiment. If the price of oil went up to, say, $1,000 a barrel tomorrow, would real GDP stay at its current level, or might you expect a decline in GDP, in the short-run at least? And if GDP falls, then consumer spending will fall along with it.

Maybe the problem is that the people he so admires are simply looking at tables of numbers rather than doing actual econometric investigations solidly grounded in economic theory, something that involves more than, say, two lines drawn on a graph (see the completely uninformative graph he has plotted in this article for his latest along these lines - that graph tells us nothing whatsoever, but Bowyer appears to place great stock in the relationship between the two variables over the last 11 months - it's almost comical to see the graph put forward as serious analysis). Seriously, try doing actual econometric analysis instead of looking at "rows of numbers; in the case of a consumer-spending report, ... the row that is devoted to gas stations." Even when you try to get sophisticated and compare two rows at once, that isn't adequate (hey, both are going up!). Doing so leads to false conclusions like tax cuts pay for themselves because you haven't bothered to consider factors like trend growth in tax receipts (to name just one omitted variable in the typical "analysis").

Anyway, Bowyer - who isn't an economist but plays one at the NRO - should realize that "good at getting an article at the NRO is not remotely the same as good at getting it right," something he has shown time and again.

Update: PGL continues the discussion.

Dec 28, 2007

Bill Kristol To Become NY Times Columnist?

Wow. What's up with this?:

Bill Kristol To Become New York Times Columnist, by Danny Shea, Huffington Post: The Huffington Post has learned that, in a move bound to create controversy, the New York Times is set to announce that Bill Kristol will become a weekly columnist in 2008. Kristol, a prominent neo-conservative who recently departed Time magazine in what was reported as a "mutual" decision, has close ties to the White House and is a well-known proponent of the war in Iraq. Kristol also is a regular contributor to Fox News' Special Report with Brit Hume.

Dec 17, 2007

"What's the Difference between Bloggers and Illegal Immigrants?"

Andrew Leonard responds to George Borjas:

What's the difference between bloggers and illegal immigrants?, by Andrew Leonard: Of all the bonafide economists who blog regularly, Harvard's George Borjas gets the award for Most Single-minded Focus. Borjas' issue is immigration, especially illegal immigration. If you're looking for academic support for the thesis that immigration depresses the wages of native-born American workers, he's your man. He's also concerned about the cultural impact of Mexican immigrants (legal or illegal) who he thinks are not as likely to assimilate with mainstream America as has every other previous wave of immigrants to the United States. He's very consistent...

But it's hard to know what to make of one recent entry comparing bloggers to illegal immigrants.

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Dec 12, 2007

"In Your Face" Political Television and Democracy

How well do "in your face" type televised political debates inform viewers about the content and legitimacy of each sides views?:

The effect of 'in your face' political television on democracy, EurekAlert: Television can encourage awareness of political perspectives among Americans, but the incivility and close-up camera angles that characterize much of today’s “in your face” televised political debate also causes audiences to react more emotionally and think of opposing views as less legitimate.

These findings come from a research project conducted by political scientist and communications scholar Diana C. Mutz (University of Pennsylvania) and published in the November issue of the American Political Science Review... The full article is available online.

Conflict is inherent in any democracy, but the legitimacy of democratic systems rests on the extent to which each side in any controversy perceives the opposition as having some reasonable foundation for its position. Mutz’s research investigates two key questions. First, does televised political discourse familiarize viewers with political perspectives they disagree with? Second, if so, do viewers perceive such oppositional views as more legitimate after seeing them hashed out on television?

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Dec 02, 2007

You're Outta Here! (The Don't You Wish It Were True Edition)

And it's

one: Defending Goldman Sachs, by Dean Baker

two: Ben Stein Takes on Goldman and Loses, by Yves Smith

three: Ben Stein Watch: December 2, 2007, by Felix Salmon

strikes you're out... Update: Foul tip? That's nuts, the whole column was one big whiff, but, okay, strike three again...

three: What it takes, by Paul Krugman

With all the strikeouts he's had in the past, Stein ought to be pulled from the game permanently, but I have a feeling he'll be back to whiff another day.

Nov 07, 2007

Hurts So Good

Kevin Drum on Robert Samuelson's latest column, "Recession's Hidden Virtues":

The Great Depression Really Was Great!...., by Kevin Drum: Robert Samuelson looks on the bright side of the recession that he thinks is coming our way soon:

Recessions also have often-overlooked benefits. They dampen inflation. In weak markets, companies can't easily raise prices or workers' wages.

Stagnant wages are an "often-overlooked benefit" of recessions?

His basic argument seems to come down to recessions that aren't very bad aren't very bad. He even throws out the bad ones to make the point that mild recessions are mild:

[P]opular rhetoric exaggerates the damage. By and large, recessions are problems, not tragedies. Since World War II, there have been 10 of them, or one about every six years. On average, they've lasted 10 months... Disregarding two severe recessions -- those of 1973-75 and 1981-82 -- peak monthly unemployment has averaged 7.1 percent.

It is true that economic fluctuations have been less severe since 1984, but past performance is no guarantee of future results and I am not yet ready to declare that severe economic downturns are a relic of the past (though the same cannot be said for some columnists who still use notions of cost-push inflation arising from union power to explain inflation).

Nov 02, 2007

Paul Krugman: Prostates and Prejudices

Will the media call Rudi Giuliani on his repeated use of false claims to support is policy positions?:

Prostates and Prejudices, by Prostates and Prejudices, Commentary, NY Times: “My chance of surviving prostate cancer — and thank God I was cured of it — in the United States? Eighty-two percent,” says Rudy Giuliani in a new radio ad attacking Democratic plans for universal health care. “My chances of surviving prostate cancer in England? Only 44 percent, under socialized medicine.”

It would be a stunning comparison if it were true. But it isn’t. And thereby hangs a tale — one of scare tactics, of the character of a man who would be president and, I’m sorry to say, about what’s wrong with political news coverage. ... Mr. Giuliani’s claim is wrong on multiple levels — bogus numbers wrapped in an invalid comparison embedded in a smear.

Mr. Giuliani got his numbers from a recent article in City Journal, a publication of the conservative Manhattan Institute. The author gave no source for his numbers... And they’re just wrong.

You see, the actual survival rate in Britain is 74.4 percent. That still looks a bit lower than the U.S. rate, but the difference turns out to be mainly a statistical illusion. The ... chance of dying from prostate cancer is about the same in Britain as it is in America. So Mr. Giuliani’s supposed killer statistic about the defects of “socialized medicine” is entirely false...

Anyway, comparisons with Britain have absolutely nothing to do with what the Democrats are proposing. In Britain, doctors are government employees; despite what Mr. Giuliani is suggesting, none of the Democratic candidates have proposed to make American doctors work for the government.

As a fact-check in The Washington Post put it: “The Clinton health care plan” — which is very similar to the Edwards and Obama plans — “has more in common with the Massachusetts plan signed into law by Gov. Mitt Romney than the British National Health system.” Of course, this hasn’t stopped Mr. Romney from making similar smears...

But here’s what I don’t understand: Why isn’t Mr. Giuliani’s behavior here considered not just a case of bad policy analysis but a character issue?

For better or (mostly) for worse, political reporting is dominated by the search for the supposedly revealing incident, in which the candidate ... reveals his true character. And this incident surely seems to fit the bill.

Leave aside the fact that Mr. Giuliani is simply lying about what the Democrats are proposing; after all, Mitt Romney is doing the same thing.

But health care is the pre-eminent domestic issue for the 2008 election. Surely the American people deserve candidates who do their homework on the subject.

Yet what we actually have is the front-runner for the Republican nomination apparently basing his health-care views on something he read somewhere, which he believed without double-checking because it confirmed his prejudices.

By rights, then, Mr. Giuliani’s false claims about prostate cancer — which he has ... continued to repeat, along with some fresh false claims about breast cancer — should be a major political scandal. As far as I can tell, however, they aren’t being treated that way.

To be fair, there has been some news coverage of the prostate affair. But it’s only a tiny fraction of the coverage received by Hillary’s laugh and John Edwards’s haircut.

And much of the coverage seems weirdly diffident. Memo to editors: If a candidate says something completely false, it’s not “in dispute.” It’s not the case that “Democrats say” they’re not advocating British-style socialized medicine; they aren’t.

The fact is that the prostate affair is part of a pattern: Mr. Giuliani has a habit of saying things ... that are demonstrably untrue. And the American people have a right to know that.

It's blatant:

Rudy Campaign To Media: We're Going To Keep Lying About Health Care -- And There's Nothing You Can Do About It, by Greg Sargent: ...The Rudy campaign has now blithely confirmed that they are going to keep on telling this lie [about health care]. ...[C]heck out this little nugget at the end of the piece about Rudy spokesperson Maria Comella's response to all this:

Asked if Mr. Giuliani would continue to repeat the statistic, and if the advertisement would continue to run, Ms. Comella responded by e-mail: "Yes. We will."

Memo to media: Rudy and his campaign think you're a bunch of chumps. ... Maybe it's time to get serious about what this guy is up to. ...

Nov 01, 2007

Swiftboating the Messenger

Michael Tomasky reviews Paul Krugman's book. This is a small part of a much longer review appearing in the New York Review of Books:

The Partisan, by Michael Tomasky, NY Review of Books - Review of Paul Krugman's "The Conscience of a Liberal": ...Many liberals would name Paul Krugman of The New York Times as perhaps the most consistent and courageous—and unapologetic—liberal partisan in American journalism. He has made his perspective on the Bush administration and the contemporary right, and on the need to see politics as a battle, manifestly clear in column after incendiary column. ...

But the pre-Bush Krugman was a quite different person. He was in those days far more prominently an economist than a polemicist... As such, he was not much involved in partisan politics. He was always a liberal, to be sure, and highly critical of supply-side economics. But he also disparaged economists to his left, especially opponents of free trade... In his 1994 book, Peddling Prosperity, Krugman had harsh words for liberal economists such as Robert Reich and Lester Thurow, who advocated selective protection from foreign competition, particularly from countries in which poor workers were harshly exploited. ... If you were a radical economist in those days, or a labor movement intellectual, or a left-leaning social scientist, chances are you weren't a big fan of Paul Krugman. ...

Krugman started writing in the Times on January 2, 2000. He made a point of challenging antiglobalization activists in his very first column. ... During that election year, he regularly and strongly criticized George W. Bush's tax-cut proposal and his opaque statements about Social Security. But he limited his critiques to economic policy and, compared to his Op-Ed-page colleagues, didn't write about politics all that often...

About Bush v. Gore, he had little to say. After Bush took office, he savaged the administration's regressive tax cuts. But it wasn't really until the fall of 2002, as the marketing of the Iraq war began in earnest, that he began broadening his criticism beyond economics to the war and the threats to civil liberties, extending his critique to the larger conservative movement and its modus operandi, and discussing the mainstream press's failure to report what was really going on right in front of their noses. It was around then that Krugman began producing with regularity the kinds of columns that whiz their way around the liberal blogosphere. ...

So Krugman came a bit late to the political trenches—and perhaps a bit reluctantly. Just as Arnold Schoenberg said of himself, when asked by a stranger if he was indeed the controversial composer, that "nobody wanted to be, someone had to be, so I let it be me," so I suspect Krugman might say that virtually no one on the leading Op-Ed pages was saying the things that so obviously needed to be said as the Iraq war approached, so he let it be himself who said them.

And now, after years of twice-weekly deadlines, he appears to have decided that there's no turning back: The Conscience of a Liberal, with its title so clearly aping and answering Barry Goldwater's from forty-seven years ago, represents Krugman's fullest embrace of his polemicist identity. ...

[T]he intensity of his discussion ... suggests something about the ways he has moved, in the last fifteen or so years, from being a center-left scholar to being a liberal polemicist. Those may seem like different identities. But perhaps also there is a consistency at work here. From what I have read of his economic writings, they are not unlike his columns, or his attacks on Reagan and the National Review in his book, in the sense that persuasion of people with very different views is at best of secondary interest to him. What is of interest to him is describing things as he believes they are.

In Washington, this earns one the epithet—as Washington prefers to think of it—"partisan." But too many people who are also granted valuable journalistic space spent the early Bush years in denial about the evidence that was accumulating right before their eyes, whether about official lies, or executive overreach, or rampant class warfare... Mildly deploring some of these excesses while accepting others is what is meant by bipartisanship today, and Krugman is right to have none of it. As a result he has left us a much more accurate record of the Bush years than, say, The Washington Post's David S. Broder, or some of his more celebrated New York Times colleagues...

And he has paid a price for "describing things as he believes they are" and not backing down. Here's Brad DeLong:

I guess it started, I think, with that extremely strange and not-very-analytical Svengali of the Bush Social Security reform plan, Peter Ferrara, ... back in 2001 ... denounced ..the highly irascible Paul Krugman...

That was, I think, the start of a very peculiar meme: a piling-on of critics of Bush--especially of Paul Krugman--whose sole criticism was that he was "shrill." The critique was neither that he was a bad economist, nor that his accusations that the Bush administration was lying about a whole bunch of stuff were incorrect... So if you wanted to attack Krugman, but could not attack him because his analytics were right, and could not attack him because his accusations of Bush administration dishonesty were correct, what can you do? Well, a bunch of right-wingers led, IIRC, by Mickey Kaus and Andrew Sullivan found a way.

Here's Kaus:

"Comparative Advantage" by Nicholas Confessore: "[Krugman] is obviously a very smart guy, basically liberal, with complicated views, who once recognized when his own side was wrong. And at some point he switched and became someone who only sees what's wrong with the other side, in fairly crude terms," says Mickey Kaus. "The Bush tax cut is based on lies. But it's not enough to criticize a policy to say that it's based on lies. You have to say whether it's good or bad for the country."

(Never mind, of course, that Paul always spent a lot of time, space, wordcount, energy, and breath criticizing the substance of Bush's idiot policies. Yes, they were bad for the country--and Paul said why.)

And here's Sullivan:

www.AndrewSullivan.com - Daily Dish: I have long found Paul Krugman an insufferably pompous, shrill, Bush-bashing pseudo-populist...

The accusation--the only line of critique--is that Paul "only sees what's wrong with the other side, in fairly crude terms," or--in shorthand--is "shrill."

God alone knows why they thought this line of attack would do anything other than shred their own reputations. God knows why others took up this line of attack. But take off it did, both as a narrowly-focused attempt to degrade the reputation of Paul Krugman, and as a broader attempt to marginalize all who pointed out that the policies of the Bush administration were (a) stupid, and (b) justified by lies, and it took off both among the yahoos of the right and also among the denizens of the center-left.

Why did it take off? I think the reasons were well laid out by Nick Confessore:

"Comparative Advantage" by Nicholas Confessore: On balance, Krugman's record stands up pretty well. On the topics he writes about most often and most angrily--tax cuts, Social Security, and the budget--his record is nearly perfect. "The reason he's gotten under the White House's skin so much," says Robert Shapiro, a former undersecretary of commerce in the Clinton administration, "is that he's right. None of it is rocket science."

So if dismantling the facade of lies around, say, Bush's tax cut is so easy to do--and makes you the most talked-about newspaper writer in the country--why don't any other reporters or columnists do it themselves? Because ... Washington journalists ... usually don't call a spade a spade, unless the lie is small or something personal. When it comes to big policy disagreements, most reporters prefer a he-said, she-said approach--and any policy with a white paper or press release behind it is presumed to be plausible and sincere, no matter how farfetched or deceptive it may be.

Similarly, among pundits of the broad center-left, it's considered gauche to criticize the right too persistently, no matter the merits of one's argument. ...

This seemed to hit the nail on the head: it was (and is) considered impolite to take what the Bush administration said about the rationales for its policies seriously. Consider the Washington Post's Richard Cohen, sneering on September 16, 2004 at those who took Bush's impact on the country seriously:

I was only briefly enamored of George W. Bush... who went to war in Iraq for stated reasons that turned out to be baseless... neoconservative foreign policy agenda in which violence plays too prominent and casual a role.... chilled by assertions of near-royal power... choice of judges, his energy policy, his unilateralism or the manner in which he has intruded religion into politics.... I nevertheless cannot bring myself to hate Bush.... In fact, Bush haters go so far they wind up adding a dash of red to my blue...[1]

In this context, given that criticisms of George W. Bush and the malevolence, mendacity, incompetence and disconnection from reality of him and his administration are--no matter how sound their analytics or how true their factual claims--going to be dismissed by many as impolite and "shrill"...

Somebody needed to say the things Paul Krugman said. But I hear this so much - about the shrillness, about not doing economics anymore (which isn't true - e.g. for just one recent example, who do you think started the meme "non-bank bank run" in the recent financial crisis?), about how he needs more space to explain himself in more detail, how what he will say is predictable, he'll just bash Bush no matter the policy, etc., etc.

I don't have any substantive disagreements with Brad's take on this but I'm still not sure I fully understand it.

Maybe you can help me see this better. So here's the question. If you agree with Krugman's critics, even to a small degree, or even if you don't, how could he have been more effective? In his shoes, how would you have communicated the points he needed to make in a way that would have had more impact? I'm not convinced there is such an alternative path, but I'm curious to hear other thoughts.

Oct 29, 2007

"We Just Can't Afford to Cut Social Security Benefits Further"

Dean Baker is amazed:

The End Is Near! Post Publishes Column Defending Social Security, by Dean Baker: Is that a trumpet I hear in the distance? Why are the rivers flowing backwards? And who are those four guys on horses?

Yes, the Washington Post has published a column arguing against the Social Security crisis story. Robert Ball, the former Social Security commissioner, a member of the 1983 Greenspan commission, and a great defender of the system got 700 words in the paper this morning to make the case. Read it carefully, most of us will probably not live to see another such piece in the pages in the Post.

Here's the article:

A Social Security Fix For 2008, by Robert M. Ball, Washington Post: In the Oct. 19 editorial " Mr. Giuliani's No-Tax Pledge," The Post stated: "It's no more responsible for Republicans to rule out tax increases [to strengthen Social Security] than it is for Democrats to insist on no benefit cuts." The Post praised, as a "bipartisan blend," President Ronald Reagan's acceptance of a 1983 fix that included both.

I take exception. It's the essence of responsibility, in my view, to insist on no benefit cuts.

In 1983, I served on the National Commission on Social Security Reform (better known as the Greenspan Commission)... What was right in 1983 -- a balanced package of benefit cuts and tax increases as part, roughly half, of the final agreement -- would be wrong today.

Social Security benefits are modest by any measure and are already being cut -- by raising the age of eligibility for full benefits and by deducting ever-rising Medicare premiums from benefit checks. So the benefits provided for under present law will replace, on average, a lower percentage of prior earnings than in the past. To cut them further would undermine all that Social Security has achieved -- exposing millions of vulnerable people, both elderly and disabled, to needless economic hardship.

Social Security has never been more important to more Americans than it is now. Private pension plans continue to dwindle -- currently covering only about 20 percent of private-sector employees -- and the national rate of savings hovers around zero. We just can't afford to cut Social Security benefits further. ...

Social Security benefits are vital... About a third of the elderly rely on Social Security for 90 percent or more of their income; two-thirds count on it to supply at least half of their income. The program lifts 13 million elderly beneficiaries above poverty.

Without Social Security, 55 percent of the disabled -- and a million children -- would live in poverty. The program is particularly important to women and minorities. It provides 90 percent or more of the incomes of almost half of all unmarried women age 65 and older..., and it is the sole source of income for 40 percent of elderly African Americans and Hispanic Americans.

Social Security is the nation's most effective anti-poverty program. But it's much more than that. For every worker it provides a solid base on which to try to build an adequate level of retirement income. To weaken that foundation would be grossly irresponsible.

The good news is that there's no need to weaken it. ... The program can be brought into close actuarial balance over the long run with just three revenue-enhancing changes that are desirable in any case:

Gradually increase the maximum amount of earnings covered by Social Security so that the traditional goal -- covering 90 percent of all earnings -- is once again achieved. This change would affect only the 6 percent of earners...

Allow Social Security to improve earnings by investing some of its assets -- up to 20 percent, say -- in equities, as just about all other public and private pension plans do.

Provide a new source of income by retaining a residual estate tax and dedicating it to Social Security. ... Dedicating the income from the tax to Social Security would considerably improve the progressivity of Social Security financing as well as increasing revenue.

Presidential candidates should be expected to discuss Social Security financing. But in 2008 they shouldn't be held to a 1983 formula. We're in a different time, with different needs -- and there are much better options available than benefit cuts.

Oct 27, 2007

"Where Does the Right-Wing End and the Media Begin?"

This is part of an interview with Paul Krugman on the relationship between the right-wing and the media, and other matters:

Where Does the Right-Wing End and the Media Begin? By Rory O'Connor, AlterNet: I had the opportunity to sit down this week with ... Paul Krugman... He certainly pulled no punches during our conversation...

Rory O' Connor: ...What role if any do the media play in movement conservatism?

Paul Krugman: The media are a very important force... They shape perceptions, and they conceal issues. Look at the 2000 presidential campaign, for example, where the media were so heavily biased against Al Gore. That's what brought Bush to within a Supreme Court decision of the White House. ...[T]he role of the media in not telling you reasons why you should be skeptical about the course of the war, for example, it's enormously important. ...

[T]here are several major parts of the news media that are for all practical purposes part of "movement conservatism" -- Fox News, the New York Post, the Washington Times -- and in which other news organizations are intimidated, at least to some extent. I sometimes talk about ... "asymmetrical intimidation." If you say a true but unflattering thing about Bush or in fact about any other prominent conservative, oh, boy! People are going to go after you. I mean, I've got people working full-time going after me, right? But if you say a false, unflattering thing about a Democrat or a progressive, no risk ... And that shapes coverage, no question about it. It's better now, but it's still very asymmetric. The other thing ... about the media is their addiction to the trivial. We've got the most substantive election coming up, I think, ever. ... And what are we seeing news stories about? John Edwards' hair and Hillary Clinton's laugh ... this is horrifying! And again -- it's asymmetric. ...

ROC: It sounds like you're saying there's a bias in the media. If you are, what is the bias?

PK: The media's bias, a large part of it is in fact right-wing bias, because they are effectively part of the right wing. Fox News ... there's ... no liberal equivalent..., there is no network that, if a conservative got the Nobel Peace Prize, would have responded the way Fox News did to Al Gore's Peace Prize...

Beyond that, there's two things at least; first, the hatred of substance -- they really want to talk about all that trivia -- and there's also the fetish of evenhandedness. ... Way back in the 2000 campaign, I wrote ... that if Bush said the earth was flat, the headline would read: "Opinions Differ on Shape of the Planet." I was thinking specifically about what Bush was saying about taxes and Social Security, which were just out and out lies! But no one would say that, and they still won't. It's better now, a little, but they still won't say it... [T]he Big Lies are all on the right right now. So it works much more to their advantage.

ROC: Do you think it's possible that economics is driving politics in the media?

Continue reading ""Where Does the Right-Wing End and the Media Begin?"" »

Oct 22, 2007

The Great Lie of Supply-Side Economics

I am very pleased to see this, and not just because there's a link to this site. I've been frustrated with the press on the 'Laffer curve, tax cuts have paid for themselves' issue because the press has enabled a big lie. It's a lie Republican candidates, even the president, can still repeat with very little attention from the mainstream media. No matter how often reputable economists on the right and the left have said this is a lie, the press has ignored it and allowed it to continue unquestioned. Some of you around here are probably tired of hearing about it (though see here), but it's a lie with consequences. The tax cuts that went through were sold on false premises - what it costs us is far greater than advocates said, advocates who claimed it would actually increase revenue and cost us nothing. It does cost us, hundreds of billions of dollars so far, and that cost has not been presented honestly to the public by either the advocates of the tax cuts or the press reporting on the issue. Without an adequate understanding of the true costs, the public discussion on the issue is distorted and the result is bad public policy.

The big lie matters, and the sooner the press starts to call politicians on it, the better for us all. There are encouraging signs, Jon Chait's recent book being one example and this being another, but it's still possible to tell the lie with little consequence from the mainstream media. Here's James Surowiecki (whom I've come to respect as an excellent reporter on economics):

The Tax Evasion: The Great Lie of Supply-Side Economics, by James Surowiecki, The New Yorker: In American politics, supply-side economics is the monster that will not die. The supply-side argument that, in the United States, tax-rate cuts pay for themselves ... has little or no support within the mainstream economic profession, and no hard empirical data to back it up. Myriad studies have demonstrated that both the Reagan tax cuts of the nineteen-eighties and the tax cuts put through under the current Administration shrank government revenues and led to bigger budget deficits.

Yet the absence of proof for supply-side theory has not dimmed Republicans’ devotion to it. Last month, President Bush told Fox News that his tax cuts had “yielded more tax revenues, which allows us to shrink the deficit.” Dick Cheney insists that “sensible tax cuts increase economic growth and add to the federal treasury.” Every major Republican Presidential candidate ... is on the record as saying that tax cuts pay for themselves. And, just last week, a New York Sun editorial published a list of what “the Republican Party stands for.” First on the list? “Reductions in top marginal tax rates . . . lead to greater government revenues in the long run.”

This supply-side orthodoxy is striking in a couple of ways. First, it requires Republican politicians to commit themselves publicly to a position that is wrong—and wrong not as a matter of ideology or faith but as a matter of fact. ... Second, despite the fact that the supply-side faith has no grounding in reality, within the Republican Party there is little room for dissent on the subject, as Jonathan Chait details in his new book, “The Big Con.” Last week, the blogger Megan McArdle wrote that she had a book review for an unnamed right-wing publication spiked because in it she dared suggest that, in the U.S., tax cuts decreased government revenues.

The cynical explanation for the persistence of the supply-side dogma is that it’s simply cover for cutting taxes for the rich. But the supply-side orthodoxy has flourished for other reasons, too. To begin with, the absurd idea that tax cuts pay for themselves is based on an idea that is not at all absurd, which is that tax rates can have an impact on people’s behavior. Increase taxes too much, and people may work less ... and invest less..., and so the economy will grow more slowly. The opposite can happen if you cut taxes. (How much of an impact tax rates have ... is a subject of much debate in economics, but it’s inarguable that they do matter.) What supply-siders have done is start with that reasonable idea and extrapolate it to unreasonable lengths.

They’re aided in that extrapolation by the simple fact that the American economy grows over time. As a result, even if you cut taxes the federal government will eventually take in more tax revenue than it once did. And that allows supply-siders to fashion a spurious syllogism: taxes were cut in 2001, government revenues are higher in 2007 than they were in 2001, therefore the tax cuts increased revenue. The comparison that really matters in analyzing the impact of the tax cuts, of course, is ... the comparison between actual tax revenue in 2007 and what tax revenue would have been in 2007 had there been no tax cuts in 2001. And studies that make these types of comparisons—including one by Bush’s own Treasury Department ... find that government revenues would be greater had taxes not been cut. But that hasn’t stopped President Bush from claiming victory.

In one sense, of course, it’s odd that a Republican President should treat higher government revenues as a point of pride. Historically, after all, Republicans have been the party of small government...

The conservative pundit Larry Kudlow recently attacked the Republican candidates for failing, in their most recent debate, to explain what spending cuts they would advocate to accompany the tax cuts they propose. But Kudlow should hardly have been surprised, because supply-side rhetoric suggests that spending cuts aren’t really necessary. ... This tax-cut-and-spend approach is the promise of a free lunch, something that voters like to hear. The appeal of that promise may make it easier for politicians to run a campaign. But the fraudulence of the promise makes it awfully hard to run a government.

Update: Maybe I spoke too soon:

The Case of the Missing Surowiecki Column, by Felix Salmon: Memo to Jeff Bercovici: What's with Jim Surowiecki's column in this week's New Yorker? It's right there on the website – complete with no fewer than nineteen hyperlinks. (Someone give this guy a blog!) But it's in the "online only" section: if you pick up the actual magazine, it skips straight from the Talk of the Town section to the feature well, which means that Surowiecki's "Financial Page" is a page only in metaphor.

The most charitable explanation I can think of is that the New Yorker decided the column was simply too reliant on its hyperlinks to work in print. But if that's the case, why didn't they just ask Surowiecki to write a different column, or to rewrite this one so that it worked in print form? ...

I can't remember Surowiecki ever being banished from the print edition like this before, which is why it's so bittersweet to read this, from Mark Thoma:

I am very pleased to see this, and not just because there's a link to this site. I've been frustrated with the press on the 'Laffer curve, tax cuts have paid for themselves' issue because the press has enabled a big lie. It's a lie Republican candidates, even the president, can still repeat with very little attention from the mainstream media. No matter how often reputable economists on the right and the left have said this is a lie, the press has ignored it and allowed it to continue unquestioned.

He's writing, of course, about Surowiecki's column, which is about supply-side economics. And it turns out that the one time he singles out "the press" for praise in exposing the lie is also the one time that the article remains unprinted by any physical press.

Oct 19, 2007

"Debunking Myths Can Backfire"

FactCheck.org wonders if debunking false and misleading claims does more harm than good:

Cognitive Science and FactCheck.org, or Why We (Still) Do What We Do, by Joe Miller, FactCheck.org: Have you heard about how Al Gore claimed to have invented the Internet? What about how Iraq was responsible for the attacks on the World Trade Center? Or maybe the one about how George W. Bush has the lowest IQ of any U.S. president ever? Chances are pretty good that you might even believe one (or more) of these claims. And yet all three are false. At FactCheck.org our stock in trade is debunking these sorts of false or misleading political claims, so when the Washington Post told us that we might just be making things worse, it really made us stop and think.

A Sept. 4 article in the Post discussed several recent studies that all seemed to point to the same conclusion: Debunking myths can backfire because people tend to remember the myth but forget what the debunker said about it. As Hebrew University psychologist Ruth Mayo explained to the Post, “If you think 9/11 and Iraq, this is your association, this is what comes in your mind. Even if you say it is not true, you will eventually have this connection with Saddam Hussein and 9/11.” That leaves myth busters like us with a quandary: Could we, by exposing political malarkey, just be cementing it in voters’ minds? Are we contributing to the problem we hope to solve?

Possibly. Yet we think that what we do is still necessary. And we think the facts back us up.

The Post story wasn’t all that surprising to those who follow the findings of cognitive science research, which tells us much of our thinking happens just below the level of consciousness. The more times we hear two particular bits of information associated, for example, the more likely it is that we’ll recall those bits of information. This is how we learn multiplication tables – and why we still know the Big Mac jingle.

Our brains also take some surprising shortcuts. In a study published in the Journal of Personality and Social Psychology, Virginia Tech psychologist Kimberlee Weaver shows that the more easily we recall something the more likely we are to think of it as being true. It’s a useful shortcut since, typically, easily recalled information really is true. But combine this rule with the brain’s tendency to better remember bits of information that are repeated frequently, and we can run into trouble: We’re likely to believe anything we hear repeated frequently enough. At FactCheck.org we’ve noted how political spin-masters exploit this tendency ruthlessly, repeating dubious or false claims endlessly until, in the minds of many voters, they become true. Making matters worse, a study by Hebrew University's Mayo shows that people often forget “denial tags.” Thus many people who hear the phrase “Iraq does not possess WMDs” will remember “Iraq” and “possess WMDs” while forgetting the “does not” part.

The counter to this requires an understanding of how it is that the brain forms beliefs.

Continue reading ""Debunking Myths Can Backfire"" »

A Unified Voice is Not Always a Good Thing

They're already bigger than they ought to be, but Big Media wants to get even bigger and FCC chairman Kevin Martin is doing his best to quietly aid and abet the cause:

Stopping the press barons, by Robert McChesney, Guardian: Yesterday, the New York Times revealed that Federal Communications Commission (FCC) chairman Kevin Martin is rushing through a plan to rewrite media ownership rules by the end of the year, making it possible for the biggest media companies to continue their march toward consolidation. And he's doing it without giving the public a fair chance to respond.

The FCC under then-chairman Michael Powell tried to do this in 2003, and nearly 3 million people rose up in protest. This massive public outcry forced ... the agency back to the drawing board. But in a move that even Powell calls "courageous," Martin is trying to quickly and quietly ram through this massive giveaway before the Bush administration leaves office. ...

During his tenure at the FCC, Martin has consistently gamed the regulatory process - hiding research, leaking sensitive information to industry lobbyists, pushing forward a biased research agenda and making critical decisions in secret - while putting up an official façade of proper procedure.

Fortunately, some members of Congress have had enough of this regulatory subterfuge. Democratic senator Byron Dorgan of North Dakota ... teamed up with Mississippi Republican senator Trent Lott in a letter warning Martin to "slow down" and "proceed with caution."...

These senators prove that media is not a left-right issue, but one of concern to people from all walks of life. It is simply unacceptable for a self-governing people to tolerate any public policies that reduce the diversity of opinion in our democracy. ...

Americans ... frustrated by what is happening to news and journalism in this country ... witness every day how celebrity nonsense, talking head shouting matches and glorified stenography dominate the news.

The poverty of news content is not the fault of work-a-day journalists - among the most hardworking people on the planet. The problem sits squarely on the shoulders of public policies that make it good business to form massive media conglomerates whose mission is to cut costs, shed reporters and reduce output to the lowest common denominator.

But when the spotlight is put on the process, the public interest always wins. It is why corrupt insiders work so hard to keep the policymaking process hidden behind closed doors, and then try to pollute public discourse with the most outrageous, misleading propaganda.

Media ownership is a citizen issue of urgent importance - consolidation is a one-way street and there's no turning back. Rich media equals poor democracy.

You can't take your eyes off Bush appointees even for a moment, can you? We need more competition in this industry, not less, that's pretty clear.

Oct 10, 2007

"His Writing Often Makes Me Cringe"

Jagdish Bhagwati says contrary to what you might hear, "free trade is alive and well among economists":

The free trade perspective lives on, by Jagdish Bhagwati, Commentary, Financial Times: Turn to the leading US newspapers these days and you will read about the ... “loss of faith”... in free trade by economists. Many write about free trade in funereal overtones. Yet... The truth of the matter is that free trade is alive and well among economists. ...

Such media stories ... have been recurrently written in the past 20 years. There have been three episodes in recent years when false notes of alarm were sounded over free trade.

The most striking dissent over free trade, the equivalent of a category five storm, came from Paul Krugman. He extended the theory of imperfect competition to international trade and began to argue in the late 1980s that “free trade was passé after all”. The effect on the media, and on the opponents of free trade, was electric, largely because the rise of Japan, and the allegations that it was protectionist...

Mr Krugman was right at the level of theory..., imperfect competition among producers could undermine the case for free trade... But eventually Mr Krugman and other trade economists came back to free trade, abandoning [protectionists]... to twist in the wind. Some returned to the fold by saying that ... the product market imperfections were, on empirical investigation, not substantial enough to warrant departing from free trade. Others, Mr Krugman among them, bought into the conservative argument that protection in practice would make matters worse, not better.

The protectionists who had celebrated Mr Krugman as their icon were disappointed, even furious...

[T]he rise of India and China would lead to another category five storm. This time, it came from the Nobel laureate, Paul Samuelson. Writing in ... summer 2004..., he argued that the advocates of globalisation were ignoring the reality that the rise of India and China would mean that the welfare of the US could take a hit. ... But, Mr Samuelson was careful to note that this did not mean that ..[we] should respond by shutting off trade: that would only deepen the anguish.

Yet the protectionists thought that they had another icon ... in their camp...; and there were numerous stories again in the media.... As the truth of the matter became manifest in the media, with many trade economists challenging the self-serving distortions by protectionists, the free trade consensus was again seen to be robust and the protectionist buzz died down.

But then the US media went back to the well for a third time when the macroeconomist, Alan Blinder, published an essay in ... April 2006... that bought into the line that outsourcing of services via the internet would increasingly export American jobs to other countries and imperil the US and its working and middle classes. So he was now the new icon for the protectionists. ...

Mr Blinder, when challenged, shifted ground to arguing that, as services became tradeable online, the number of jobs that would become “vulnerable” would rise pari passu, requiring adjustment assistance. However, there is hardly any serious trade economist who has objected to providing adjustment assistance. ...

Mr Blinder, who started talking poetry, has therefore wound up talking prose. We free traders have no problem with him as he backs into our corner. But if he is to remain the new icon for those who oppose free trade, they have to be pretty desperate.

Apparently those were happier times for Paul Krugman:

What makes me happy: So, I was teaching one of my classes..., and somehow the subject veered off into monetary policy and the lessons of Japanese experience ... in the 90s.

And one of my students said, “You look so happy!”

It’s true: back in the 90s, when I was writing about Japan’s liquidity trap and other overseas problems, were good years. My own country was governed by responsible people; we were actually having policy discussions based on intelligent, if differing, viewpoints. The truth is that I don’t like having to do what I do in the Times, pointing out lies and corruption all the time. I wish we were having a civilized discussion. But we aren’t.

Here is Dani Rodrik's reaction to Jagdish Bhagwati's column:

Bhagwatian rhetoric: Jagdish Bhagwati is a sweet and courteous man in private, but his writing often makes me cringe. That is not because I frequently disagree with him, but because of the rhetoric he uses to attack his intellectual opponents. It's as if he has an evil twin that sometimes takes control of his writing hand. Recent example in point: his op-ed in the FT where he takes Alan Blinder to task for what Bhagwati claims is Blinder's about-face on trade. "We free traders," Bhagwati writes, "have no problem with him as he backs into our corner."

"We" free traders? "Our" corner? If you wanted evidence that orthodox trade economists form an exclusive club and speak in a single voice, could you get any better than this?

And Blinder "backs" himself into a corner? Am I the only one who thinks that Bhagwati's language does not aid his cause?

I've asked the same question about William Easterly's writing. If he is writing to other economists, I think Dani is correct, this may not be the best way to make friends and influence people. And it sounds like Jagdish is "a sweet and courteous man" when discussing issues with colleagues.

But if your audience is much wider than economists and largely includes people who are unfamiliar with names like Blinder and Samuelson, I'm not sure the same cringe factor is there. It's different when the people are unknown, just names in a newspaper column, and for most of the audience that's all they are. He is telling the world about economists and trying to convince them that his view, the free trade view, is correct and widely supported in the profession. His words have to somehow stand out and be noticed amid all the information people are bombarded with daily. I don't know for sure what style is best, what allows a voice to be heard above all the others, and maybe my view is shaped by the fact that I don't think I'm aggressive enough for the most part (though there is that Laffer curve thing), but I'm not convinced that this approach is as detrimental to his cause as Dani is.

I'm not saying I don't wish we were having civilized discussions all the time, I do, I'm just not sure that's the best way to get the word out and prevail in today's "he said-she said" media environment. But in any case, this is something Paul Krugman hears a lot too and I think Dani's question about what it takes to be effective at persuasive communication in the media is a good one.

Oct 05, 2007

Newspapers in the Digital Age

Way back in ancient times when I was a kid, TV came to your house through an antenna on the roof. Watching TV wasn't free, of course, you had to buy a TV, the antenna (and maybe a fancy device to turn it toward the signal), but you didn't have to pay for the signal itself. TV stations made money by embedding advertising in the signal so that watching TV meant watching the ads too, and the more people that watched a show the more money that could be charged for advertising during the broadcast.

I've been wondering why newspapers and other print media don't follow a similar model with blogs. If you go to, say, YouTube or Google video, for bloggers using standard software it's pretty easy to post a video on your blog. You click on a button, enter the name of your blog, give it the password, a title, and some text, and it posts to your blog automatically. It's really easy (and you can get the computer code as well if you prefer, as I do, to post things yourself).

Why don't newspapers and magazines do this, but embed ads in the articles just as ads are embedded in TV programs? Suppose you see an Op-ed you want to post on your blog. Just as with YouTube or Google video, there could be a button at the bottom of each article to push to post the article to your blog. In the article, or beside the article in the sidebar, ads would appear (my preference would be to give up sidebar space for Google style ads that run beside the article). The agreement would be that you can run the articles freely so long as the ads are there.

This seems to have lots of advantages. Newspapers would increase their circulating substantially as their articles went out to all the blogs, and since the ads would accompany the articles their ad revenue ought to increase. People running blogs would have free access to content without worry about copyright, etc., allowing them to collect information from various publications and specialize in particular topics (e.g. economics). Newspapers would, essentially, be like TV stations of old and blogs would play the role of TVs (though with more specialization) and receive and show the content along with the embedded ads.

What am I missing about the economics that would make this infeasible?

Sep 30, 2007

Ben Stein Watch: The Inaugural Edition

Ben Stein has Felix Salmon so upset that he has lost track of what month it is. I have to admit that I didn't actually read Stein's column, and still haven't, thereby avoiding a similar fate:

Ben Stein Watch: October 30, 2007, by Felix Salmon: I'm a uniter, not a divider. I'm a lover, not a fighter. I don't like to engage in the politics of personal destruction. But as Jonathan Landman might say, we have to stop Ben Stein from writing for the Times. Right now. And so, by popular demand, the first weekly Ben Stein Watch.

Stein uses his column this week to ask a question: "Is It Responsible to Shun Military Contractors?". Stein is a believer that investing isn't just about money:

I certainly believe in socially responsible investing for myself. I sold my tobacco shares long ago. (They have done fantastically well since then, but I don't regret my decision.)

Unfortunately, Stein doesn't tell us why he sold his tobacco shares. So we're going to just have to take a wild guess: maybe it's because cigarettes kill people?

Yet somehow Stein just can't comprehend why some socially responsible investors don't want to invest in arms manufacturers. "I don't understand this whole attitude," he writes. "Maybe someone can explain it to me."

Here, Ben, let me try, in words of one syllable:

Guns and bombs kill people.

Oh, damn, "people" is two syllables.

But let me rewind, to the very first sentence of Stein's column:

Henry Blodget should have started out as a writer.

I might point Stein to the second sentence of Blodget's wikipedia page:

Blodget received a Bachelor of Arts degree from Yale University and began his career as a freelance journalist and was a proofreader for Harper's Magazine.

Sigh....

Stein finishes up his column seemingly asking the SEC to regulate everything that absolutely anybody might conceivably invest in. He doesn't claim that this massive expansion of regulatory responsibilities would do any good, mind you; he just ends his column, cryptically enough, by saying that "the ladder of law should have no top and no bottom." It's a Bob Dylan lyric which Stein obviously loves, since this is the second time this year he's trundled it out.

So here's my idea. Since Stein clearly isn't being featured in the business section on the grounds of his economic expertise, he's obviously got this gig on the grounds of his celebrity status. Maybe the Times has no desire to replace Stein with someone (like DeLong, say) who actually knows what he's talking about - what they want is a writer who's vaguely familiar with economic concepts but who's also something of a household name. My suggestion: Bob Dylan.

Sep 20, 2007

Are You Journalists or Theater Critics?

Paul Krugman gives us a taste of what is blog will be like:

What I Hate About Political Coverage, by Paul Krugman: Warning: this is a bit (actually, more than a bit) of a rant.

One of my pet peeves about political reporting is the fact that some of my journalistic colleagues seem to want to be in another business – namely, theater criticism. Instead of telling us what candidates are actually saying – and whether it’s true or false, sensible or silly – they tell us how it went over, and how they think it affects the horse race...

There are two big problems with this kind of reporting. The important problem is that it fails to inform the public about what matters. ... The other problem, which has become very apparent lately, is that this sort of coverage often fails even on its own terms, because the way things look to inside-the-Beltway pundits can be very different from the way they look to real people.

Which brings me to the Petraeus hearing.

To a remarkable extent, punditry has taken a pass on whether Gen. Petraeus’s picture of the situation in Iraq is accurate. Instead, it was all about the theatrics – about how impressive he looked, how well or poorly his Congressional inquisitors performed. And the judgment you got if you were watching most of the talking heads was that it was a big win for the administration – especially because the famous MoveOn ad was supposed to have created a scandal, and a problem for the Democrats.

Even if all this had been true, it wouldn’t have mattered much: if the truth is that Iraq is a mess, the public would find out soon enough, and the backlash would be all the greater because of the sense that we had been deceived yet again.

But here’s the thing: new polls by CBS and Gallup show that the Petraeus testimony had basically no effect on public opinion: Americans continue to hate the war, and want out. The whole story about how the hearing had changed everything was a pure figment of the inside-the-Beltway imagination.

What I found striking about the whole thing was the contempt the pundit consensus showed for the public – it was, more or less, “Oh, people just can’t resist a man in uniform.” But it turns out that they can; it’s the punditocracy that can’t.

"To a remarkable extent, punditry has taken a pass on whether Gen. Petraeus’s picture of the situation in Iraq is accurate." We'll hear a lot more about whether the evidence in the OJ trial is accurate than we'll ever hear about the accuracy of the evidence that Petraeus presented in his testimony. That's pretty sad.

Sep 16, 2007

What Did Greenspan Say and When Did He Say It?

[Originally posted April 26, 2005] Yesterday, in this post, I discussed a Washington Times editorial attempting to absolve Alan Greenspan of responsibility for playing a role in promoting tax cuts that led to the current budget deficit. Quoting from the editorial:

Mr. Greenspan told Mr. Sarbanes that the charge was "frankly unfair" because it neglected the Fed chairman's unambiguous endorsement of "trigger" mechanisms during the same testimony. "I advocated tax cuts" in 2001, Mr. Greenspan acknowledged Thursday, "but I also advocated triggers in the same testimony."

Did he advocate triggers? While that term is not used directly in his testimony, it is used in a CBS report noted below, the only report I could find explicitly discussing spending restraint mechanisms, and Greenspan does say:

… In recognition of the uncertainties in the economic and budget outlook, it is important that any long-term tax plan, or spending initiative for that matter, be phased in. Conceivably, it could include provisions that, in some way, would limit surplus-reducing actions if specified targets for the budget surplus and federal debt were not satisfied. Only iaf the probability was very low that prospective tax cuts or new outlay initiatives would send the on-budget accounts into deficit, would unconditional initiatives appear prudent. … Indeed, the current economic weakness may reveal a less favorable relationship between tax receipts, income, and asset prices than has been assumed in recent projections. … But the risk of adverse movements in receipts is still real, and the probability of dropping back into deficit as a consequence of imprudent fiscal policies is not negligible.

But let me end on a cautionary note. With today's euphoria surrounding the surpluses, it is not difficult to imagine the hard-earned fiscal restraint developed in recent years rapidly dissipating. We need to resist those policies that could readily resurrect the deficits of the past and the fiscal imbalances that followed in their wake.

In my view, he does add quite a bit of caution regarding slipping back into large deficits, cautions that, as noted below, were not reported widely in the press. So, as far as it goes, the Washington Times editorial is correct.  He did talk about mechanisms to restrain spending and warned about the return of deficits.

However, it is also my view that this does not absolve him of responsibility. ... He knew that a zero budget target ... would create deficit problems in the future, but he did not protest. ... From the time of Greenspan’s testimony on January 25, 2001 until now, the press has missed what Greenspan was really talking about. He was afraid of a large surplus building up and the effect that would have on the private market when the government invested the large surplus in the private sector. To avoid this problem, his solution was to accumulate the Trust Fund surplus in private accounts so that individuals rather than the government would participate in the private market, and to cut taxes. At the time, Krugman stated in a column in the NY Times:

Some people — including, alas, Alan Greenspan — have made it seem as if any purchase of private-sector assets by the trust funds would instantly politicize the financial markets and undermine the foundations of the free-enterprise system. But that's ideology, not analysis; people who have looked seriously at the issue think that these concerns are vastly overblown. There are well-established techniques for protecting government investment accounts from political meddling, such as legal requirements that the funds buy a broad index. Are these techniques imperfect? Maybe — but who would argue that rather than running some slight risks of politicizing the markets, we should squander the money that was supposed to pay for our retirement?

Only a politician with an irresponsible tax cut to sell.

However, when the economy began slipping into deficit and the Trust Fund assets were evaporating, Greenspan did not protest, and importantly, neither did the press.

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Sep 01, 2007

It's Always a Mistake

This is Brad DeLong's fault. In reference to a Larry Kudlow article he said:

It is always a mistake to surf over to National Review. Always.

So, of course I had to go see what Larry Kudlow said to generate Brad's comment.

Continue reading "It's Always a Mistake" »

Aug 09, 2007

Bruce Bartlett: Talking Heads

Bruce Bartlett on "talking heads" in the news media:

Talking Heads, by Bruce Bartlett: In this morning's Wall Street Journal, my friend Brian Wesbury complains about the "talking head" culture on business television where every interview seems designed to provoke debate. If one of the guests is a bull, Brian says, then the other has to be a bear. If there is only one guest, he says, the interviewer generally plays Devil's advocate.

The result, Wesbury says, is that viewers are often misled into thinking that there is a great deal of disagreement among economists when in fact there may be a virtual consensus. By seeking out a few incompetents or cranks just to have "balance" and create sparks, news shows may be unintentionally misleading viewers by implying that isolated views that are well outside the mainstream actually have validity. ...

This is a pet peeve of my own and a reason why I avoid these sorts of programs. One thing that annoyed me particularly was that the producers would often put me up against some total nobody who had no clue about what he was talking about. In one case--I kid you not--I debated the minimum wage with an honest-to-God, fresh-off-the-streets homeless person. I refused to ever appear on that channel ever again and it eventually went off the air. ...

I don't mind debating those whose views are diametrically opposed to mine. In fact, I enjoy a good debate... I know that we can probably agree on the facts and will argue along predictable lines. But too many producers find such sober discussions to be boring, so they try to liven things up by setting up debates with people who make up their own facts, argue illogically, make no effort to be consistent, and, too often, use up most of the alloted air time. Thus you end up wasting your own time refuting the other guy's errors rather than making your own points.

This is not an ideological problem. I know that my friends on the left are just as frustrated by the system as I am. And the problem is not isolated to economic discussions but extends into every area of news...

I have noticed that over the years there has been a dumbing-down of the talking heads. Whereas previously the two heads would belong to noted experts from respected institutions, today they are more likely to be labeled "Democratic consultant" or "Republican strategist." These people are often so obscure that when I do a Google search on them there is no evidence that they even exist.

I know that the artificial debate format is not going to go away. But maybe it would be possible for the networks to encourage those conducting the interviews to be a little more proactive when one of the guests goes off on a tangent or makes outrageous claims with no factual basis. They should behave more like baseball umpires than boxing referees who just want to keep it clean.

I am not sure what the right answer is. The false, misleading ideas driven by politics, ideology, pursuit of profit, etc., are out there looking for a place to express themselves, and forums such as talk shows and opinion pages are a key place where that occurs. One hope is that news agencies, talk shows, and so on will not invite people on the air or print their views if they are not credible brokers. But that requires the news agencies actually knowing the difference, to understand the underlying theoretical and empirical evidence, and that seems to be a big hurdle. It also requires them to look beyond ratings and entertainment value, which is understandably difficult. It's a hurdle they should be able to get over, credible and entertaining are not mutually exclusive, but don't seem to be able to. I think a lot, or at least some of the "he said-she said" journalism (particularly in print) is not for "balance" for the sake of balance, where balance here means a view from two sides, but rather it's because the reporter does not have any idea which side is correct and tries to cover all the bases.

So the question for me is, if these ides are going to be expressed one way or the other, then what's the best way to rebut them? Do we refuse to go on shows, call reporters idiots, and generally make their lives as miserable as possible from blogs, etc. in the hopes of changing their behavior, i.e. in the hope they won't invite these people on their shows or present their views in their stories? Do we give these ideas credibility by simply engaging with the people who are promoting them, or does engaging show the problems with their arguments and undermine their positions?

I think these people are going to appear in the the media one way or the other and I am more likely than Bruce to advocate an active role in trying to rebut them. It's a fine line - I often don't engage with things I see because shining a light on the views gives them an audience, and I don't want to do that. But if it's an idea I see a lot, or if it's from a person who has been pushing nonsense repeatedly, then I am likely to react, perhaps more so than Bruce. I see no need to debate someone literally dragged off the street as in the story above, but there are people and ideas that do require rebuttal no matter how annoyed I am that they are even in the public discourse.

Aug 06, 2007

Not Laffing

Mathew Yglesias notes the press's failure to challenge false statements about tax-cuts made by Giuliani in the GOP debate:

Laffer Press Roundup, by Mathew Yglesias: Here's an interesting test case for the press. It seems that at yesterday's GOP debate, Rudy Giuliani derided the idea that higher taxes raise revenues as a "Democratic, liberal" assumption and put forward his alternative view that you generate revenue by lowering tax rates. This is a stunning confession of total ignorance of tax policy and economics by the GOP front runner. So how did the press cover it? Chris Cilizza at the Fix lives down to my expectations by totally ignoring the fact that Giuliani is incorrect:

"There is a liberal Democratic assumption that if you raise taxes, you raise more money," said Giuliani to huge applause from the crowd assembled at Drake University.

Michael Shear in The Washington Post's page A1 story also doesn't care about the merits of the issue:

Former New York mayor Rudolph W. Giuliani sparked loud applause when he declared that "the knee-jerk liberal Democratic reaction -- raise taxes to get money -- very often is a very big mistake."...

Nor does Stephen Braun of The Los Angeles Times care at all whether or not GOP tax policy makes sense:

Referring to last week's devastating bridge collapse in Minneapolis, the GOP rivals found common ground in insisting that increased private investment from cutting taxes would provide more money to repair the nation's failing infrastructure. ...

Mike Glover at the AP doesn't seem to mention the issue at all.

Adam Nagourney at The New York Times, by contrast, doesn't go nearly as far as I'd like, but does way better than his colleagues at the major papers. Here he is on the NYT political blog:

Mr. Giuliani proceeded to explain that when he was mayor of New York he had cut taxes, and that those tax cuts had produced revenues that allowed him to finance bridge reconstruction. (Actually, there’s a good argument that it was the stock market boom in New York that brought all that money into the city’s coffers, but we’ll let that pass for now).

And here he is teamed up with Michael Cooper in the print edition:

Mr. Giuliani said that as mayor of New York, he had increased revenues to pay for bridge and road repair by cutting taxes, thereby jolting the economy, and that he would do the same thing as president. The city’s treasury in that period was flush largely with revenues produced by the stock-market boom of the late 1990s.

It'd be nice to see reporters go further than Nagourney does here, but improvements at the margin deserve recognition and the Times is doing a much better job than the Post here.

Even Nagourney's "we’ll let that pass for now" is inadequate. Any reporter who thinks there's a debate about whether cutting taxes has increased tax revenues has not been paying attention and has no business covering economics. Let's take a cue from Paul Krugman and ask what the press should have asked, what does this say about Giuliani's character? First, I disagree with the characterization of his statements as ignorant. I don't believe he is ignorant about this topic, so that is no excuse (and if he were ignorant, i.e. if he has not bothered to find out about the consequences of tax cuts by now, that would tell us a lot too.)  He noted that he is aware of the evidence, but chooses to portray it as a "liberal Democratic assumption" even though it is nothing of the sort (see Andrew Samwick and Greg Mankiw's statements about this, both of whom served under Bush in the Council of Economic Advisers, or any reputable conservative economist for that matter, or this recent CBO report).

What this tells us is that just like George Bush in the run-up to the Iraq war, Giuliani is not an honest broker. He is willing to tell people what they want to hear in spite of compelling evidence to the contrary, and to surround himself with people who will not challenge him when he uses misleading statements to push a policy. He has no problem using dishonest statements to sell policy. There's a lot to be gleaned about his character from his willingness to engage in this type of dishonest salesmanship, a style of leadership that led us into our current predicament, and it's disappointing to see the press not even bother to make the connections.

Aug 01, 2007

Robert Samuelson's Three Beliefs

Someone said that Robert Samuelson thinks three things are true, deficits are bad, there's a demographic crisis coming, and both parties share the blame for any problem. Based upon these beliefs, he's been writing the same column in one form or another for many years. Notice, for example, how he weaves all three of these points into the opening of his latest column:

Making the Think Tanks Think, by By Robert J. Samuelson, Commentary, Washington Post: Just in case you haven't noticed, the major presidential candidates -- Republican and Democratic -- are dodging one of the thorniest problems they would face if elected: the huge budget costs of aging baby boomers. In last week's CNN-YouTube debate, New Mexico Gov. Bill Richardson cleverly deflected the issue. "The best solution," he said, "is a bipartisan effort to fix it." Brilliant.  There's already a bipartisan consensus: Do nothing. No one plugs cutting retirement benefits or raising taxes, the obvious choices.

End of story? Not exactly. There's also a less-noticed cause for the neglect. Washington's vaunted think tanks -- ... both liberal and conservative -- have tiptoed around the problem. Ideally, think tanks expand the public conversation by saying things too controversial for politicians to say on their own. Here, they've abdicated that role.

The aging of America is not just a population change or, as a budget problem, an accounting exercise. It involves a profound transformation of the nature of government: Commitments to the older population are slowly overwhelming other public goals; the national government is becoming mainly an income-transfer mechanism from younger workers to older retirees. ...

Consider the outlook. ... Social Security, Medicare and Medicaid -- programs that serve older people -- already exceed 40 percent of the $2.7 trillion federal budget. By 2030, their share could hit 75 percent of the present budget, projects the Congressional Budget Office.

These projections are daunting. ... Little wonder politicians stay silent. ... Wrenching honesty might be deeply embarrassing. Liberals might have to concede that government could grow too large and that spending and benefit cuts are needed. Conservatives might have to concede that, even with plausible benefit and spending cuts, tomorrow's government would be bigger than today's. For think-tank scholars, brutal candor might offend friends and political mentors. For the ambitious, it might jeopardize future appointments to top government jobs.

As an antidote to this timidity, I propose that some public-spirited sugar daddy (the MacArthur Foundation? Warren Buffett?) sponsor a short book. A possible title: "Facing Up to an Aging America." Six leading think tanks would be invited to participate: three liberal -- the Brookings Institution, the Center on Budget and Policy Priorities, and the Urban Institute-- and three conservative: the American Enterprise Institute, the Cato Institute, and the Heritage Foundation.

After an introduction describing America's aging, each think tank would receive 35 pages to respond to questions and to present its vision. Are the looming budget changes good for America? If so, how would they be financed? If not, why not? How could adverse consequences be avoided? The think tanks would be expected to be specific. Higher eligibility ages? Well, how much and when? Higher taxes? Which ones and how much? If a think tank rejected the invitation, the publisher would run 35 blank pages and an explanation: "Think tank X declined to participate."

This approach would force think tanks to compete. They'd have to make their vision of the future explicit within the untidy framework of government's past commitments. ... Writing for a general audience, it would favor plain English, not the usual technobabble. If published in April, the book might prod the presidential candidates to address the future. If they didn't, it would demonstrate the magnitude of their evasion.

If we are going to give think tanks an assignment coupled with a threat of bad press if they don't participate, let's have them work on the important part of the problem (there are other choices besides think tanks for such assignments). Social Security is not the problem, it won't take much to get it on solid footing, though the scare stories over the past several years have made many people believe otherwise (and Samuelson has helped to generate this false impression). The problem is not demographics either, though it certainly costs more to serve a larger number of people.

The main problem is rising medical costs, and unlike the misplaced emphasis on Social Security in the last election, there is a lot of focus on health care reform in the political debate this time around. Samuelson seems to have completely missed the connection between health care reform and his pet column peeve, hence his claim that the problem is being ignored in the political debate when that isn't the case. In addition, Samuelson's continual focus on the budget deficit obscures the real problem. It doesn't matter whether health care is in the public domain or the private domain, the costs will be daunting either way if they continue on their present trajectory, so finding ways to hold down health care costs is where the focus needs to be.

If Samuelson really wants to help, he can quit writing the same misleading and counterproductive column over and over again. Quit saying "cutting retirement benefits or raising taxes" are the "obvious choices" when it's not obvious at all. Cutting retirement benefits or raising taxes will do nothing to reign in health care costs so these measures do not address the main problem. It's time for Samuelson to write a new version of this column and address the core issues, or perhaps better yet, just stop writing about these issues altogether.

Jul 26, 2007

Traditional News vs. Opinion-Mongering

Traditional news is fading away?:

Make news, not views, by Dan Kennedy, Comment is Free: Don't cry for Paula Zahn. Her show on CNN's US network wasn't all that great, hardly anyone watched... But before her August 2 departure from the House That Ted Turner Built, it's worth pondering what she told Jacques Steinberg of the New York Times:

"We worked so hard to maintain a high quality of objective reporting on the air," she said. "Yet what has become clear when you look at the landscape, particularly in the eight o'clock hour, it seems pretty obvious the audience is drawn to opinion-driven shows. That is not what I do."

Zahn is right. There's less and less news on the three cable news channels - CNN, Fox News, and MSNBC - and that's especially true in the evening, when people might actually be watching.

Zahn had it particularly tough. In her 8-to-9pm time slot, she was up against ... Bill O'Reilly, Fox's loofah-wielding ratings king. MSNBC counters with cable's sole liberal host, Keith Olbermann. The entirely predictable result: Zahn's program is a distant third. ...

Rupert Murdoch's Fox News, which now dominates the market, offers one conservative talk show after another, with the sole exception of Shepard Smith's 7pm newscast. Even Special Report with Brit Hume (how can it be special if it's on every night?), hosted by an actual journalist, tilts noticeably to the right, while primetime hosts O'Reilly and Sean Hannity deal strictly in cartoonish stereotypes. ... Greta Van Susteren offers an hour's worth of tabloid trash before the O'Reilly rerun.

MSNBC's signature personalities are Olbermann and political shouter Chris Matthews...

CNN - the original cable news outlet, ... has done a little better. But its best-known host these days may be Lou Dobbs, whose attacks on illegal immigrants have made him an unlikely star... Larry King's talk show is non-ideological, but it's also non-news. At least the network continues to put on something resembling an actual newscast: Anderson Cooper 360....

CNN's once-sober sibling, Headline News, has gone on a bender with loathsome programs hosted by sob sister Nancy Grace and reactionary doofus Glenn Beck.

It wasn't always this way. Just a few years ago, CNN and MSNBC competed head-to-head with hour-long newscasts at 10pm... Since then, the success of Fox has clearly affected the competition. Opinion is cheaper than news, and apparently more popular, too. ...

The problem with all this opinion-mongering is that it contributes to cynicism about the news and the alleged biases of the folks who report it. ... Thus we have arrived at a point where even the horrors of, say, Abu Ghraib can be dismissed as little more than partisan sniping. ... If the cable news channels can't survive by bringing us, you know, news, then that's a pretty sad commentary.

When I still watched, I was never much impressed with Paula Zahn, partly because the way the show was structured, its "he said-she said" format allowed the impression to emerge that important issues are nothing more than partisan sniping. I stopped watching during the run-up to the last presidential election when there was far too much back and forth argument presented as journalism at a time when people needed much more than that from those responsible for making sense of the world. I remember sending an email to Zahn (which I doubt anyone read) asking why, after one guest had uttered what were demonstrable lies, the guest was invited back for another of CNN's "news" reports to offer more of the "other side," where the other side was nonsense. It didn't seem like there was anything an entertaining guest could say that would prohibit them from being asked to return. There also seemed to be a coziness or mutual reliance between Zahn and many of her guests, guests who were mostly the same mouthpieces recycled again and again on every issue, and the mutual dependence was more than you would hope for from an objective news source. It did not appear she was willing to take any chances, to risk ruffling any feathers by challenging even the obvious distortions, because that would risk access to the guests, those connected with the administration in particular, and potentially bring the scorn of the noise machine standing ever ready to protect its own.

I don't know the answer, it appears that the profit maximizing strategy, i.e. the business strategy that maximizes entertainment value, is not consistent with producing news and information that optimally serves the public interest. But I do know we are not well served by what we have.