Category Archive for: Press [Return to Main]

Friday, August 24, 2012

'Evidence vs. Ideology' and 'Romney’s Lying Machine'

Laura D’Andrea Tyson:

Evidence vs. Ideology in the Medicare Debate, by Laura D’Andrea Tyson, Commentary, NY Times: When formulating public policy, evidence should be accorded more weight than ideology, and facts should matter... The ... Romney campaign has been deliberately misrepresenting President Obama’s Medicare record.
Mitt Romney characterizes the $716 billion of Medicare savings over the next 10 years, contained in the Affordable Care Act, as President Obama’s “raid” on the Medicare program to pay for his health care program. This fear-mongering is simply untrue. These savings result from reforms to slow the growth of Medicare spending per enrollee – there are no cuts in Medicare benefits. ...
Both Governor Romney and Representative Paul D. Ryan have promised to repeal the Affordable Care Act and with it the reforms behind the $716 billion in Medicare savings (although Mr. Ryan duplicitously counts the savings from these reforms in his deficit-reduction plan). Medicare beneficiaries would ... lose the benefits..., and they would be forced to pay higher premiums and co-pays as a result of faster growth in Medicare costs.
President Obama’s health care plan is not a raid on Medicare; it is an investment in a stronger system. If the Affordable Care Act had not met this standard, the AARP would not have endorsed it. ...
Now Mr. Ryan has espoused – and Governor Romney has embraced — a proposal to transform Medicare into a premium support system. ... There is no evidence that such a system would control Medicare spending more effectively than the current Medicare program strengthened by Affordable Care Act reforms. Indeed,...the C.B.O. has concluded that ... such plans would drive up total health-care spending per Medicare beneficiary...
A voucher system would do little to control the growth of health care costs, but it would shift their burden onto Medicare beneficiaries in the form of higher premiums and reduced care. Cost-shifting should not be confused with cost containment. ...
A “serious” deficit hawk committed to saving and strengthening Medicare, not one whose primary goals are repealing health-care reform and cutting taxes for the wealthy, would base his Medicare plan on the evidence. ...

Robert Reich is astounded at the Romney-Ryan campaign:

Romney’s Lying Machine, by Robert Reich: I’ve been struck by the baldness of Romney’s repetitive lies about Obama — that Obama ended the work requirement under welfare, for example, or that Obama’s Affordable Care Act cuts $716 billion from Medicare benefits. ...
Every campaign is guilty of exaggerations, embellishments, distortions, and half-truths. But this is another thing altogether. I’ve been directly involved in seven presidential campaigns, and I don’t recall a presidential candidate lying with such audacity, over and over again. Why does he do it, and how can he get away with it?
The obvious answer is such lies are effective. Polls show voters are starting to believe them... Romney’s lying machine is extraordinarily well financed. ... Romney’s lying machine is working.
But what does all this tell us about the man who is running this lying machine? (Or if Romney’s not running it, what does it tell us about a man who would select the people who are?)
We knew he was a cypher — that he’ll say and do whatever is expedient, change positions like a chameleon, eschew any core principles.
Yet resorting to outright lies — and organizing a presidential campaign around a series of lies — reveals a whole new level of cynicism, a profound disdain for what remains of civility in public life, and a disrespect of the democratic process.
The question is whether someone who is willing to resort to such calculated lies, and build a campaign machine around them, can be worthy of the public’s trust with the most powerful office in the world.

The press is completely dropping the ball in its duty to inform voters (surprise!). If stories consistently opened up with something along the lines of "The Romney campaign continued to make lies and misleading inferences the centerpiece of its campaign today...," this would stop. (It would also be worth noting, I think, that making lies about the other side the most prominent feature of a campaign is a pretty good indication that the candidate has no new ideas of his own to present. But simply pointing out the lies -- and the massive number of flip-flops of convenience -- would go a long way toward fulfilling the duty of the press to inform voters rather than mislead them by presenting false claims as legitimate debate.)

Wednesday, May 30, 2012

Economic Dark Ages?

Stan Collender is driven to shrillness:

Is This The Economic Dark Ages In The U.S?, by Stan Collender: ...a behavior -- bald-face lying --... has become so blatant and commonplace among Republican policymakers on economic issues that any one of them who is even slightly honest and candid now would be both an absolute rarity and a welcome relief.
And the fact that the GOP lying about the economy...and especially the budget...is so accepted and expected means that any Republican who wasn't jump-the-shark ridiculous on these issues wouldn't be allowed to stay in the party much longer. ...
House Speaker John Boehner (R-OH) ... easily qualifies as the weakest and least effective Speaker in my lifetime and has to be included on the list of the all-time worst in U.S. history, demonstrated yet again that he'll say and do anything to stay speaker even when what he's saying about the budget can easily be shown to be nonsense and when he knowingly and without giving it a second thought  threatens the well-being of the U.S. economy.
I'd say this doesn't bode well for the outcome of this year's federal budget debate, but that's both obvious and an understatement. It actually points to the a period in U.S. history that is very likely to be labeled by historians as its economic dark ages.

I think that reporting on economic issues has improved, and that blogs have something to do with that. But when it comes to political reporting on economic (and other) issues, it's just as disappointing as ever. If there's no reputational or other costs associated with this behavior, why stop?

Sunday, April 15, 2012

Turmoil in the Daily Newspaper Business

David Warsh on the viability of the newspaper business:

The Daily Melody, Economic Principals: Turmoil continues in the daily newspaper business. The once-mighty Philadelphia Inquirer was sold last week for a paltry $55 million. The Denver Post decided to put its proprietary local news on the front page and move its commodified national items to the second section. And another hopped-up hedge fund operator explained to gullible Forbes readers why The New York Times “as we know it” would disappear by 2015. (How do I keep track of this stuff?  Like everyone else interested or involved in the industry, I read Jim Romenesko.)

Newspaper publishers should think a little harder about the distinction between searching and browsing.  Leon Wieseltier framed the distinction nicely the other day in Going to Melody, a poignant little essay in The New Republic about Melody Records, an old-fashioned music store near Dupont Circle in Washington.,D.C., that had gone out of business.

Wieseltier was bereft. For thirty years, he had regularly prowled Melody Record’s aisles, looking for new releases, schmoozing with its knowledgeable clerks, discovering items of chamber music and jazz he otherwise might not had known existed, defending his affection for Rihanna. His visits had been motivated not so much by acquisitiveness, he wrote, but by inquisitiveness.  He went “to engage in the time-honored intellectual and cultural activity known as browsing.”   He elaborated:

Continue reading "Turmoil in the Daily Newspaper Business" »

Sunday, March 11, 2012

Who Is More Likely to Survive the Digital Age, The Washington Post or The New York Times?

Which newspapers are most likely to survive?:

She Who Fights and Runs Away…., by David Warsh: For 150 years, daily newspapers have been suppliers of real-time narrative to industrial democracies around the world. They no longer enjoy readers’ undivided attention — but then they didn’t for most of that time. First magazines, then radio, newsreels, television, and recently the Web cut sharply into their mindshare, periodically unsettling but not displacing newspapers in the hierarchy of authority.

Recently the advent of search advertising has cut real newspaper revenues, perhaps in half, for many years to come. Yet print newspapers are still the way we establish the horizon of day-by day events. Because of their nature – daily, finite, permanent, and convenient – they are likely to remain the source of this baseline for years to come.

So pity The Washington Post, right? ... Vanity Fair last week published an article about retrenchment at the paper, “Ghosts in the Newsroom.” In it, Sarah Ellison wrote,

The desire to compete as a journalistic enterprise on a national or international level – to do so comprehensively and consistently – seems to have been beaten out of the Post. The disaffection on the newsroom floor is audible and undisguised.

The deeper situation at the Post is probably just the reverse. You wouldn’t have thought it possible that a seasoned reporter like Ellison (who once covered the newspaper industry for The Wall Street Journal) could write about a newspaper without discussing Google and the invention of search, but that is Vanity Fair for you, the journal of choice for nostalgia buffs.

The Post is clearly moving to preserve its independence. It is the Times which seems at risk, thanks to a go-for-broke strategy.

The news business is turning into a race among old champions and new entrants, more quickly than most people realize. In the last few years, Bloomberg and Thomson, both data-base businesses, have moved into news in a big way. Bloomberg, which started life as a library of bond prices, built its 2,000-person news service from the ground up over the last twenty years. Thomson, which began life in 1934 with a single Canadian newspaper, grew to a chain that included the Times of London, before getting out of the newspaper business altogether, in order to invest in financial services and legal publishing, Ten years later Thomson came roaring back into the news business through the purchase of the similarly extensive Reuters service. (A somewhat fuller account is here.)

Michael Bloomberg and David Thomson are each worth around $20 billion – perhaps a dozen times more than all the Sulzbergers (of the Times) and Grahams (of the Post) put together. Both companies have gone on hiring binges recently, luring top reporters with promises of unspecified glories yet to come, signaling their intention to enter the mainstream business one way or another. David Thomson has told his editors that he wants Pulitzers, and, presumably, so does Michael Bloomberg, currently in his third and last term as Mayor of New York. Proclaiming a new editorial approach is merely the first step As Michael Wolff pointed out the other day, the Financial Times, now owned by the publishing conglomerate Pearson, is probably the next big paper to go on the block. The New York Times’ market capitalization is about $1 billion, that of the Post about $3 billion.

What are the newspapers doing about maintaining their independence? The Post has been cutting costs and buttressing its unassailability. Warren Buffet, a long time investor to the company, took Ellison to lunch to explain the logic of a “moated business”: a profitable one upon whose territory others can’t encroach. What the Post has going for it is a large and prosperous local market. He might have added that a high penetration rate – many people read it, thanks to relatively low prices – keeps advertising rates relatively high. Add to that an intelligent and resolute chief executive, Katharine Weymouth, granddaughter of the legendary publisher Katharine Graham. It just lacks the dominant advertising monopoly it once enjoyed – and the swagger that accompanied near-monopoly profits. Logic says that once its costs are brought in line, the Post should be nicely profitable again, and other geographical franchises – Los Angeles and Chicago in particular – should eventually be strong as well.

The Times often seems to be doing just the reverse. As a national paper in competition with the WSJ, it has many close substitutes, among readers and advertisers alike. Its strategy seems downright reckless: keep staffing high, expand various sections, price aggressively (a daily paper costs $2.50, vs. $2.00 for the WSJ), and deepen the Web presence.. Late last year chairman and publisher Arthur O. Sulzberger Jr. unexpectedly propelled chief executive Janet Robinson into an early retirement, paying her nearly $24 million, according to a proxy statement mailed last week – apparently to assure her silence. The company sold its regional papers a few days later.

If these were the only considerations, you would have to admire the Times’ digital daring. Its website is superb. Its desire to compete as a journalistic enterprise on a national or international level is as strong as ever. And the daily newspaper itself, as former executive editor Bill Keller said the other day, is what it is – a glorious aspiration, never quite achieved, against which all other efforts must be judged.

It is the revenue stream that is lacking. The Times hasn’t paid a dividend since December of 2008. Its stock is selling for around $6 a share. (The Post, with about a twentieth as many shares, closed at week at $387. It pays a $9.80 dividend.) ... The Sulzberger cousins are not the Bancrofts, who sold the Wall Street Journal to Rupert Murdoch; a sense of public trust is in their DNA. But neither can the cousins afford to own and operate their newspaper for free.

The owners of the Post have shown that they know what they must do to survive; in scaling back their ambitions, they may maintain their autonomy. (I am leaving its Kaplan Inc. educational services subsidiary for another day.) The Times has expanded instead of prudentially cut back. They are living on moonbeams. The golden age of newspapers is definitely over. The exciting days of a great transition have begun.

Saturday, January 14, 2012

National Security Spending, Not Entitlements, "Run Amok"

Once again, Jeff Sachs takes on the editorial page of the WSJ and tries to expose the "big lie of our time" (or one of them anyway):

How the Wall Street Journal Misleads About Federal Jobs, by Jeff Sachs: The editorial board of Rupert Murdoch's Wall Street Journal has a simple game. They want to cut taxes for the rich and government services for the rest, and end regulations of banks and the environment. They support taxpayer-financed bailouts of Wall Street when needed. They will twist any facts in the service of these goals.
Today's lead editorial, with its graph of "Obama's Growing Payroll," is a perfect example... The gist of the editorial is that Obama is presiding over a massive increase of government, exemplified by the surge of civilian employees. The graph shows a striking rise of federal employment from around 1.875 million in 2008 to 2.1 million in 2011. (I reproduce this as Figure 1 below).
The Journal neglects the fact that today's 2.1 million workers is actually identical to the number of Federal employees in 1981 at the start of the Reagan Administration, 1989 at the end of the Reagan Administration, and 1993 at the end of the Bush Sr. Administration. The numbers went down slightly after that ... with a decline in Defense Department civilian employees, a decline that was probably offset by the rise of private defense contractors (not included in the OMB tables). There is no long-term trend at all. (I show this as Figure 2 below).
The Journal endlessly tries to portray the "growth of government" as a social welfare system run amok. The editorial implies that President Obama is repeating LBJ's Great Society by building up giant welfare and regulatory programs reflected in the "boom" of federal employment. But where did this so-called "boom" (actually a tiny boomlet) actually appear? In Great Society programs? In entitlements?
No, the increase in employment is mainly in national-security-related employment: the military, homeland security, and justice (including prisons, FBI, drug enforcement, and the like). Welfare and entitlements programs little to do with it. If we parse the increase of 225,000 federal jobs between 2008 and 2011, three-fourths came in the Defense Department (+84,000), Homeland Security (+28,000), Justice (+13,000), and Veteran's Affairs (+45,000).
Of course the Journal's entire argument is ... a red herring, since the increase of 225,000 jobs represents all of 0.0017 of U.S. non-farm employment of 131 million workers. The entire federal civilian workforce is a mere 1.6 percent of the total non-farm employment. The Journal is taking tiny fluctuations and making them into a federal case, so to speak, for its propagandistic purposes.
The actual fact of relevance is that the federal government has been declining as a share of national non-farm employment, from 2.3 percent in 1981 to 1.6 percent in 2011. ...
The big lie of our time is that the federal government is expanding out of control. ... For government services that count for the 99 percent, the federal government is shrinking, alas, no matter which phony figures the Wall Street Journal throws our way.

Saturday, November 19, 2011

Both Parties are Equally to Blame Even When They're Not

No matter how much the Democrats give up in negotiations, the media still accuses them of refusing to compromise:

Supercommittee Democrats Insist on Not Giving Republicans Everything, by Dean Baker: In much of the media it is the rule that both parties are equally to blame regardless of what the facts of the situation are. Hence the lead sentence in the Post's article on the supercommittee's deadlock tells readers:

"Congressional negotiators made a yet another push Friday to carve $1.2 trillion in savings from the federal debt, but remained stuck in their entrenched positions on tax policy even as the clock was running down on their efforts to reach a deal."

It would be interesting to know how the Post decided that the Democrats have an entrenched position. They have offered dozens of plans, many of which would not involve having the rates return to their pre-Bush level, as is specified in current law. By contrast, the Republicans have consistently put forward proposals that would keep the taxes on the wealthy at their current level or lower them further.

Even though the Democrats have shown every willingness to cave, the Post refuses to give them credit for it.

I wish this was accurate, i.e. that Democrats did have an entrenched positions on tax increases and other things. We call these principles, and there's nothing wrong with having them or defending them.

Sunday, September 18, 2011

What Liberal Bias?

Good question:

Fair and balanced after all? The bias of the US press, by Riccardo Puglisi and James M. Snyder, Jr.,Vox EU: ...In a recent and influential paper, Tim Groseclose and Jeff Milyo (2005) ... conclude that the US media display an overall liberal bias, i.e. most media outlets are to the left of the average American voter. ... The results in Groseclose-Milyo are likely to become salient in the public debate over the next year, as Groseclose has recently published Left Turn: How Liberal Media Bias Distorts the American Mind, which draws heavily on their findings.
Because of its novelty, prominence, and stark conclusions, the original Groseclose-Milyo paper has been subject to several critiques... For example, John Gasper (forthcoming) shows that the liberal bias essentially disappears if we exclude the citations of a single group – the National Taxpayers Union – from the analysis. ...
[I]n our paper “The Balanced US Press” (2011a)..., we ... find that, on average, newspapers are located almost exactly at the median voter in their home states. ...
Economists often point out that rational citizens are less likely to be influenced by media bias if they learn that this bias exists. However, we might also worry about the political and policy consequences of wrongly persuading citizens that media outlets have a left-leaning position overall, when in fact they are balanced. That is: What happens if citizens are convinced to “undo” a bias that does not exist?

Thursday, July 28, 2011

Unskilled Labor

David Frum:

I used to write editorials for the Wall Street Journal... So I’m well aware of the challenge faced by those assigned to compose these documents. The strict demands of the paper’s ideology do not always lie smoothly over the rocky outcroppings of reality. It can take considerable skill to match the two together.

Unfortunately, many of the writers aren't that skilled.

He goes on:

In that regard, this morning’s lead editorial about the debt-ceiling crisis is a true masterpiece.
If you were to write a story about government debt, you’d probably be inclined to write about the two sets of government decisions that produce deficits or surpluses: decisions about expenditure and decisions about revenue. You’d want to do that not only as a matter of fairness, but also as a matter of math.
And that’s why, my friend, you would wash out as a WSJ editorialist. They wrote this editorial without any reference to revenues whatsoever. Boom! Gone! Don’t deny reality. Defy reality. ...
One of the many traps and impediments facing a Journal editorialist writing about debt is that up until 2009, the US debt burden rose most under the two presidents the Journal most ardently supported: Ronald Reagan and George W. Bush. The debt burden declined most under the presidents the Journal most despises – Dwight Eisenhower, Bill Clinton and Jimmy Carter.
It must have taken some hunting, but the Journal managed to find a chart that did just the opposite: federal payments to individuals as a percentage of federal outlays. What’s so great about this chart is that it excludes two of three biggest federal spending programs: Medicare and Medicaid, both of whose costs rose faster in the Bush 2000s than in the Clinton 1990s. ...

Saturday, June 18, 2011

Money Talks on Right-Wing Radio

Will Wilkinson:

Politics' new cash nexus, by Will Wilkinson: Rush Limbaugh loves the Heritage Foundation. ... Sean Hannity is also a vocal Heritage fan. Mark Levin likes to talk up Americans for Prosperity... For his part, Glenn Beck prefers Freedomworks. If you ask these popular right-wing talkers why they promote these groups on air, they'll tell you they believe in the work they do. Also, the pay's pretty good.

In Politico, Kenneth Vogel and Lucy McCalmont report on the cozy financial relationships between conservative talk-radio stars and a number of right-leaning research and advocacy institutions. 

In search of donations and influence, the three prominent conservative groups [Heritage, Freedomworks, and AFP] are paying hefty sponsorship fees to the popular talk show hosts. Those fees buy them a variety of promotional tie-ins, as well as regular on-air plugs ... often woven seamlessly into programming in ways that do not seem like paid advertising. ...

The Heritage Foundation pays about $2 million to sponsor Limbaugh’s show and about $1.3 million to do the same with Hannity’s – and considers it money well spent. ... While the deals differ, most provide the sponsoring group a certain number of messages or so called “live-reads,” in which the host will use a script, outline or set of talking points to deliver an advertisement touting the group and encouraging listeners to visit its website or contribute to it.

Some sponsorship deals also include so-called “embedded ads” in which the sponsors’ initiatives are weaved into the content of the show... But officials with the groups stress that they sought out the hosts because they were already ideologically in sync with their causes.

... More interesting than the superficial pay-to-play aspect of this story is what it reveals about the increasing integration of the conservative economy of influence. What we're seeing is a set of once disparate pieces coming together into a powerfully unified persuasion machine. Rich and not-so-rich people give to think tanks and advocacy groups because they believe, mostly correctly, that these organizations can do more with their money to promote their political values than they can do on their own. But the influence of these organizations is limited both by their budgets and their ability to get their messages out. Conservative talk radio has proven itself an incredibly popular and powerful persuasive force. They offer Washington politics and policy shops both a huge potential donor base and a megaphone. It helps Heritage immensely to have Mr Limbaugh citing their studies on air. But the persuasive force of their message is even greater when Mr Limbaugh's listeners choose to literally "buy in" to the Heritage Foundation by becoming donors. Over time, Heritage's financial support subtly and not-so-subtly shapes Mr Limbaugh's message. He, and thus his audience, comes to think ever more like Heritage. And his audience, who become ever more personally invested in Heritage, become correspondingly more receptive to his Heritage-influenced messages. The partisan public has its independent general policy instincts, but it tends to adopt its more specific policy opinions from trusted partisan elites. Traditionally, these elite opinion-leaders have been politicians. But I think we're witnessing a process through which professional "movement" elites in Washington, DC political non-profits are actively shaping public opinion via sympathetic mass-media intermediaries. Conflict between the Republican "establishment" and the tea-party movement may well reflect this shift in the balance of elite persuasive power.

(Are analogous forces at work on the left? I imagine there are, and I would like to hear about them. But I know that world much less well.) ...

When money talks, it doesn't always know what to say. Those trusted to write the scripts wield real power. The amplification and consolidation of this power through explicit financial deals between "freedom movement" institutions and conservative talk-radio superstars is a potentially profound development in American politics. If you ask me, the progressive fixation on campaign finance is badly misguided. Money shapes the course of our democracy at least as much through the complex confluence of popular mass media, Washington's institutional ideologues, and their far-flung multitude of impressionable donors. This a tricky story to tell, and it's hard to say what, if anything, should be done about it. But this is where a lot of the action is.

I don't have much to add, so I am mostly interested in hearing your thoughts on this. My thoughts, which I haven't considered very carefully, are first that if this is actually advertising in some form, and it seems clear that it is, don't we have rules about presenting products honestly to the public? When outright lies are used to sway the public, and there's no doubt this happens, should regulators step in and take action? If a producer can't make false claims about a competitor, why do we allow it in the political context? Is it simply the difficulty of picking referees, defining truth and lies, etc.? The other thought is about anti-trust legislation (and our failure to enforce it). To what extent is this all driven by concentrated ownership of media outlets? If there was more competition in this industry, would this be less of a problem?

But as I said, I'm mostly interested in your thoughts.

Saturday, June 04, 2011

The Post Goes Negative on the Economy

This is somewhat surprising. Dean Baker takes the Washington Post to task for being too pessimistic about the economy:

The Post Goes Negative on the Economy, by Dean Baker: The May jobs report was bad news, but it was not as bad as the Washington Post and many other news outlets made it seem. When we get monthly data it is always important to remember that we are pulling out a snapshot from a longer period of time. ...
For this reason it is important to take the 54,000 jobs created in May against the backdrop of 234,000 jobs added in April. Employers who hired many workers in April were likely to add few or none in May. ...
It is more likely that the April numbers overstated the underlying rate of job growth in the economy and the May numbers understate it, than there was some huge shift in the economy between the two months. Still, the average rate of job growth over the last three months was just 160,000.
It takes roughly 90,000 jobs a month to keep even with the rate of growth of the labor force. This means that if the economy stayed on this growth path, it would take almost a decade to get back to normal levels of unemployment. Furthermore, with house prices falling again and another round of state and local cutbacks kicking in next month, it is more likely that the job growth will be slowing than speeding up in the months ahead.

It's "not as bad as the Washington Post and many other news outlets made it seem"? The prospect of "almost a decade to get back to normal levels of unemployment" is very bad news. I don't usually disagree with Dean, but my reading of the article is that it is a fairly accurate picture of the problems now, and the potential pitfalls ahead. If the Post wants to help us try to goad legislators into action by admitting the economic recovery is faltering, great, welcome aboard (the article doesn't actually call for government action, but at least it doesn't dismiss the signs of weakness as transitory).

Here's a bit from the article:

Job creation withers in May as doubt reigns, by Brady Dennis, Washington Post: Behind the hard numbers in Friday’s dismal report on the job market are scared small-business owners, slashed state budgets, dried-up federal stimulus funds and a lingering uncertainty that has taken hold from corporate boardrooms to factory floors around the country. ...
It is the second time that growth has stumbled; a similar scenario played out last summer, reflecting the long, uneven process of clawing out of a recession spurred by a financial crisis.
Employers from coast to coast describe a situation in which tepid economic growth alone isn’t enough to prompt them to add to their payrolls. Sales have been rising, but slowly and tenuously. Doubts about the future have continued to chip away at confidence...
That standstill showed in the numbers released Friday, which revealed that the job market weakened across a wide range of industries in May. ... The largest job losses were in a public sector that is rapidly retrenching. Local governments have been cutting jobs in vast numbers — 28,000 in May — trying to eliminate their yawning budget gaps by dismissing public employees.
The public school district in Saginaw, Mich., for example, gave pink slips to 12 percent of its employees, including dozens of teachers, custodians and bus drivers. The reasons are familiar: Federal stimulus money is drying up; states are slashing their budgets, and cities and schools are following suit; and health care, fuel and other costs are rising. ...
In contrast with the previous three months, when the private sector was expanding its payrolls aggressively enough to maintain solid job growth despite the loss of government jobs, in May the private sector downshifted. Even as professional and business services and the health-care industry added thousands of jobs, gains in most other sectors slowed to a crawl or went backward. ...

Is that too negative?

Thursday, June 02, 2011

Now Change the Rest

David Warsh urges The Economist to remake itself:

Now Change the Rest, Economic Principals: The Economist was founded in 1843 by James Wilson, a hat manufacturer temporarily brought low by one of global capitalism’s first identifiable business cycles. By a series of courageous re-inventions over 168 years, it has managed to become, and then remain, one of the most influential editorial voices in the world.

It is time for another of those periodic reinventions. Wilson’s original prospectus announced his determination to take part in “a severe contest between intelligence, which presses forward, and an unworthy, timid ignorance obstructing our progress.”

At the time, as unworthy, timid ignorance he had in mind mainly Great Britain’s Corn Laws, protectionist measures against the importation of grain adopted thirty years before as part of a burgeoning battle between landowners and manufacturers. The Economist quickly won its battle for free trade, whose advantages only recently had been perceived. Its devotion to the advancing frontiers of knowledge has been often redeployed over the years. ...

That bias in favor of intelligence was on display again last week with the magazine’s cover story. ... The lead editorial put the matter succinctly:  “Humans have changed the way the world works. Now they have to change the way they think about it, too.” ...

The Economist doesn’t quite come out and assert that global warming is taking place. ... But its survey goes on to give a good précis of the biogeochemical problems facing humankind: atmosphere, water, energy, food, species diversity. The article concludes that the evidence is strong that a new age in the history of the earth had indeed begun. ...

Here is the remarkable thing. Nowhere in either essay – the editorial or the article itself – do the words “government” or “governance” appear. This is not altogether surprising. The Economist was founded in the early days of scientific economics, a time of powerful mood swings, Malthusian gloom dominating in one decade, technological optimism in the next. Delight in market organization was in the air... The magazine’s preference emerged early on for hands-off policies of laissez-faire as against government control.

Yet the magazine’s greatest editor, Water Bagehot, recognized in the 1860s that there were responsibilities in emergent capitalism that only governments could assume, centralized control of the banking system chief among them. Eighty years later, in the 1940s and ’50s, the magazine gradually came to support Keynesian views that governments bore responsibility for mitigating the ups and down of the business cycle.

Today a further change is required if the editors are to continue to prefer intelligence to ignorance. ... The shift required – one that already has begun under editor John Micklethwait, but one which still has far to go – involves the recognition that the social sciences have begun to integrate concepts of governance, organization and cooperation into the center of their conception of the world, rather than confining them (as they were in The Wealth of Nations)...

Giving up a reflexive faith in laissez-faire while deepening its appreciation of market technologies will not be easy. A telling subhead in last week’s editorial asserts, “The new geology leaves all in doubt” – an echo of a famous sentiment expressed when the collective certainties of the seventeenth and eighteenth centuries – the Biblical account of Creation and the comfort of a geocentric universe – were giving way to the heliocentric understanding of the cosmos. ... Humankind must accept responsibility not just for nature, but for itself – a new age not just for geology but for for political economy as well..

I've talked about this quite a bit in the past (e.g.), so I won't dwell on it, but to me significant market failures -- including but not at all limited to monopoly power -- present a clear and compelling case for government intervention. Government solutions to these problems have been held up, in part, by the idea that market failures are self-correcting. Monopolies will be challenged by new entrants or new products, markets will provide missing information, etc., etc. These ideas gave policymakers who were looking for an excuse to keep government on the sidelines a reason to do just that.

But it hasn't worked. Market failures are self-correcting in some cases, or the consequences of the market failure are too small to justify government taking action. But there are important cases where the problems have not been corrected automatically, and our failure to step in and take action has had or could have significant negative consequences (e.g. market failures, if not the cause of the financial crisis, certainly made it worse, and we have done very little to offset important failures in energy markets that are making the climate change problem harder to solve).

We do need a change in attitude, and not just from the editorial leaders at The Economist (some writers there already show progress). Policymakers and the public must also come to understand that there is an important role for government to play is overcoming these problems.

Thursday, May 12, 2011

"The Wall Street Journal's Misleading Income Chart"

Bruce Bartlett points to a Tax Foundation article that accuses the WSJ's editorial page of "a textbook example of how to lie with statistics.": The Wall Street Journal's Misleading Income Chart. When the Tax Foundation questions someone's reliability, you know a line has been crossed.

Wednesday, April 27, 2011

"Decoding Ben Bernanke"

Here's the video I did on Bernanke's Press Conference that I mentioned in an earlier post: Decoding Ben Bernanke:

Green Shoots and the Fed

Here are some responses to Bernanke's Press conference from The Room for Debate:

Here's mine:

The Fed’s dual mandate requires it to pursue both full employment and price stability. Currently, however, the Fed is falling short on both of these goals.
Employment is far below its full employment level, and inflation is running below the Fed’s preferred range of 1.5 to 2.0 percent. Inflation is expected to rise a bit in the short-run due to rising commodity prices, but the Fed says it expects commodity price increases to be transitory.
Thus, none of the Fed’s forecasts show any long-run concern about inflation at all. The main question I wanted to hear Bernanke answer is, given that inflation is expected to remain low, why the Fed isn’t doing more to help with the employment problem? Why not a third round of quantitative easing?
Bernanke was asked this question, but his answer was unsatisfactory. The potential benefit of further policy moves by the Fed is higher growth and lower employment. The potential cost of more quantitative easing is inflation. So the decision on whether to provide more help to labor markets comes down to a comparison of the expected employment benefits to the expected inflation cost.
Even though there is no evidence of a problem in the Fed’s own projections, and the prices of long-term financial assets dependent upon future inflation show no evidence of inflation worries either, Bernanke nonetheless said that he believes the costs have risen relative to the benefits — that is, the Fed’s worry about inflation is standing in the way.
But I think there is something else behind the Fed’s reluctance to continue easing. The Fed first began seeing “green shoots” in April of 2009, a full two years ago. At every step since, the Fed has used the prospect of better times just around the corner as a reason to downplay the benefits of further easing.
But the growth of the green shoots has been stunted, or they have wilted away entirely. In retrospect, more aggressive action by the Fed was warranted in every instance. Perhaps this time is different — I sure hope so — but the recovery has been far too slow to be tolerable. Green shoots require more than hope, they require the nourishment, and with fiscal policy out of the picture it’s up to the Fed to provide it.

Bernanke's Press Conference

I am writing up my reaction to Bernanke's press conference, and it's basically the same as this. More later. I also did a video for CBS MoneyWatch discussing the conference and I'll post that as soon as it's available (Here's a link to the video).

Update: Here's Tim Duy's reaction:

Very High Bar for QE3, by Tim Duy: My first thoughts: The FOMC statement was consistent with my expectations, while Federal Reserve Ben Bernanke sounded slightly more hawkish than I anticipated.  The latter confirms the view I took two weeks ago – near term inflation gains were not sufficient to justify altering the current policy stance, but would derail any additional increases to the balance sheet beyond June.

The FOMC statement itself was largely straightforward.  Arguably a bit of a downgrade of the economy (as CR notes, the “firmer footing” language has disappeared) and a little more talk about inflation.  The new economic projections reflected these alterations, with growth forecasts brought down to pretty much the same range when the Fed initiated QE2, while near-term headline inflation forecasts are higher.

The initial phase of Bernanke’s press conference was also in line with my expectations.  He noted that the expectations for trend growth and the natural rate of unemployment were beyond the control of the Fed, while inflation was directly determined by monetary policy.  He explained the reasoning for a positive rate of inflation, explicitly pointing to the concern about deflation, defined as falling wages and prices.  This was, I believe, the last we heard about wages.

In response to the Q&A portion, he said the impending weak Q1 growth numbers are the result of transitory factors (defense spending, exports, weather), and “possibly less momentum.”  The latter phrase was a bit disconcerting and should suggest a predilection toward additional asset purchases beyond June, but apparently the FOMC intends to focus on the transitory nature of the numbers.  See again my earlier piece.  When questioned about the timing of any exit, Bernanke explained the relevant factors, including the sustainability of the recovery, the strength of the labor market, the direction of inflation, and resource slack.   Not surprisingly, he gave no timeline to tightening. 

Regarding the end of QE2, he reiterated the “stock” view of the balance sheet.  Essentially, the pace of accumulation is less important than the size of the balance sheet, and there were no plans to shrink assets.  Indeed, he suggested the first step toward tightening would be to stop reinvesting assets as they mature or are redeemed.  I thought he handled the Dollar questions well – throwing it back in the lap of Treasury Secretary Timothy Geithner and claiming, rightly in my opinion, that the best thing for the Dollar over time is that the Fed pursues policies that satisfy its dual mandate.

The most interesting comments came in response to questions about whether the Fed should do more to lower unemployment and if QE2 is effective, shouldn’t the program continue?  Here was a more hawkish Bernanke.  As I noted earlier, growth forecasts returned to the pre-QE2 range, which should be a red flag.  Unemployment remains high, with only moderate job creation.  Core-inflation remains low, while the impulse from commodity prices on headline inflation is expected to be temporary.  Finally, he claims that QE2 was in fact effective.  So why not do more?  Because the Fed needs “to pay attention to both sides of the mandate” and the “tradeoffs are less attractive.”  Much talk by Bernanke at this point about inflation expectations, and the importance of maintaining those expectations, and not much (none, I think), about the issue (or non-issue) of wage inflation. 

Apparently the threat of headline deflation off the table, Bernanke is not inclined to pursue sustained easing despite low core inflation and high unemployment.  Again, I am not entirely surprised, except that Bernanke appear to suggest we are much closer to an inflation tipping point than I would expect.  He could have tempered these comments with a more forceful discussion of labor costs, but did not.  It seems clear these comments were intended to calm the non-existent bond market vigilantes, but is it consistent with the outlook?  Arguably, no.  For what it’s worth, I think Bernanke appeared most uncomfortable during this portion of the conference. 

Bottom Line:  When I look at the revisions to the Fed’s outlook and listen to Bernanke, I get the sense that the basic Fed policy is summarized as follows:  “The economic situation continues to fall short of that consistent with the dual mandate, we have the tools to address that deviation, but will take no additional action because some people in the Middle East are seeking democracy.”

Saturday, April 09, 2011

Why Oh Why?

Isn't a intended non-factual statment called a lie?:

'his remark was not intended to be a factual statement,'

This doesn't say Senator Jon Kyl (R-AZ) made a mistake, it says that he was not intending to be factual (even though he was citing a specific figure). With his credibility now seriously in question, this ought to cause news agencies to stop quoting, interviewing, or otherwise paying attention to Senator Kyl. One lie -- especially one that is "intended" as this one seems to be -- should cause reputable news agencies to stay away. But they won't. Providing credible information to the public does not seem to be the first order of business. [Update: I should add that I realize he was simply tossing out a figure without bothering to check, he said 90 percent when the truth was closer to 3 percent, so maybe "intended lie" is a bit strong as a description. But why should anyone, e.g. a news agency, be willing to rely upon or report the views of someone who is willing to yank figures out of thin air -- wrong figures it turns out -- to support an argument?]

Saturday, March 05, 2011

"Fox News Will not be Moving into Canada"

The environment North of the U.S. is much less hospitable to some types of Fox-like creatures:

...Fox News will not be moving into Canada after all! The reason: Canada regulators announced last week they would reject efforts by Canada's right wing Prime Minister, Stephen Harper, to repeal a law that forbids lying on broadcast news.
Canada's Radio Act requires that "a licenser may not broadcast....any false or misleading news." The provision has kept Fox News and right wing talk radio out of Canada...

[From here.]

Thursday, March 03, 2011

"Breaking News: Tax Revenues Plummeted"

David Cay Johnston:

Breaking News: Tax Revenues Plummeted, by David Cay Johnston: We take you now to the official data for important news. ... Lowered tax rates did not result in increased tax revenues as promised by politician after pundit after professional economist. And even though this harsh truth has been obvious from the official data for some time, the same politicians and pundits keep prevaricating. ...
No matter how many times advocates of lower tax rates said it, tax rate cuts did not pay for themselves, did not spur economic growth, did not increase jobs, and did not make America better off.
Now that the news has been broken, let's see how many political leaders start speaking facts instead of fairy tales. And let's also watch to see how many Washington reporters, news anchors, talk show guests, and syndicated columnists use the actual figures. It's called holding politicians accountable, and it used to be a mainstay of journalism, where the first rule is to check it out and the second is to cross-check until you know what is going on and can give context. ...

I was going to say, "don't count on it." But then I kept reading:

So how soon will we see Washington journalists holding politicians accountable for what they say about taxes, tax rates, revenues, economic growth, and jobs?
Here's some advice: Don't hold your breath. Washington has become a city of ideological marketing, where those who would note that the emperors have no facts are unwelcome in their own newsrooms. ...[continue reading]...

The claim from conservatives that defict reduction will help the economy recover from the recession is their latest attempt to pursue ideological goals by convincing people that down is really up.

Update:

In Search of the Confidence Fairy, by Paul Krugman: In the debate over the budget, Republicans seem to be leaning on the claim that austerity will actually increase employment, because it will raise business confidence; at least that’s what John Taylor seems to be saying.
But how’s that going in Britain, where the Cameron austerity program was supposed to lead the way?
Most of the discussion of Britain I’ve seen focuses on GDP numbers, with the debate then centering on how much of the decline in the 4th quarter was weather-related. But a lot of things affect GDP. Why not look directly at confidence? The BDO has a convenient survey of business optimism (pdf); numbers for December and January here. Here’s what it looks like:

DESCRIPTION

Austerity seems to have hurt, not helped, business confidence; as the BDO says, “Private sector unprepared to fill the hole left by public sector cuts.”
Why do we think the US experience — with the GOP proposals far less serious and responsible than Cameron’s — would be any better?

Tuesday, January 11, 2011

"Media and Political Culture"

Daniel Little:

Media and political culture, Understanding Society: How are people's political beliefs, concerns, and passions influenced within a modern mass society? There are many mechanisms, certainly: family, school, place of worship, place of work, and military service, to name several. But certainly the various channels of the media play an important role. Newspapers, television and radio, social media, and blogs have a manifest ability to focus some parts of the electorate on one issue or another.

So it seems worthwhile to ask whether it is possible to perform some empirical study of the content and value systems associated with various media channels. (Here is a textbook by Klaus Krippendorff on the use of content analysis in journalism and the media; Content Analysis: An Introduction to Its Methodology.) This question falls into several parts: first, are there important differences in content and tone across various media channels? And second, what effects do these configurations of content and tone have on the users of the media?

The Pew Research Center's Project for Excellent Journalism offers a window into the first of these questions with a fascinating new tool (link). The "Year in the News Interactive" tool is the front end of a valuable database that codes various media streams according to content. The database is then searchable so that the user can produce reports on the percentage of the "newshole" devoted to a particular issue or person in a particular medium. Here is a sample of what the tool produces:

This chart repays close examination. It picks out five segments of media -- "All Media," "Large Papers," Talk Radio," "NBC Evening News," and "Fox News," and it compares these outlets with respect to five issues: Obama Administration, Health Care, Tea Party, Mosque Controversy, and Sarah Palin. These are highly politicized issues, so it is interesting to see how the patterns of treatment differ across different segments of the media.

If we consider "All Media" as a benchmark -- representing the average amount of attention given by the media as a whole to various issues -- we see that Talk Radio and Fox News show a few remarkable patterns. Both sources give the mosque controversy more than twice the percentage of the newshole; likewise the Tea Party gets twice as much attention with Talk Radio and Fox News as with All Media. Fox News gives Sarah Palin over twice the exposure she gets from All Media -- and nine times the exposure she gets from Large Papers. Both Talk Radio and Fox News give an inordinate amount of air time to Health Care and the Obama Administration.

Now take a different cut: the network news programs and Fox News with respect to a much less political list of topics -- BP Oil Spill, Haiti Earthquake, Toyota Accelerator Recall, and Cyberspace.

Here the main contrast that seems evident is that Fox News devotes significantly less time to the non-political issues. Fox devoted about half the percentage of its newshole to the BP Oil Spill compared to NBC news; Haiti got roughly a third the amount attention on Fox; and the Toyota Accelerator Recall got less than half the exposure as it received on NBC news.

At a minimum, this shows something pretty interesting: the regular viewer or listener to Fox News and Talk Radio will get a very different view of the world from the person exposed to All Media or Large Papers. These media channels give an inordinate amount of airtime to "hot button" issues that have the potential of inflaming their viewers. And these channels spend much less time that the other media on non-political issues -- Haiti, Toyota recall, or Cyberspace.

What would be particularly interesting in today's environment is an additional dimension of content analysis, reflecting antagonism, intolerance, and hostility. It would be very useful to have a few years of data on the percentage of the newshole devoted to incendiary reporting about issues, individuals, and the government. Many observers have the definite impression that this kind of language has increased dramatically; it would be very useful to have quantifiable data on this topic.

(As we think about the tenor and extremism of some of the voices in political media today, it is sobering to remember the role that "hate radio" played in the Rwandan genocide; link.)

Sunday, November 14, 2010

"The Case Against News We Can Choose"

Ted Koppel misses "Walter Cronkite, Chet Huntley, David Brinkley, Frank Reynolds and Howard K. Smith" and their "relatively unbiased accounts of information that their respective news organizations believed the public needed to know":

The case against news we can choose, by Ted Koppel, Commentary, Washington Post: To witness Keith Olbermann ... suspended even briefly last week for making financial contributions to Democratic political candidates seemed like a whimsical, arcane holdover from a long-gone era of television journalism... Back then, a policy against political contributions would have aimed to avoid even the appearance of partisanship. ...
We live now in a cable news universe that celebrates the opinions of Olbermann, Rachel Maddow, Chris Matthews, Glenn Beck, Sean Hannity and Bill O'Reilly - ...political partisanship ... encouraged ... by their parent organizations because their brand of analysis and commentary is highly profitable.
The commercial success of both Fox News and MSNBC is a source of nonpartisan sadness for me. While I can appreciate the financial logic of drowning television viewers in a flood of opinions designed to confirm their own biases, the trend is not good for the republic. ... This is to journalism what Bernie Madoff was to investment: He told his customers what they wanted to hear, and by the time they learned the truth, their money was gone. ...
We celebrate truth as a virtue, but only in the abstract. What we really need in our search for truth is a commodity that used to be at the heart of good journalism: facts - along with a willingness to present those facts without fear or favor.
To the degree that broadcast news was a more virtuous operation 40 years ago, it was a function of both fear and innocence. Network executives were afraid that a failure to work in the "public interest, convenience and necessity," as set forth in the Radio Act of 1927, might cause the Federal Communications Commission to suspend or even revoke their licenses. ... News was ... the loss leader that permitted NBC, CBS and ABC to justify the enormous profits made by their entertainment divisions.
On the innocence side of the ledger, meanwhile, it never occurred to the network brass that news programming could be profitable. ...
Much of the American public used to gather before the electronic hearth every evening, separate but together, while Walter Cronkite, Chet Huntley, David Brinkley, Frank Reynolds and Howard K. Smith offered relatively unbiased accounts of information that their respective news organizations believed the public needed to know. The ritual permitted, and perhaps encouraged, shared perceptions and even the possibility of compromise among those who disagreed.
It was an imperfect, untidy little Eden of journalism where reporters were motivated to gather facts about important issues. We didn't know that we could become profit centers. No one had bitten into that apple yet.
The transition of news from a public service to a profitable commodity is irreversible. Legions of new media present a vista of unrelenting competition. ...
The need for clear, objective reporting in a world of rising religious fundamentalism, economic interdependence and global ecological problems is probably greater than it has ever been. But we are no longer a national audience receiving news from a handful of trusted gatekeepers; we're now a million or more clusters of consumers, harvesting information from like-minded providers. ...
There is ... not much of a chance that 21st-century journalism will be adapted to conform with the old rules. Technology and the market are offering a tantalizing array of channels, each designed to fill a particular niche - sports, weather, cooking, religion - and an infinite variety of news, prepared and seasoned to reflect our taste, just the way we like it. As someone used to say in a bygone era, "That's the way it is."

I have mixed feelings about this. When the networks and other media are trying to be objective but get the facts wrong, as they do, there is now a way to challenge the statements that did not exist 40 years ago when three networks had a monopoly on public discourse. If all three networks said it, then it was true. So the good part is that "facts" that really aren't facts can be challenged in a way that didn't happen 40 years ago. And there is another good part too. Sometimes there are legitimate differences in the way a set of facts can be interpreted. These differences are aired today in ways they weren't in the past when only one side of the argument might have made it onto the networks.

The bad part is that actual facts can also be challenged in an attempt to divert attention and create smoke screens that obscure the truth. And it seems to me that the cost -- the deliberate attempt to undercut truth for political advantage -- has more than outweighed the benefit of being able to challenge information presented as factual when it isn't, or presented as representative of the conclusions drawn from most scientific work on an issue when the conclusions actually point in another direction.

I don't have the answer to this either, but since Koppel emphasizes the bad in the new system without noting much of the good, I thought I'd at least point out that some parts of the new system are better than the old. I don't want to go back to system with three white guys on networks with a monopoly on the news tell me the "truth." More competition than that is good, the problem is that the competition leads networks to maximize entertainment rather the provision of accurate information. Thus the need, it seems to me, is to find a way to enhance the good parts the new system while minimizing the bad. Part of that, I think, will come as people adapt to the new information technology we now have -- we are still in transition and still learning how to best use the new tools. But that's unlikely to be enough, and it won't solve the problem of people only seeking out the things they want to hear, and so called news sources meeting the demand for one-sided presentations. The harder question is whether some sort of government intervention is needed to give the news media the incentive it needs to present the facts "without fear a favor." I think a case can be made that it is in the public interest to have such information available, but beyond truth in advertising rules about what can and cannot be labeled news, and subsidies of some sort to encourage movement in this direction (but how to design these?), it's hard for me to think of ways to make this happen that aren't overly restrictive. Any ideas?

Sunday, October 31, 2010

"David Broder Calls for War With Iran to Boost the Economy"

I don't know if I can muster the shrillness this deserves, so let me turn it over to Dean Baker and Brad DeLong. Brad DeLong first:

There Should Be Resignations in Protest and on Principle from the Washington Post Today..., by Brad DeLong: ...but there should be such resignations every day. ...

David Broder... call[s] for Barack Obama to bomb Iran to get the economy moving? It would be good for the country if this monstrosity shut itself down today. ... Broder is ... monstrous:

[I]f Obama cannot spur that [economic] growth by 2012, he is unlikely to be reelected.... Can Obama harness the forces that might spur new growth?.... What are those forces?... One is the power of the business cycle.... What else might affect the economy? The answer is obvious, but its implications are frightening. War and peace influence the economy.

Look back at FDR and the Great Depression. What finally resolved that economic crisis? World War II.

Here is where Obama is likely to prevail.... [H]e can spend much of 2011 and 2012 orchestrating a showdown with the mullahs. This will help him politically because the opposition party will be urging him on. And as tensions rise and we accelerate preparations for war, the economy will improve.

I am not suggesting, of course, that the president incite a war to get reelected. But the nation will rally around Obama because Iran is the greatest threat to the world in the young century. If he can confront this threat and contain Iran's nuclear ambitions, he will have made the world safer and may be regarded as one of the most successful presidents in history.

Dean Baker:

David Broder Calls for War With Iran to Boost the Economy, by Dean Baker: This is not a joke (at least not on my part). David Broder, the longtime columnist and reporter at a formerly respectable newspaper, quite explicitly suggested that fighting a war with Iran could be an effective way to boost the economy. Ignoring the idea that anyone should undertake war as an economic policy, Broder's economics is also a visit to loon tune land. ...
Sorry Mr. Broder, outside of Fox on 15th the world does not work this way. War affects the economy the same way that other government spending affects the economy. ...
If spending on war can provide jobs and lift the economy then so can spending on roads, weatherizing homes, or educating our kids. Yes, that's right, all the forms of stimulus spending that Broder derided so much because they add to the deficit will increase GDP and generate jobs just like the war that Broder is advocating (which will also add to the deficit).
So, we have two routes to prosperity. We can either build up our physical infrastructure and improve the skills and education of our workers or we can go kill Iranians. Broder has made it clear where he stands.

Even they aren't shrill enough for my taste. Trying to sell a war by pointing to positive economic and political externalities is pretty disgusting, especially when the same economic benefits and then some can be realized by spending the money on infrastructure instead. Killing Iranians and Americans is not required. (And even if there was some way to justify going to war to spur the economy, the spike in oil prices that would surely occur would likely make things worse, not better.)

How about a war on joblessness? Had that war been conducted with the support of people like Broder, or without for that matter, the economy would be doing better, and Democrats would be doing better in the polls. I'm convinced of that. But the Broders of the world, the "serious people," aren't so serious when it comes to ordinary households struggling to make ends meet. Where's the support for their struggles? Why aren't they worth spending money on? Grrr.

Wednesday, September 08, 2010

"John Boehner's Stale 'Two-Step Job Creation Plan"

On Boehner's economic "plan," pgl sets the tone:

CNNMoney Fails Introductory Macro. by pgl: OK – I just ripped off the title of Peter Dorman’s ripping of Peter Orszag’s NYTimes oped but how else can you describe the CNN/Money piece entitled Boehner unveils his own plan to aid economy?. Boehner and other GOP leaders propose to cut government spending which would deepen the recession. How can any reporter say this is an aid to the economy? Could at least one reporter have the intelligence and integrity to entitle such a piece Boehner unveils his own plan to screw economy? If you any decent reporting on such GOP gibberish – let us know.

And Ezra Klein has backup:

John Boehner's stale 'two-step job creation plan', by Ezra Klein: Minority Leader John Boehner is proposing what his members are calling a "two-step job creation plan." The two steps? Pass a budget that costs only as much as the 2008 budget, and extend the Bush tax cuts for everyone, including the wealthiest Americans.
So on the one hand, a measure that will make a small dent in the deficit. On the other hand, a measure that will lead to a huge increase in the deficit. There's no theory of the economy in which this really makes sense: If the market is worried about the government's finances, this makes them worse, not better. ...
It's also worth noting that these policies are both stale: The Bush tax cuts are ... tax policy from 10 years ago, designed to deal with a very different set of circumstances. ... Our economic situation has changed dramatically in the past few years. Don't Republicans have any fresh thinking on what to do about it?

I thought Ezra's wonk book made the salient point:

...many Republicans, at the same time that they are claiming that a $50 billion investment in America’s infrastructure is a budget-buster, are pushing to extend the Bush tax cuts for the wealthiest two percent of Americans. ...

And the cost of those tax cuts is much, much higher than the cost of the infrastructure proposal. On the other side -- i.e. the benefits -- given our infrastructure needs, which are nearly universally acknowledged to be large, the benefits from infrastructure spending would be similarly large. As Paul Krugman argues, the benefits from infrastructure spending are likely to exceed the benefits from extending the tax cuts:

So suppose we’re going to put $50 billion of resources that would otherwise be idle to work. Is it better to use them to produce public goods like improved roads, or private goods like more consumer durables? That’s not at all obvious — and anyone who tells you that basic economics settles the question, that is says that devoting more resources to production of private goods is better, doesn’t understand Econ 101.

And there’s a pretty good argument to be made that we are, in fact, starved for public goods in this country, so that it would actually be a good idea to shift some resources to public goods production even if we were at full employment; in that case, we should definitely give priority to public goods when trying to put unemployed resources to work.

Would we be better or worse off today if the Bush tax cuts at the upper end of the income distribution had been used instead for a decade long program to rebuild infrastructure? My answer won't be hard to guess.

Tuesday, September 07, 2010

"He is One of the Best Fed Watchers Out There"

I figured Tim Duy would be too shy to post this, so I posted it for him.

Sunday, July 25, 2010

WikiLeaks Releases Documents on Afghanistan

Will this be a game changer in Afghanistan?

Friday, July 23, 2010

Tucker Punched

The misrepresentations from the reporters distorters pushing this (non)story based upon emails from Journolist continue (in addition to the examples below, there are other instances where the difference between the original emails and the versions posted at Daily Caller reveal the willingness to use distortions to tell a story that appears to resonate so well with potential readers of that site):

Should You Trust Tucker Carlson's Daily Caller on Anything? No, by Brad DeLong: In case you were wondering...

The Daily Caller:

DAVID ROBERTS, GRIST: It’s all I can do not to start bawling....

JOHN BLEVINS, SOUTH TEXAS COLLEGE OF LAW: It’s all I can do to hold it together.

The actual conversation on election night, which of course puts these lines in a much different and more history-conscious light:

DAVID: I've spent much of this election struggling not to contemplate what an Obama victory would mean. After the crushing disappointments of 2000 and 2004, I haven't allowed myself to feel much hope or excitement. It's been head-down, day-to-day fighting for a long, long time. Big picture stuff has been pushed out.

Yet I find that as an Obama victory seems more tangible, all that feeling is fighting its way to the surface. When I look at pictures like the one attached, it's all I can do not to start bawling. The same is true when I hear all these reports, like Rich's, about extraordinary turnout and energy in places like NC. It's true when I hear Obama's speeches. It's true when I think about the fact that people who experienced a time when blacks had separate drinking fountains are now voting for a black president....

John: David - well said. I've been experiencing the same thing -- it's all I can do to hold it together. I think the most touching moments are the interviews/accounts of elderly black people voting/volunteering/etc. Like the video below (Charles Meets Barack) -- it's just an unbelievable historical moment.

And what's truly touching is that you can really feel the weight of so many past generations who have sacrificed so much to make it possible today.

http://www.youtube.com/watch?v=TW-6DpC-mj8

And Ezra Klein writes:

Ezra Klein - When Tucker Carlson asked to join Journolist: I hoped to let my quick accounting of the constant inaccuracies in the Daily Caller's selective quotations from Journolist stand as my last word on the matter. But Tucker Carlson's sanctimonious and evasive statement on the way his site has been covering this story deserves a response. So allow me one more post.

Tucker's note doesn't bother to mention the actual questions that have been raised: That his stories have misstated fact, misled readers, and omitted evidence that would contradict his thesis. He doesn't explain how a thread in which no journalists suggested shutting down Fox News can be headlined "Liberal journalists suggest government shut down Fox News." He doesn't tell us why an article about the open letter that originated on the list left out the fact that I subsequently banned any future letters from the list. He doesn't detail why his stories haven't mentioned that one of his own reporters was on the list -- his readers would presumably be interested to know that the Daily Caller was part of the liberal media conspiracy.

Instead, Tucker says, well, trust him. "I edited the first four stories myself," he writes, "and I can say that our reporter Jonathan Strong is as meticulous and fair as anyone I have worked with."

If this series now rests on Tucker's credibility, then let's talk about something else he doesn't mention: I tried to add him to the list. I tried to give him access to the archives. Voluntarily. Because though I believed it was important for the conversation to be off-the-record, I didn't believe there was anything to hide.

The e-mail came on May 25th. Tucker didn't ask that it be off-the-record, so I'm not breaking a confidence by publishing it. Here it is, in full:

Dear Ezra,

I keep hearing about how smart the policy conversations on JournoList are, and am starting to feel like I'm missing out by not reading them. Could I join?

I realize you and I don't share the same politics, but I can promise you I have no interest in flaming anyone or even debating (I get enough of that). I'm just interested in knowing what smart progressives are saying. It strikes me that's the one thing I'm missing in my daily reading.

Please tell me what you think. If it makes you uncomfortable, ask around. I'm pretty sure we know a lot of the same people.

All best,

Tucker Carlson.

At the time, I didn't know Carlson was working on a story about Journolist. And I'd long thought that the membership rules that had made sense in the beginning had begun to feed conspiracy theories on the right and cramp conversation inside the list. I wrote him back about 30 minutes later.

We definitely have friends in common, and I'd have no worries about you joining. The problem is I need to have clear rules, as i don't want to be in the position of forcing fine-grained membership tests based on opaque criteria. Thus far, it's been center to left, just because that was how people wanted it at the beginning in order to feel comfortable talking freely. I've been meaning for some time to ask the list about revisiting that, so I'll take this opportunity and get back to you.

I then wrote this e-mail to Journolist:

As folks know, there are a couple of rules for J List membership. One is that you can't be working for the government. Another is that you're center to left of center, as that was something various people wanted back in the day. I've gotten a couple of recent requests from conservatives who want to be added (and who are people I think this list might benefit from), however, and so it seems worth asking people whether they'd like to see the list opened up. Back in the day, I'd probably have let this lie, but given that Journolist now leaks like a sieve, it seems worth revisiting some of the decisions made when it was meant to be a more protected space.

As I see it, the pro of this is that it could make for more fun conversations. The con of it is that it becomes hard to decide who to add and who to leave off (I don't want to have to make subjective judgments, but I'm also not going to let Michelle Malkin hop onto the list), and it also could create even more possible leaks -- and now, they'd be leaks with more of an agenda, which could be much more destructive to trust on the list.

I want to be very clear about what I was suggesting: Adding someone to the list meant giving them access to the entirety of the archives. That didn't bother me very much. Sure, you could comb through tens of thousands of e-mails and pull intemperate moments and inartful wording out of context to embarrass people, but so long as you weren't there with an eye towards malice, you'd recognize it for what it was: A wonkish, fun, political yelling match. If it had been an international media conspiracy, I'd have never considered opening it up.

The idea was voted down. People worried about opening the archives to individuals who could help their careers by ripping e-mails out of context, misrepresenting the nature of the ongoing conversation, and bringing the world an exclusive look into The Great Journolist Conspiracy, as opposed to the daily life of Journolist, which even Carlson describes as "actually pretty banal."

Apologetically, I went back to Tucker and delivered the bad news. But I still liked the idea of a broader e-mail list, and I offered to partner with him to start one. "There was interest," I told him, "in creating a separate e-mail forum with a more bipartisan flavor (such that Journolist could keep its character, but something else could provide the service we're talking about), and if that's something you want to do, I'd be glad to work on it with you."

He asked again if he could join Journolist, maybe on a read-only basis. He never responded to the idea of creating a bipartisan list. I was disappointed, but didn't think much of it.

My mistake, obviously. But if this series rests on Tucker's credibility, that's a soft foundation indeed. At every turn, he's known about evidence that substantially complicates his picture of an international media conspiracy. He knows I tried to let him in, odd behavior for someone with so much to hide and so much to lose. He knows I let one of his reporters remain a member. He knows I banned -- and enforced the ban -- on the sort of coordinated letter that served as example one of the list's conspiracy. He knows -- and never, to my knowledge, corrected -- that his reporter misrepresented the dates of Dave Weigel's posts to make it look like things he wrote at the Washington Independent were written at the Washington Post. And that's not even to mention the more prosaic deceptions of his selective choice of threads, truncated quotations, and misleading headlines.

When I e-mailed him to ask about some of these omissions, his response was admission mixed with misdirection. "I don't have nearly the grounding in this that Strong does, but according to him you often come off as a voice for moderation, and I'm pretty sure he will make that clear in a subsequent story." Ah, the old "we'll be more truthful later."

Why oh why can't we have a better press corps?

Monday, May 17, 2010

Paul Krugman: Going to Extreme

Why is right-wing extremism suddenly in the news?:

http://www.nytimes.com/2010/05/17/opinion/17krugman.html: Utah Republicans have denied Robert Bennett, a very conservative three-term senator, a place on the ballot, because he’s not conservative enough. In Maine, party activists have pushed through a platform calling for, among other things, abolishing both the Federal Reserve and the Department of Education. And it’s becoming ever more apparent that real power within the G.O.P. rests with the ranting talk-show hosts.

News organizations have taken notice: suddenly, the takeover of the Republican Party by right-wing extremists has become a story...

But why is this happening?... The right’s answer, of course, is that it’s about outrage over President Obama’s “socialist” policies... Many on the left argue, instead, that it’s about race... — and there’s surely something to that.

But I’d like to offer two alternative hypotheses: First, Republican extremism was there all along — what’s changed is the willingness of the news media to acknowledge it. Second, to the extent that the power of the party’s extremists really is on the rise, it’s the economy, stupid.

On the first point: when I read ... journalists who are shocked, shocked at the craziness of Maine’s Republicans, I wonder where they’ve been... Indeed, the new Maine platform is if anything a bit milder than the Texas Republican platform of 2000, which called not just for eliminating the Federal Reserve but also for returning to the gold standard, for killing not just the Department of Education but also the Environmental Protection Agency, and more.
Somehow..., the radicalism of Texas Republicans wasn’t a story in 2000, an election year in which George W. Bush of Texas, soon to become president, was widely portrayed as a moderate.
Or consider those talk-show hosts. Rush Limbaugh hasn’t changed... What’s changed is his respectability: news organizations are no longer as eager to downplay Mr. Limbaugh’s extremism...
So why has the reporting shifted? Maybe it was just deference to power: as long as America was widely perceived as being on the way to a permanent Republican majority, few were willing to call right-wing extremism by its proper name. Maybe it took a Democrat in the White House to give some observers the courage to say the obvious.
To be fair, however, it’s not all ... perception. Right-wing extremism ... clearly has more adherents now than ... a couple of years ago. Why? It may have a lot to do with a troubled economy. ...
When the economy plunged into crisis, many observers — myself included — expected a political shift to the left. After all, the crisis made nonsense of the right’s markets-know-best, regulation-is-always-bad dogma. In retrospect,... this was naïve:... in bad times, the gut reaction of many voters is to move right.
That’s the message of a recent paper by ... Markus Brückner and Hans Peter Grüner, who find ... periods of low economic growth tend to be associated with a rising vote for right-wing and nationalist political parties. The rise of the Tea Party, in other words, was exactly what we should have expected in the wake of the economic crisis.
So where does our political system go from here? Over the near term, a lot will depend on economic recovery. If the economy continues to add jobs, we can expect some of the air to go out of the Tea Party movement.

But don’t expect extremists to lose their grip on the G.O.P. anytime soon. What we’re seeing in places like Utah and Maine isn’t really a change in the party’s character: it has been dominated by extremists for a long time. The only thing that’s different now is that the rest of the country has finally noticed. 

Wednesday, February 24, 2010

"Don't Save the Press"

Should traditional media by saved by the government?:

Don’t Save the Press, by Žiga Turk, Commentary, Project Syndicate: Throughout history, political leaders have supported existing communication technologies in order to defend the system in which they rule. Today, too, governments may be tempted to protect newspapers and public TV on the pretext of “saving democracy as we know it.” But efforts to block technological change have been futile in the past, and they would be unwise today. ...
Faced with an existential crisis as new technologies lure away their readers and viewers, traditional news media ... are increasingly turning to governments for help. But, such is the undertone, their cause is nobler. The media are a cornerstone of democracy. Left to the blogs and tweets, without journalists to report the news, how can citizens decide what politics to support?
Such thinking reflects an age-old fear: as Plato put it, citizens would get “information without proper instruction and, in consequence, be thought very knowledgeable when they are for the most part quite ignorant.” It is a fear that has echoed down through history ever since, from the Catholic Church cursing Gutenberg’s movable type to the Victorian bourgeois complaining of the newly discovered freedom of the press.
Political rulers, too, have never liked new communication technology, because the political system in which they rule is adapted to the existing technology. Scarcity of parchment required all decision-making to be concentrated in a court consisting of a handful of people. When cheap paper and printing presses – the first true mass-communication technology – challenged this system, the Catholic Church and the monarchs defended the parchment-based monopoly. They failed.

Continue reading ""Don't Save the Press"" »

Sunday, January 10, 2010

''Why the 'Fiscal Times' is Off to a Very, Very Bad Start Indeed...''

Brad DeLong writes a letter.

Sunday, October 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?

Tuesday, August 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.

Thursday, August 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.

Wednesday, August 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.

Monday, June 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.

Friday, June 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.

Saturday, 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" »

Monday, April 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. ... 

Saturday, February 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.

Tuesday, December 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….

Sunday, November 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

Friday, November 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. ...

Sunday, October 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?  ...

Sunday, September 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"" »

Wednesday, August 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"" »

Friday, August 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.

Saturday, August 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" »

Monday, June 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"" »

Friday, 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. ...

Tuesday, 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.

Sunday, 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.