March 26, 2003

Why Can't Reporters Do a Better Job?

The Economist seems to be slipping lately in the quality of its economic reporting. One reads paragraphs like:

Taxing Times: ...Economists are divided about the wisdom of slashing taxes in this way, without trying to balance the books. Last month, around 450 economists, including ten Nobel laureates, openly criticised the tax-cut plan: in response, the White House quickly marshalled support from economists who took a different view. Mr Bush has been arguing that his tax cut will itself have a beneficial impact on economic growth, and that as a result the deficits projected under current methods will turn out to be overly pessimistic...

And one wants to scream. What "...economists who took a different view..."? Alan Greenspan--number one Republican economist--who says that now is definitely not the time to cut taxes? Douglas Holtz-Eakin--until two months ago Chief Economist at Bush's Council of Economic Advisers--who, now that he heads the Congressional Budget Office and is out from under Karl Rove's message discipline, politely says that it is "not obvious" why anyone would think the tax cut would have a beneficial effect on growth? Bush's own ex-Treasury Secretary Paul O'Neill, who says that shoring up Social Security would be much better than more tax cuts? The fact that the CBO--controlled by Republicans for a decade now--thinks that the dynamic scoring argument is a big fat zero?

The fact that the Bush Administration cannot hold a significant fraction of its own appointees "on message" after they leave the Administration is a powerful and important signal that its "analytical judgments" are simply lies. Yet the Economist prefers to turn it into a "he said, she said" story--leading the average reader without copious spare time to conclude that this is just another random political dispute that outsiders cannot untangle.

When I get annoyed enough to get in the face of reporters (not, I hasten to say, from the Economist) who I think fail to carry their weight, and ask them why they do this--why they turn everything into a Point-Counterpoint bald recital of positions, rather than helping guide their readers to understand what is the better argument, or the near-consensus position, I tend to get one or both of two responses:

  • I can't do my job without White House cooperation: if I call them liars, they'll shut me out--then I won't be able to write any stories, and my editors will fire me. I have to keep my sources tamed.
  • Besides, there are clues scattered in the article that a careful reader can use to understand what is really going on.

Posted by DeLong at March 26, 2003 07:17 PM | TrackBack

Comments

My question is what if Greenspan cuts to 0 (or worse yet he does not) and the war spending is not enough to get us out of the recession? Republicans seem to oppose ANY increase of goct spending and insistent that every tax cut be permanent and hurt the long term budget outlook. (By the way, since Greenspan presumably would not increase interest rates would the govt spending multiplier be greater at say 1.9 as opposed the .6 multiplier that would happen if Greenspan were to keep money supply the same and allows govt spending to increase interest rates?)

I am also wondering what the mainstream estimate of how much long term deficits increase long term interest rates.

Posted by: Bobby on March 26, 2003 09:05 PM

rather Greenspan would not allow the increase of govt spending to increase interest rates?

Posted by: Bobby on March 26, 2003 09:09 PM

Greenspan thinks that he doesn't have to cut to zero--that all that has to happen is for Saddam Hussein to fall, and then the recovery will take off.

For mainstream estimates, go look up Peter Orszag and Bill Gale at the Brookings Institution. They usually base their central case estimates on a set of principles set out by Doug Elmendorf and Greg Mankiw...

Posted by: Brad DeLong on March 26, 2003 10:04 PM

Interesting that you say this. It was recently time for me to renew my subscription to
the Economist, and I thought twice before doing so. And if things go on like this,
I won't be reviewing it next year.

I think the magazine has done damage to itself over Bush, to whom it has been much
more indulgent than it should have been, both in internal, and in foreign policy.

This does not mean that I want them to agree with me (my positions are roughly in
alignment with Paul Krugmann), I have never expected to agree with them about
everything; part of the pleasure is disagreeing. However, recently I have found
that where Bush is concerned, ther has been nothing worth disagreeing with in any
constructive, intelligent sense. It is like the mag has been infected by sleepers from
a right wing thinktank.

For instance their analysis of Bush foreign policy has never acknowledged the amount
of substantial debate on the pros and cons. It has started with the assumption that
Kagan is right, and let us tell you - which they have not done effectively - why others
are wrong. Note that Philip Bobbit, of all people, recently wrote

These are difficult questions and I cannot be certain I am right;
it gives me pause that so few of the many people whose views I
respect in Britain support the Iraq policy of the president and the
prime minister. (source, Prospect magazine, correspondence
with Robert Skidelsky)

The economist has never given intellectually honest coverage of this side of the
argument, never mind actively engaged with it. Precisely the same holds with
respect to Krugman's criticism of current domestic policy. Note, in neither case,
am I expecting them to agree with me; I just expect intellectual
engagement, rather than ideology.

Without thinking too closely, I think I probably date the decline to the 'Just Go'
cover they ran a few years ago.

Anyway, if the Economist does not pull its socks up a bit, I may not be renewing
my subscription next year. I think this is a shame.

Note: personal comments, nothing to do with IBM!

Posted by: Sean Matthews on March 27, 2003 02:58 AM

Sean, I absolutely agree - the Economist has beome much more *predictably* ideological, much less concerned with careful analysis and getting detail right, and even much less lucid in its prose, in the last few years. I think they changed editors about three years ago, and that's when the rot set in (sorry, don't have time to verify). I too am thinking about not renewing.

As for "Besides, there are clues scattered in the article that a careful reader can use to understand what is really going on", well that's exactly what people used to say about Pravda. Its a disgrace that a free press has sunk so low that its readers need Soviet-era skills.

Posted by: derrida derider on March 27, 2003 03:54 AM

Brad, it's just a guess, but if there are flaws in the reporting that support the editorial line of the pupblication, then perhaps it's not the reporters.

And if things are as Sean has saiad, then it's not a reporter, or a story, or even an editor. The guys running the magazine have decided on the conclusions. All reporting and editing can either go along, or look for new jobs, or resist and run the chance of suddenly 'spending more time with their families'.

Posted by: Barry on March 27, 2003 04:08 AM

I think the time hs come for a renewed and thorough (re)flogging of supply-side economics. Somehow the ignominy associated with it has flickered and died, and politicians again are trying to invoke its ideas with impunity. We cannot say that success is achieved until the label "supply-sider" and its ideas are badges of shame (sorta like being a follower of Lyndon LaRouche).
I found a ghastly piece of garbage by Stephen Moore et al. at:

http://www.cato.org/pubs/pas/pa-261.html

THis article supposedly refutes 12 "fables" about supply-side economics.
I think that most of the issues of the debate can be crustalized and won if you show that Reagan's tax cuts had no more than a negilible effect upon saving and labor supply and refute the arguments made by Moore, which should not be difficult for any trained economist (Fables 2,3,5 - 10 should be easy to refute while the rest are either not important to the current debate or plain old lying with statistics).

Posted by: Bobby on March 27, 2003 04:18 AM

One thing that seems to get lost in this debate is that it matters a lot not just HOW MUCH you spend but WHAT YOU SPEND IT ON. A deficit created by giving tax cuts to millionaires does not have the same effect as an equivalent tax cut created by strengthening schools and repairing roads. In short, one must ask whether the money that is spent generates the future revenue stream to pay off the debt incurred. This can happen either because you make a good investment with the money spent or because the spending itself stimulates the economy and growth generates enough new money to make it all come out ok. The second question was answered this week by the failure of Bush's tax cuts to look good even when looked at "dynamically". The answer to the first is pretty obvious - money given to millionaires and them military arent obvious ways to build our capital base.

Posted by: steve on March 27, 2003 06:59 AM

I have recently done some research for a book on electricity deregulation.
When you go through The Economist archives, you realize how they can be ideologically blinded. They have consistently been proven wrong:
- they hyped energy trading and Enron,
- for years, they have been promising the development micro power supposedly obstructed by traditional utilities (which if you think about it, doesn’t make sense at all, if electric monopolies are so inefficient, it should on the contrary be a boost for micro power)
- they can’t see obvious inconsistencies: oblivious in the same article (in 1999), they praised the European Commission for trying to create a “single European Market for electricity” removing all barriers to cross-border electricity trade while also predicting that the future lies in micro power and distributed generation which would make the transmission lines largely irrelevant,
- they regularly hype wind power without ever mentioning the unpredictability of wind generation which without affordable storage technology for electricity condemns it to a marginal status,
- they adamantly refused any price cap in California and dismissed allegations of market power (whose possibility was obvious for anyone knowing the power sector)
- they hyped “retail competition” for electricity supply whose benefits are at best unproven,
- they even hyped convergence between telecoms and electricity supply (the only convergence so far has been in bankruptcies among companies).

To sum it up, their articles on energy are written by journalists who don’t know what they are talking about. In addition, they don’t seem to learn from their mistakes.

I used to be a regular reader but I did not renew my subscription.

Posted by: fberthol on March 27, 2003 07:56 AM

Let's not be too hasty in condemning the Economists. Note that the BBC last month reported:

"Three Nobel prize winning economists have stepped forward to support President George W Bush's tax cut package, in response to 10 who condemned it earlier this week.

The National Taxpayers Union has sent a letter signed by 115 economists to the US Congress supporting the policy."

The article can be found at:
http://news.bbc.co.uk/2/hi/business/2754283.stm

Posted by: James Picerno on March 27, 2003 09:50 AM

To follow on the last:

They also seem to have an inordinate fondness for carbon sequestration.

I started reading it in about 1995, and they were slightly partisan in the 1996 election - every week, they'd pick a new poll to show that Dole was surging and Real Soon Now (tm) would pull ahead. Of course, they never came back to tell you how the previous week's poll showed him crashing back down.

But with impeachment, they really lost it. They couldn't avoid joining the right-wing echo chamber, and have been stuck there ever since, unwilling to criticise the Administration too strongly. Come on - when Bush got the steel tariffs, their response was "some free trade advocates are upset". What?!?! I thought The Economist WAS a free trade advocate! Where's the outrage?

At this point, if an article deals even tangentially with Bush or Clinton policies, or an election anywhere in the US, I have to take everything with a huge block of salt.

Posted by: Ethan on March 27, 2003 09:53 AM

The thing about the Economist that people need to understand is that as an organization its a very different animal from pubs like Businessweek or Time. Essentially, it provides synopses and commentary on articles published in other sources, and has hardly any news-gathering resources of its own. This is one of the central reasons the Economist makes money hand over fist for Pearson year in and year out: its a very lean organization. What this means is that if other mainstream news sources don't do the legwork on a particular topic (i.e. weak support for Bush's tax plan amongst economists), don't expect the Economist to pick up the slack. They have neither the inclination nor the resources to investigate stories themselves. Andrew Sullivan had a cover story in The New Republic on this very topic a few years ago.

Parenthetically, I too used to be an avid Economist reader, subscribing continuously for perhaps eight years. I let my subscription lapse when I moved out of the US for a time, and when I returned, found to my surprise that I didn't miss it at all. In the pre-internet days, when Americans had very few sources of international news, the Economist was the only game in town. These days, why bother getting your news filtered through the Economist's blinkered Oxbridge mentality when you can get it from so many other sources?

Posted by: David Benoff on March 27, 2003 10:46 AM

The thing about the Economist that people need to understand is that as an organization its a very different animal from pubs like Businessweek or Time. Essentially, it provides synopses and commentary on articles published in other sources, and has hardly any news-gathering resources of its own. This is one of the central reasons the Economist makes money hand over fist for Pearson year in and year out: its a very lean organization. What this means is that if other mainstream news sources don't do the legwork on a particular topic (i.e. weak support for Bush's tax plan amongst economists), don't expect the Economist to pick up the slack. They have neither the inclination nor the resources to investigate stories themselves. Andrew Sullivan had a cover story in The New Republic on this very topic a few years ago.

Parenthetically, I too used to be an avid Economist reader, subscribing continuously for perhaps eight years. I let my subscription lapse when I moved out of the US for a time, and when I returned, found to my surprise that I didn't miss it at all. In the pre-internet days, when Americans had very few sources of international news, the Economist was the only game in town. These days, why bother getting your news filtered through the Economist's blinkered Oxbridge mentality when you can get it from so many other sources?

Posted by: David Benoff on March 27, 2003 10:48 AM

The thing about the Economist that people need to understand is that as an organization its a very different animal from pubs like Businessweek or Time. Essentially, it provides synopses and commentary on articles published in other sources, and has hardly any news-gathering resources of its own. This is one of the central reasons the Economist makes money hand over fist for Pearson year in and year out: its a very lean organization. What this means is that if other mainstream news sources don't do the legwork on a particular topic (i.e. weak support for Bush's tax plan amongst economists), don't expect the Economist to pick up the slack. They have neither the inclination nor the resources to investigate stories themselves. Andrew Sullivan had a cover story in The New Republic on this very topic a few years ago.

Parenthetically, I too used to be an avid Economist reader, subscribing continuously for perhaps eight years. I let my subscription lapse when I moved out of the US for a time, and when I returned, found to my surprise that I didn't miss it at all. In the pre-internet days, when Americans had very few sources of international news, the Economist was the only game in town. These days, why bother getting your news filtered through the Economist's blinkered Oxbridge mentality when you can get it from so many other sources?

Posted by: david benoff on March 27, 2003 11:12 AM

The sad thing is that all of us once thought the Economist a fine paper, a decent way to become informed. That seems to have changed. I have recently stopped my subscription because of the Economist's attitude to the Bush Administration, but I would disagree that access to other (electronic) news sources is the reason a lot of us feel the urge to stop reading. I think it has far more to do with the words being written, and not how they are posted.

Posted by: Stephen Kinsella on March 27, 2003 11:50 AM

"Republicans seem to oppose ANY increase of goct spending and insistent that every tax cut be permanent and hurt the long term budget outlook. "

Which Republicans would those be? Every budget that Bush proposed, and every budget that Bush's congress passed, featured a net increase in spending.

"they adamantly refused any price cap in California and dismissed allegations of market power (whose possibility was obvious for anyone
knowing the power sector)"

Well, it was the existing retail price caps that converted rising wholesale prices into rolling blackouts. If you want shortages, price caps are the way to go.

"One thing that seems to get lost in this debate is that it matters a lot not just HOW MUCH you spend but WHAT YOU SPEND IT ON. A deficit created by giving tax cuts to millionaires does not have the same effect as an equivalent tax cut created by strengthening schools and repairing roads. "

Federal money spent on "strengthening schools" might as well be set on fire for all the good it will do.

Posted by: Ken on March 27, 2003 01:17 PM

http://www.nytimes.com/2003/03/27/opinion/27HERB.html

March 27, 2003

Casualties at Home
By BOB HERBERT - NYTimes

WASHINGTON On Tuesday, as President Bush was asking Congress for the first installment of the hundreds of billions of dollars needed to finance the war in Iraq and its aftermath, the students and teachers at a high school within walking distance of the White House were struggling through their daily routine in a building that has no cafeteria, no gymnasium, no student lockers, not even a fully reliable source of electricity.

A few weeks ago bricks were falling from the facade of the building, which is more than 100 years old.

As we continue the relentless bombing of Baghdad, which the military tells us is the necessary prelude to saving it, it's fair to ask when the rebuilding of essential institutions like the public schools will begin here at home. (Don't hold your breath. The money for that sort of thing has completely evaporated.) ...

Posted by: jd on March 27, 2003 01:31 PM

March 27, 2003

Panel Finds Manipulation by Energy Companies
By RICHARD A. OPPEL Jr. - NYTimes

WASHINGTON California electricity and natural gas prices were driven higher because of widespread manipulation and misconduct by Enron and more than 30 other energy companies during the 2000-2001 energy crisis that threatened the state's solvency, federal energy regulators said today....

Posted by: jd on March 27, 2003 01:35 PM

If not The Economist, then what? I don't know another single news source approaching its commitment to depth and breadth.

Posted by: Chris on March 28, 2003 09:17 AM

Breadth, I'm with you. But depth? Except for their admittedly excellent special sections, the vast majority of stories are in the 500 word range, with ZERO original reportage.

Posted by: David Benoff on March 28, 2003 11:45 AM

You are correct about the shortcomings of ZERO original reportage. By depth, I can mean historical context, which the Economist writers consistently provide.

I'm serious, though, what's a substitute for The Economist, short of subscriptions to several international dailies and some thick policy journals?

I would like to switch, too.

Posted by: Chris on March 28, 2003 12:13 PM

maybe a little spending to strengthen schools in the past would have helped ken out. hehe

I think what steve was saying (on how to spend Fed. funds) is that spending (through tax cuts) on the wealthy will increase long term deficits for short term consumption. If you invest money in things with long term returns, like education, in theory the debt will be payed off through higher GDP growth.

To retort to Ken's comment on wholesale energy price caps in CA.: there is now proof that shortages were created in a manipulated market. oddly enough price caps in such a situation might have increased the amount of power available. there would no longer be an incentive to cut supplies to raise prices, so a producer would want to sell as much as profitable at the (high) capped price. While I admit that theory may not hold; I repectfully suggest that to analysize the situation as if regular market forces were applicable is an error.

As for Bush raising spending each year: yes he has. whatever happened to "fiscal responsibility"?

I have been disappointed by the Economist lately as well, but I thought it was just me. Perhaps they think the ends justify the means: they want republicans, so they go along with the bad policies without too much real analysis.

Posted by: markmeyer on March 30, 2003 12:53 PM

maybe a little spending to strengthen schools in the past would have helped ken out. hehe

I think what steve was saying (on how to spend Fed. funds) is that spending (through tax cuts) on the wealthy will increase long term deficits for short term consumption. If you invest money in things with long term returns, like education, in theory the debt will be payed off through higher GDP growth.

To retort to Ken's comment on wholesale energy price caps in CA.: there is now proof that shortages were created in a manipulated market. oddly enough price caps in such a situation might have increased the amount of power available. there would no longer be an incentive to cut supplies to raise prices, so a producer would want to sell as much as profitable at the (high) capped price. While I admit that theory may not hold; I repectfully suggest that to analysize the situation as if regular market forces were applicable is an error.

As for Bush raising spending each year: yes he has. whatever happened to "fiscal responsibility"?

I have been disappointed by the Economist lately as well, but I thought it was just me. Perhaps they think the ends justify the means: they want republicans, so they go along with the bad policies without too much real analysis.

Posted by: markmeyer on March 30, 2003 12:54 PM

I discovered The Economist shortly before the first Gulf war, and found it very interesting, so enjoyable I was always expectant for the following week number. Still I feel that it began declining when Rupert Tennant-Rea left to work at the Bank of England, whilst it is always an interesting source, it no longer carries the same punch, and its recepts are too previsibles. And exceedingly pro USA for its good.


DSW

Posted by: Antoni Jaume on March 30, 2003 02:20 PM

"I'm serious, though, what's a substitute for The Economist, short of subscriptions to several international dailies and some thick policy journals?"

I'm afraid there isn't one, though there are a few smaller publications which do good jobs on regional issues (e.g., NACLA Report on the Americas). Basically, the Economist's strength is that is has a well-agreed, broadly libertarian philosophy which it uses to view all events. Recently, this philosophy has started to become unglued in light of their badly disguised desire to support Bush (their Nov. 2000 endorsement of Bush for Pres. might not have been so bad if they hadn't acknowledged the disaster his fiscal policies would cause and then brushed it off with a dismissive "oh, it's just a campaign promise; he'll scale it back").

For an alternative, you either need to bring back the pre-2000 editorial staff or establish a true non-libertarial alternative. Unfortunately, for the latter one would have to get together all the broad left-of-center economic theories into a single whole, which is like trying to mix together a dozen different types of viscous oil (prominent left-wing economists dislike each other almost as much as they dislike the right). Good luck.

Posted by: andres on March 31, 2003 12:09 PM

So, it's not just me!

I used to be an avid Economist reader for over ten years, and it's been a very positive experience -- had a major influence on my writing skills, and more importantly in my journey from muddled-somewhat-left-of-center to the libertarian-in-training position espouse today.

However, recently the magazine's been slipping: the writing quality, the analysis (their largely non-skeptical support of all matters Bush, among many others) and the business predictions.

I don't think there's any other alternative out there but could be mistaken. Slate is not international enough, and that was the only serious contender.

Solution: we need to bring back the good old Economist.

Posted by: Prashant P Kothari on April 21, 2003 12:56 AM

So, it's not just me!

I used to be an avid Economist reader for over ten years, and it's been a very positive experience -- had a major influence on my writing skills, and more importantly in my journey from muddled-somewhat-left-of-center to the libertarian-in-training position espouse today.

However, recently the magazine's been slipping: the writing quality, the analysis (their largely non-skeptical support of all matters Bush, among many others) and the business predictions.

I don't think there's any other alternative out there but could be mistaken. Slate is not international enough, and that was the only serious contender.

Solution: we need to bring back the good old Economist.

Posted by: Prashant P Kothari on April 21, 2003 12:56 AM
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