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January 14, 2005

More Shrill Critics of George W. Bush...

According to Bob Somerby, the New York Times's Elizabeth Bumiller counts Secretary of the Treasury John Snow, Secretary of Labor Elaine Chao, Secretary of HHS Tommy Thompson, and Social Security Commissioner Jo Anne Barnhart among the shrill critics of George W. Bush. They, after all, are the people saying that "the [current] system would be able to pay three-quarters of promised benefits four decades from now."

The Daily Howler: And inevitably, the latest disaster in Gotham! The utterly hapless New York Times assigned Elisabeth Bumiller to this story, and the trembling typist seemed to find it too “frightening” to deal with Bush’s misstatements. Here is her hapless attempt to report on Bush’s huge howlers:

BUMILLER (1/12/05): Many Democrats and economists say that Mr. Bush is exaggerating the problem, and that Social Security could be fixed with modest tax increases and a cut in benefits. Even without changes, Mr. Bush's critics say, the system would be able to pay three-quarters of promised benefits four decades from now, when baby boomers have long retired.

Incredible! According to this hapless scribe, “Bush’s critics” say SS will be able to pay three-quarters of benefits! But in fact, that’s what the SS trustees say, in their official report on the subject—and the CBO says something rosier! Amazing, isn’t it? Bumiller takes an official report and treats it like a screed from Bush critics! Question: Why is this hapless, inept, frightened tool still typing for this weak, hopeless newspaper?

Posted by DeLong at January 14, 2005 03:46 PM

Comments

Here is a decent writeup from Jeanne Sahadi, CNN/Money senior writer:

Myths, half-truths and exaggerations
Here are just 5 swirling around the Social Security reform debate.
http://money.cnn.com/2005/01/13/retirement/straight_dope/index.htm?cnn=yes

Posted by: CalculatedRisk at January 14, 2005 04:02 PM


If you're not reading the Daily Howler every day, you should be. Even before you read Fafblog. That's all I'm going to say.

Posted by: joe at January 14, 2005 04:25 PM


And still the best newspaper in the country, overall?

Posted by: Invigilator at January 14, 2005 05:11 PM


I second reading the Daily Howler. It's eye-opening. I give Brad D. a close second in the pointing out of media hypocrisy category. Also, if you like Fafblog, you should make sure you visit Jesus's General.

Posted by: Unstable Isotope at January 14, 2005 05:38 PM


As long as we're mentioning blogs, Billmon has reopened the Whiskey Bar. Let's hope he starts keeping regular hours.

Posted by: Dubblblind at January 14, 2005 07:21 PM


"Question: Why is this hapless, inept, frightened tool still typing for this weak, hopeless newspaper"

Uhm, I think you answered your question quite well just by asking it.

Posted by: 1MaNLan at January 14, 2005 07:30 PM


If only the Little Father knew what the Cossacks are writing. . . .

Posted by: jam at January 14, 2005 07:38 PM


How well has the CBO done in it’s past predictions with regard to SS?

“At the end of October 1982, the balance in the OASI Trust Fund amounted to $10.0 billion -- about $1 billion less than the amount needed to pay benefits in early November.” http://www.ssa.gov/history/reports/gspan17.html

Did the CBO see this short fall coming? Nathan Keyfitz (professor of mathematical demography and consultant to SS) correctly predicted trouble in 1980. If the CBO has a good track record then its projections have credibility.

There’s nothing new about predictions that SS will face trouble. For example in 1997 the GAO said, “Without remedies, the trust fund will be depleted by as early as 2032, and revenues will fund only 70 to 77 percent of benefits paid.” (Retirement Income: Implications of Demographic Trends for Social Security and Pension Reform - GAO/HEHS-97-81, Washington, July, 1997.)

Posted by: A. Zarkov at January 14, 2005 07:45 PM


Ooooooh! 20 years ago, the CBO was wrong. Never trust THOSE guys again!

Posted by: John Emerson at January 14, 2005 08:50 PM


I don’t necessarily mistrust CBO, but I do want to know why I should trust them or anyone else to make long-term predictions. The prediction business is fraught with peril. It’s one thing to predict the orbits of planets (that’s not easy either!), quite another predict the state of the economy and revenue streams 60 years out. The path to the future is not smooth, differentiable or Gaussian.

Posted by: A. Zarkov at January 14, 2005 09:45 PM


As joe and Unstable Isotope suggest, everyone should support the Howler in their attempts to make these so-called journalists more inquisitive and more accountable.

Posted by: Steve at January 14, 2005 10:28 PM


According to the St Petersburg Times, Bush said, in reference to the Armstrong Williams case: "I think there needs to be transparency and a clear line between people who profess to be a reporter and advocacy".

Do they take this idiot aside and say, in the best Seinfeld tradition, "George, it's not a lie if you believe it?"

Posted by: Steve at January 14, 2005 10:47 PM


Brad:

The way I read it, Bumiller implicitly defines "Bush's critics" as "Many Democrats and economists", which in turn implies that the criticism of Bush is not merely a matter of partisanship.

Since the set of people who endorse Bush's policies includes some who one might assume to be competent economists*, based on reading their vitae, a responsible journalist cannot state that all economists oppose those policies.

(*For example, going by the information at http://www.kudlow.com/corporate/bio.asp, one might be persuaded that the set of competent economists includes Larry Kudlow.)

Posted by: jm at January 15, 2005 07:10 AM


Perhaps I should have made it explicit that I am not persuaded that the set of competent economists includes Larry Kudlow.

Alas, I clicked "Post" before I found:
http://www.rochester.edu/pr/Review/V65N2/feature5.html

Posted by: jm at January 15, 2005 07:20 AM


A. Zarkov wrote, "How well has the CBO done in it’s past predictions with regard to SS?"

Not an unreasonable question.

But you have to compare their forecasting record (not just for SS) against that of OMB, etc.

Furthermore, how well has the Bush administration done in its predictions of *anything*, even short-term things like job growth? If you believe Brad's previous posts on that, nothing they say about macroeconomics is believable.

Posted by: liberal at January 15, 2005 08:13 AM


Perhaps I should have made it explicit that I am not persuaded that the set of competent economists includes Larry Kudlow.

That vermin !
When will they look at him for some armstrong williams style PAYOLA.
No way this creep can actually believe what he says if he is informed.
I'm a dope and I know that SS is NOT going bankrupt.
IT is an insidious plan to "shrink government".
More of the "you are on your own"Bush philosophy.
Much like "No child left behind" which is overloading teachers with paperwork, ruining the classroom experience for many , and threatening a cut of support for any school that can't do thhe extra work or meet the phony standards.

Posted by: Jim A. Sherman at January 15, 2005 08:14 AM


Bumiller is married to Steve Weissman, who is a Yalie (classmate of George Bush). According to Maureen Dowd, this makes her nothing more than a mommie.

Posted by: masaccio at January 15, 2005 10:22 AM


A. Zarkov claims correctly that predictions are fraught with peril, you can't see into the future. On the other hand every economic transaction is made with some implicit belief about the economy: buying, selling, investing all rely on believing that who you receive or will receive justifies giving up what you did. And this principle works for every transaction from putting a quarter in a gum ball machine to multi-billion dollar mergers. Or to bring the matter closer to home, the decision whether this is the right time to refinance your mortgage.

The question that he is ducking is whether, givin everything we know about the world, is a given projection or range of projections reasonable or not. And on this score the Social Security Trustees simply fail, to the point that you have to suspect dishonest motives. Take the numbers for the out years from the following chart, that is what is the ultimate rate of economic growth projected by the Trustees:
http://www.ssa.gov/OACT/TR/TR04/V_economic.html#wp159107
High Cost 1.3% Intermediate Cost 1.6% Low Cost 1.9%

That's it. Their best guess is that the economy will never settle in at a rate above 2.0%. In this model 1.9% is defined as optimistic. That is not a range of possible outcomes, that is a joke. But a very serious joke, because privatization relies on you accepting those numbers to prove "crisis" while simultaneously believing that some stocks will give back historic returns even given growth at these low levels. Or actually privatization relies on you never noticing these numbers at all. Because in every other context they are relying on growth numbers north of these whether that is to sell stocks as a savior or to justify tax cuts.

Some might reply that this is the natural caution of actuaries, but that is not the charge of the Trustees. They are supposed to present numbers that can be used to formulate policy. And to present 1.6% as your best guess as to the normal rate of growth over the next 75 years and to use that number to predict exhaustion in 2042 is fundamentally dishonest unless you are willing to apply that number to every other economic model you present.

Now compare to the 1997 report:
High Cost .3% Intermediate Cost 1.3% Low Cost 2.2%
Two things jump out. First they were presenting a much broader range of possible outcomes, in fact three times greater 1.9 percentage points to .6. Second we notice that despite strong performance between 1997 and 2004 their "optimistic" prediction for 2075 is ratcheted down .3 points. There is a reason for that, and it is called "outcome". The model is never allowed to show the Trust Fund overfunded, "Low Cost" always means in practice "fully funded and no more".
http://bruceweb.blogspot.com/2004/11/trust-fund-ratios-under-three.html
Stick the 2.2% number that was considered prudent in 1997 into the 2004 table and you have an overfunded Trust Fund.

They don't have honest numbers. And to simply dismiss this book cooking as an honest attempt given inherent uncertainties is just to put on blinders. The Bush Administration is lying to you - again.

Posted by: Bruce Webb at January 15, 2005 10:38 AM


Isn't this really all about diverting a continuous golden stream of uneducated money into the stock market, some of which will inevitably end up in the pockets of people like Larry Kudlow?

Posted by: Steve at January 15, 2005 11:07 AM


http://www.nytimes.com/2005/01/16/politics/16benefit.html

Agency Running Social Security to Push Change
By ROBERT PEAR

The Social Security Administration is preparing a major public relations campaign to market the idea that Social Security faces dire financial problems requiring immediate action and private accounts.

Posted by: anne at January 15, 2005 11:26 AM


Martin Wolk at MSNBC of all places rips into Bush dishonesty over SS.

http://msnbc.msn.com/id/6827519/

Josh Marshall is doing a great job of tracking the SS media debate and who stands where in Congress.

http://www.talkingpointsmemo.com/

Posted by: bakho at January 15, 2005 01:26 PM


Isn't this really all about diverting a continuous golden stream of uneducated money into the stock market, some of which will inevitably end up in the pockets of people like Larry Kudlow?

Oh yes you can count on that. Heck, they already did that once in 2001 when they chased all the little guys out and then bought the shares, ready for recovery.
Plenty people lost big.
They will do it again to your private accounts.
As one poster put it " make sure you save enough for a bullet."
J

Posted by: Jim A. Sherman at January 15, 2005 08:58 PM


The administration wants to borrow two trillion dollars to fix Social Security. As prudent planners, may we assume that they have already lined up the people willing to loan this money? We would be beholden to these people. Can we size them up? Are there plans for interviews, and personal profiles, so that we can view, and read, about them? What are the terms of the loan? Are they loan sharks?

Posted by: Lloyd at January 16, 2005 10:17 AM


Hard to believe that Elaine Chao could stray
from the script.

Posted by: SEC Overreach at January 17, 2005 06:29 AM


Wow, at current status quo social security weill be able to pay me a full 70% of the benefits they promise! You're right, that's technically not "bankrupt". What a great deal!

Either I'm going to have to live on 70% of the money they promised me after coercing me to play the game or they'll raise my taxes to make up for the shortfall. Sounds wonderful I can't imagine why anyone is concerned.

jb

Posted by: Joe Blow at January 18, 2005 02:42 PM


My, what a dishonest comment, Joe. You do realize, of course, that under Bush's proposal, you'd get even less than that 70%. And that that 70% will pay benefits higher than those paid today. And, of course, as well documented above, the predictions that lead to that 70% estimate are based on extremely pessimistic economic forecasts, which means that the odds are that we'll have only a minimal problem instead of this "crisis" that Bush is trying to pretend we are facing.

So you are correct, Joe: there is no real reason to be concerned.

Posted by: PaulB at January 18, 2005 10:54 PM