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April 25, 2005

Why Oh Why Can't We Have a Better Press Corps? (National Review: "It Is Their Stupidity We Should Fear..." Edition)

John Stuart Mill said: "Lord, enlighten thou our enemies... sharpen their wits, give acuteness to their perceptions and consecutiveness and clearness to their reasoning powers. We are in danger from their folly, not from their wisdom: their weakness is what fills us with apprehension, not their strength."

A poor and stupid right wing is a dangerous menace--to the rest of us as well as to itself. And we are informed that, yes, we have yet another example from National Review, as we watch PGL from Angry Bear engage in yet another battle of wits with one of National Review'smany unarmed man--one who, it seems, doesn't know the difference between annual and quarterly profit numbers:

Angry Bear: "Jerry Bowyer has produced some incredibly bizarre spin with his BuzzCharts rants with the latest being an attack on something Paul Krugman recently wrote (surprise).... [T]he latest chart seems to say something other than what Jerry wrote.... "Corporate profits per payroll job in 1998 were $14,928.90. Corporate profits per payroll job in 2004 were $21,593.51."... I looked at his numbers and thought that the 1998 after-tax profits per payroll job were quite high. BEA reports that after-tax corporate profits were $469.96 billion for 1998 and BLS reports payroll employment that averaged 125.924 million for 1998. So Jerry's number is four times what it should be. Did he take the quarterly flows (annualized) and sum them--rather than average them?

It sure looks like it. I can't match $21,593.51 for 2004. I can, however, get close: divide after-tax corporate profits for 2004 by non-agricultural payroll employment for 2004, and I get $5,447.22. Multiply that by four--as National Review might well do if it does not understand how the data are reported--and I get $21,788.87.

This, of course, leaves to one side the question of why in God's Holy Name National Review would want to divide corporate profits by payroll employment. A huge number of people who are on payrolls don't work for corporations: 21 million of them work for the government, and a host of others for partnerships and sole proprietorships. A bunch of people who are not on non-agricultural payrolls work for corporations as well. Moreover, you miss a good third of economy-wide profits by restricting yourself to corporate profits. Either (a) divide corporate profits by corporate employment, or (b) divide total profits by private employment. Corporate profits divided by a measures of private plus public employment is not sensible--even if you knew enough about the data to avoid accidently multiplying your result by four.

Isn't there anyone on National Review's masthead who cares enough to hire people who understand what they are writing about--who don't produce total dreck because they're too lazy to learn what the numbers they are throwing around are?

Posted by DeLong at April 25, 2005 02:18 PM