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November 28, 2005

Why Oh Why Can't We Have a Better Press Corps? (Stumbling-and-Mumbling Eviscerates the Times)

It's nice to see that our economist cousins in the land of roast beef and plum pudding have eaten their wheaties this morning:

Stumbling and Mumbling: Degrading economic reporting : The Times confirms why I couldn't work for a conventional dead tree. It reports these figures (pdf), showing a fall in research and development spending as a "blow to Gordon Brown." Economic issues are thus subordinated to the worst soap opera in the country. There are two things that are offensive about this.

First, the figures could be a blow to all of us, because they might lead to slower economic growth generally.The link here is both causal and diagnostic. Lower R&D spending could cause slower technical progress, which is the main contributor to long-run GDP growth. And it could be diagnostic of slower growth, as it signifies that firms are pessimistic about the future.

Second, there are interesting questions here. Why is R&D spending falling when interest rates are low and corporate cash balances healthy? Have firms cut the productive or unproductive parts of R&D spending? Can they tell?

But the dead tree ignores these issues. All that matters to it is the fleeting convenience, or not, of some politician.

Posted by DeLong at November 28, 2005 12:41 PM