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Saturday, August 09, 2003

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Looks like the New York Times isn't going to run a correction on Paul Krugman's flat-out computational error about the growth rate of California state spending, and his flat-out misrepresentation of its purpose, in his week-ago Friday column. But today at least they ran this letter protesting his thoughtless parroting of the Center for Budget and Policy Priorities' lies in his Friday column.

"As deputy assistant secretary responsible for tax analysis at the Treasury Department from April 2001 to July 2003, I must respond to Paul Krugman's Aug. 5 column accusing it of political bias.

"Mr. Krugman objects to an analysis of the 2001 and 2003 tax cuts for six representative families, including a married couple, both 65, with $40,000 in income, including $2,000 in dividend income. He says that such a family is not representative of elderly taxpayers.

"Obviously, no single example can be representative of all elderly taxpayers, but this couple has income quite close to the median for filers their age, and dividends quite close to the average for elderly filers at that income level, about half of whom receive dividends. The couple in the example would see its income tax liability decline from $1,396 to $675 as a result of the tax cuts.

"Mr. Krugman is certainly free to oppose the tax relief, but he should be more circumspect in asserting political bias in the underlying analyses.


Posted by Donald L. Luskin at 9:21 AM | link  

Friday, August 08, 2003

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Another conspirator gets his blood money. A couple months ago it was Al Gore getting appointed to the board of directors of Apple Computer -- not because he invented the Internet, but as payola for crucifying Apple's competitor Microsoft on a cross of antitrust. This time it's Eric R. Dinallo, a legal pitbull in New York state attorney general Eliot Spitzer's office, who's getting a big executive job with Morgan Stanley -- one of the investment banks that he helped Spitzer plunder in his Wall Street stock research jihad. Gretchen Morgenson reports on this in the New York Times without a trace of irony -- she who did so much to cheer on Spitzer and Dinallo. But the fact is that this is far dirtier than payola. At least with Gore it was a straightforward bribe from a weak company that wanted the government to hobble a strong company. This is the protection racket -- where a strong company is forced hire a regulator to protect it from the regulators, using Dinallo's relationships to negotiate more effectively and, at the same time, sending a signal to other regulators that there are rewards for going easy. Your tax dollars at work. And your commission dollars.

Posted by Donald L. Luskin at 12:23 AM | link  

Wednesday, August 06, 2003

"SPEWS UTTER NONSENSE"    The Richmond Times-Dispatch blew off Maureen Dowd -- and replaced her with Paul Krugman! Talk about out of the frying pan and into the frying pan! Alert reader Jim Smyers dashed off this letter to them, which they have published...

"Krugman Spews Utter Nonsense

"Editor, Times-Dispatch: I know you had to find a looney-left replacement for the tedious and annoying Maureen Dowd, but did it have to be another Bush-bashing, truth-challenged New York Times fabricator of facts such as Paul Krugman?
His latest invective about Alan Greenspan - which accuses the Fed chairman of caving to the President on tax cuts, thereby increasing the deficit while not stimulating the economy - is utter nonsense. Krugman claims there are no positive economic indicators. Hello? How about rising durable-goods orders? Falling jobless claims? A continued rise in new home purchases? Oh, don't bother Krugman with the facts.

"As for the Bush tax cuts, a vast majority are back-loaded and haven't even been put into place yet and so have had no impact on deficits. The deficits can be attributed to weak tax revenues because of the sluggishness of the economy and excessive spending from both Capitol Hill and, unfortunately, the Bush White House. But Krugman's assertions are typical liberal spin, where there is never a good reason to cut taxes.

"In order to make the readers aware, there is a Website ( that has a regular feature entitled 'Krugman Truth Squad,' which dissects and rebuts the lies and distortions of this spinmeister."

Posted by Donald L. Luskin at 11:58 AM | link  

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Sound economic theory is ignored when it contradicts preconceived political agendas! Statistics are diabolically distorted in order to lie about the impact of tax policy! Talking points based on lies are provided to the media to discredit political opponents! Everything is political!

Am I describing Paul Krugman, America's most dangerous liberal pundit? Well, if the shoe fits... But actually I'm talking about what Krugman himself said about the Bush administration's supposed politicization of the Treasury Department, in his New York Times column yesterday, titled "Everything is Political." Oh... and the dumb rhetorical trick I just used to start this column is the same one Krugman used to start his.

In his column, Krugman once again pretends to be shocked, shocked... no, the only expression for it is shocked and awed! -- to learn that politics is going on in Washington DC. In an imagined bygone era of imagined politics-free government,

"Traditionally the Treasury, like the C.I.A., stands somewhat above the political fray. ...long-serving Treasury analysts traditionally ride herd on political appointees, warning them when their proposals are ill conceived or irresponsible. But under the Bush administration the Treasury takes its marching orders from White House political operatives."

According to Krugman, malign political influence has caused "the erosion of Treasury's intellectual integrity — an erosion exemplified by its denial and deception on the subject of tax cuts."

The single case of deception alleged by Krugman is an analysis prepared last June by Treasury for Tim Russert, host of NBC'S "Meet the Press." Russert was interviewing Democratic presidential hopeful Howard Dean, who has said he would repeal Bush's tax cuts, and the Treasury analysis armed Russert with examples of exactly how much the repeal would cost six different types of families. Krugman charges that the examples were "wildly unrepresentative." He says,

"...the Treasury's example of a 'lower income' elderly household was one receiving $2,000 a year in dividend income. In fact, only about one elderly household in four receives any dividend income, and only one in eight receives as much as $2,000. ...As Mr. [Martin] Sullivan [of Tax Notes] put it, 'If this continues, the Treasury's Office of Tax Policy may have to change its name to the Office of Tax Propaganda.'"

This seemingly juicy little "gotcha" doesn't pass the so-what test. Here's what Russert said about this "wildly unrepresentative" example:

"A married couple over 65 making $40,000 and claiming their Social Security, under Bush would pay $675 in taxes. You’re suggesting close to $1,400, a 107 percent tax increase."

Matthew Hoy pointed out on his blog that the "wildly unrepresentative" dividend component of this couple's income doesn't make much of a difference to the calculation. At most, Bush's tax cuts would reduce a 28% tax on $2000 to a 15% tax -- for a savings of $260, only about a third of the $725 savings in the example.

And Hoy asks, why didn't Krugman pick on this example also cited by Russert?

"A married couple with two children making $40,000 a year, under the Bush plan, would pay $45 in taxes. Repealing them, under the Dean plan, if you will, would pay $1,978, a tax increase of over 4,000 percent."

Hoy's answer:

"Well, because the majority of this couple's tax burden is relieved by the reduction in the marriage penalty and the per-child tax credit -- popular cuts that would elicit little sympathy with Krugman's argument if he attacked them."

And by the way, just whom is Krugman quoting when he says "'lower income' elderly household"? He makes the Bush administration seem ridiculous and elitist by having them define a household pulling $2,000 a year in dividends as "lower income." But the reality is that the Bush administration never said that. The analysis in question is not posted on the Treasury website, but I have a copy -- and I can assure you that the expression "lower income" appears nowhere (a very similar analysis was made available in early January, and "lower income" appears nowhere there, either).

The quotation marks, then, are a lie, and the Times -- lest it be seen as engaging in denial and deception -- is obliged to correct it. Alas, the Times almost never corrects Krugman, despite the long list of lies, errors and distortions we have cataloged here. But why not? After all, in it's infinite punctiliousness, the Times ran this correction six weeks ago about another quotation marks problem:

" article on Sunday in the special Women's Health section about reasons for exercising misplaced the quotation marks in citing advertisement for the New York Sports Club. The ad read: 'Exercise reduces the risk of cancer. Not to mention the risk of saggy butt.' (Both sentences were part of the quotation, not just the first.)"

And what about that "Office of Tax Propaganda" quote from Martin Sullivan of Tax Notes? I spoke to Sullivan, and it turns out that in the June 30 Tax Notes column that Krugman references, he wasn't even talking about whether or not Treasury's Russert examples were "wildly misrepresentative."  Instead, his concern was that the analysis was incomplete because it dealt exclusively with income taxes, and ignored other tax burdens -- especially the Social Security tax, which heavily burdens lower-income taxpayers.

Sullivan is correct that taking the entire tax burden into account would reduce the percentage increase in taxes resulting from Dean's proposed repeal. And he told me he thought it was deceptive that Treasury spoke only of "taxes," not "income taxes" in a document provided to Russert -- creating the false impression that all taxes were indeed being taken into account. It true that the word "income" did not qualify the word "taxes" in the summary document provided to Russert. But accompanying tables explaining each of the six example families were provided as well, and they made it abundantly clear that only income taxes were being considered.

Krugman touches on this concern of Sullivan's:

"Treasury has an elaborate computer model designed to evaluate who benefits and who loses from any proposed change in tax laws. ...But since George W. Bush came into power, the department has suppressed most of that information, releasing only partial, misleading tables... In a stinging recent article in Tax Notes, the veteran tax analyst Martin Sullivan writes of the debate over the 2001 cut that 'Treasury's analysis was so embarrassingly poor and so biased, we thought we had seen the last of its kind.' But worse was to come."

Sullivan confirmed to me his complaint that the Bush Treasury's "who benefits and who loses" analyses -- they're known in the trade as "distribution tables" -- have only dealt with income taxes. In that sense, as Krugman says, they are "only partial." But "misleading"? Sullivan told me, "We saw it first in 2001 right after the campaign -- that's when I said we'd seen the last of them. But in 2003 they’ve been issuing these distribution tables that are highly misleading, because they only talk about income taxes. And they don't say in the tables that's what they are doing."

But it turns out that the "veteran tax analyst" is mistaken about this. The distribution tables issued by Treasury in March 2001, January 2003, and May 2003 are all perfectly clearly labeled as being based only on income taxes.

Ultimately, Sullivan's deepest complaint is the fact that the "elaborate computer model" Krugman refers to is no longer being used to produce the distribution tables. Several current and former Treasury officials I talked to confirmed that staff at the Treasury's Office of Tax Analysis -- and Sullivan used to be a member of that staff -- are enormously proud of that model. Yet, in the end, it's just a model. And politics aside, economists are highly likely to disagree with each other about any model. As a current Treasury economist told me,

"Historically the distribution tables have been very controversial. They, themselves, have contributed to biased political arguments. They use the concept of 'family economic income' which can turn someone making only $40,000 a year into 'the rich' by doing things like imputing rental income on the house you own, as though you were renting it to yourself! And these tables are static -- they don't look at people's lifetime income, just a snapshot. People are moving between the income classes all the time, because they are getting older, or they had a good year or a bad year."

These are eminently reasonable -- and fundamental -- criticisms of the "elaborate computer model" that Krugman and Sullivan enshrine as an oracle. Steve Antler, an economics professor at Roosevelt University who blogs as EconoPundit, says that Krugman refuses to permit any criticism of the model, but instead "accuses professional economists, with whom Paul has an intellectual disagreement, of unethical behavior."

But what about the broader question? Has the Bush administration politicized Treasury? Hardly -- at least no more than it's ever been. Sullivan himself told me, "Democrat or Republican, as far back as memory goes, there's always White House influence on the Treasury. They're right next door to each other."

Yet biased liberal pundits like Krugman -- and biased liberal reporters like Jonathan Weisman of the Washington Post -- seem to have discovered politics for the first time, now, under a Republican administration. Weisman wrote last week in what passes as a news story that Treasury's providing that analysis to Tim Russert was an "unusually political step" that "is likely to become a staple for GOP attacks." Weisman has obviously forgotten about that time in 1996 when some Republican presidential candidates were advocating a flat tax, and the Treasury Department of Robert Rubin and Lawrence Summers came up with an analysis designed to torpedo it.

And Robert Musil has this memory of the Clinton-era Treasury on his Man Without Qualities blog:

"That's the Treasury Department that gave us Deputy Secretary Roger Altman (a college friend of Bill Clinton's) testifying before the Senate Banking Committee in February 1994 that he had given top White House officials a 'heads-up' on nine Resolution Trust Company criminal referrals that in one instance targeted Clinton's 1985 gubernatorial campaign, and named the Clintons as witnesses in others. A parade of administration officials then claimed under oath not to have remembered the Treasury-White House contacts, even though Joshua Steiner, the 28-year-old Treasury chief of staff who bore an alarming resemblance to a deer caught in one's headlights, had noted them in his diaries. Lloyd Bentsen, the Treasury Secretary, soon retired."

So don't take these accusations of politicization at Treasury to heart. As National Review Online colleague Bruce Bartlett told me, "This is a sign that Treasury Secretary John Snow is doing a good job -- otherwise these people wouldn't be complaining. The squeaky wheels are squeaking."

Posted by Donald L. Luskin at 3:36 AM | link  

Monday, August 04, 2003

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From readers, responding to my last two Krugman blogs...

Andrew Ortlieb was the first among several readers to catch another economic lie in Paul Krugman's August 1 New York Times column about the California budget crisis. Krugman wrote,

"As analysts at the nonpartisan California Budget Project point out, real state spending per capita was only 10 percent higher in 2002-03 than it was in 1989-90 — that is, most of the spending growth was simply a matter of keeping up with the population and inflation."

I noted yesterday David Hogberg's great catch -- the California Budget Project analysis cited by Krugman shows the growth to be 13.4%, not "only 10 percent." But Ortlieb takes it further:

"Mr. Krugman's claim is that the spending increase was 'only 10 percent,' which was, '...simply a matter of keeping up with inflation and population.' Regardless of whether the increase is 10% or 13.4%, the base numbers are per capita and in constant 2002-2003 dollars. In other words, inflation and population growth are factored out!"

In other words, Krugman's statement gives the false impression that the "only 10 percent" growth was, itself, undertaken to match inflation and population -- yet those considerations had already been included in the very growth rate that Krugman cited. It's a clear case of double counting, designed to minimize the size of California's spending growth in order to make a political point. Ortlieb wonders,

"Is there any proof that this dude is actually an economist? You know, it's possible to buy fake degrees off the internet."

Michael Dowding read the Barron's article lauded by Krugman -- the one in which Alan Abelson calls Admiral John Poindexter "Adm. Pointyhead," and chides him for his plan to develop a futures market in terrorist events. I should have forced myself to read to the end of the vile thing, as Dowding did. He points out the irony of the last paragraph, considering that Princeton professor Krugman is on record favoring this kind of market:

"This misbegotten creation, as noted, was spawned in academe and a smattering of professorial types, mostly from business schools, rose to its defense with an impressive array of specious reasoning. Which once again proves the wisdom of George Bernard Shaw's dictum that those who can't do, teach."

To which I can only add Luskin's dictum: those who can't teach, teach economics.

Posted by Donald L. Luskin at 11:56 PM | link  

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Think of this website as one of those purple lights that zap bugs dumb enough to keep flying into them. And think of the lies, distortions, biases and misquotations in Paul Krugman's New York Times columns as the bugs. What's that sound I hear? Zap! Zap! ZZZZAAAAAPPP! My, there are a lot of bugs today...

In Friday's column, Krugman describes a fantasy version of California's "slide into irresponsibility" in which big budget deficits are caused by irresponsible tax-cuts (not irresponsible spending), and it's all the fault of feckless Republicans (in a state utterly dominated by Democrats). Now Krugman is a very fancy economics professor from a very fancy Ivy League college, so we can at least assume he's got the budget math right. Can't we?

ZAP! David Hogberg caught Krugman in a humiliatingly simple math error, which surely the Times will be obliged to correct. Krugman wrote,

"As analysts at the nonpartisan California Budget Project point out, real state spending per capita was only 10 percent higher in 2002-03 than it was in 1989-90 — that is, most of the spending growth was simply a matter of keeping up with the population and inflation."

But Hogberg went to the CBP's website to fact-check this claim (Lord know the Times won't bother to do it). Hogberg notes in his Cornfield Commentary blog that CBP states,

"Per capita spending was $2,211 in 2002-03, as compared to $1,950 in 1989-90 (in 2002-03 dollars)."

Now let's see... I'm no Princeton professor -- I'm a Yale drop-out, in fact -- but I think Hogberg is right when he says that spending growth from $1,950 to $2,211 is 13.4%, not "only 10 percent." How can this be? Is it an innocent error? Is it rounding? Or maybe Krugman thinks that 10% sounds better with the word "only" in front of it than 13.4% does.

Remember the last time the Krugman Truth Squad caught the great economist in this kind of obvious error? It was back in April, when Krugman invidiously compared the ten-year cost of President Bush's tax cuts to the one-year wage associated with the new jobs it would create, in order to make the tax cuts seem absurdly large. Oh, how he and the rest of the leftist economics swarm howled when that bug got zapped! He wrote lame rationale after lame rationale on his website about it -- my favorite was when he wrote, pleadingly, "I am a competent economist, and know how to use numbers."

Well, what can we say? I'll just quote the oft-repeated refrain of Krugman's buddy and apologist, the leftist UC Berkeley economist Brad DeLong -- why oh why can't we have a better press corps?

What about that "nonpartisan California Budget Project"? ZAAAP! Matthew Hoy points out on his blog that the CBP may be "nonpartisan," but it sure isn't non-leftist. Hoy notes that the CBP describes its mission as "Working to improve the economic and social well-being of low and middle income Californians..." It's funding comes from a number of left-leaning foundations, including the Streisand Foundation. As Hoy puts it: "yes, that Streisand."

If "nonpartisan" is what Krugman is looking for, then as D. J. McGuire suggested to me in an email, he should look at the work of the "nonpartisan" Cato Institute. In a recent report, Cato noted that California's real state spending per capita grew not "only" 10%, or even "only" 13.4% -- it grew 25.9%. What makes the difference? The "nonpartisan" Cato Institute measured from 1990 (the prior peak) to 2001 (the recent peak) -- that's the true measure. The "nonpartisan" CPB measured from 1990 to 2003, after some spending restraint had already gone into effect. ZAP-AP-AAAAAP!

Whatever the spending growth has been, Krugman justifies it by saying that most of it went to "the effort to hire more teachers and repair decrepit school buildings." That was necessary, according to Krugman, because "Proposition 13, the 1978 cap on property taxes, led to a progressive starvation of California's once-lauded public schools."

As a parent, I'm always somewhat put off when a childless person like Krugman shoots off his mouth about what's wrong with public schools, usually concluding that throwing money at them is the answer. The reality here in California, 3000 miles from Princeton, is that the schools are not much better than they were a decade ago -- even after throwing a lot of money at them.

So we can't cut spending (because, according to Krugman, it hasn't been growing excessively to begin with, and what growth there has been was mostly for education). So let's raise taxes. That leaves Robert Musil wondering, on his Man Without Qualities blog, why Krugman, an economist,

"...doesn't even ask the most basic question: Can California raise taxes without damaging the State's economy through creating an even more uncompetitive business climate? The answer is almost certainly 'no.' According to the latest data (1999-2000) from the U.S. Department of Commerce’s Bureau of the Census, California is eighth highest among the states when tax burden is compared on the basis of personal income and seventh-highest per capita..."

But Krugman pretends that the problem is that Republicans -- a minority in the state legislature, won't "make realistic proposals for spending cuts." James Sherk, senior fellow for economics at the Evangel Society, pointed out to me in an email that the "nonpartisan" CPB has, itself, documented the fact that California Republicans have proposed spending cuts, here and here. But, what's "realistic" -- and to whom? To Krugman? To California Democrats like Governor Gray Davis?

Krugman, of course, blames none of California's problems on Davis, and treats the move to recall Davis as a sham:

"...voters are being invited to focus not on hard choices but on personality. Replacing Gray Davis with someone more likable isn't going to pay the bills."

As a Californian, I can assure you that Davis' personality is the least of my worries. As fellow Californian Matthew Hoy points out, Davis has his own idea of "realistic" -- and it's about pandering to special interests in a way that has a lot of California voters quite upset.

"What is interesting about state spending are charts comparing the 2002-03 fiscal year (Page 3) spending to the 2003-04 fiscal year (Page 48)... There is only one category of funding that actually increases in the midst of this budget crisis: 'Youth & Adult Correctional.' That's right, the outrageous contract with the prison guards union that Davis approved after they made a large contribution to his re-election campaign."


Posted by Donald L. Luskin at 7:05 AM | link  

Sunday, August 03, 2003

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What does Paul Krugman love so much about this Alan Abelson column in Barron's, so much that he would jot a little tribute to it on his personal website today? 

Is it that Abelson is especially witty to imitate Maureen Dowd by referring to Defense Secretary Rumsfeld as "Rummy?" Is it that he refers to Admiral John Poindexter as "Adm. Pointyhead"? Or is it that he refers to Admiral Poindexter's Defense Advanced Research Projects Administration (DARPA) as "Determinedly Asinine Research Projects Administration"?

You know... really determinedly asinine projects like the Internet -- which was conceived and funded by DARPA.

One thing we know it's not. It can't be Kruggy's delight about the fact that Admiral Poindexter stepped down last week amidst the furor over the DARPA proposal to subsidize a Policy Analysis Market to trade futures contracts on political events in the Mideast. No...can't be that. Kruggy himself is all in favor of Robert Shiller's idea to have novel marketplaces that would price various risks -- and he's all in favor of having them be subsidized by government. It was Kruggy himself who said in April, 2000 -- out of concern for what he saw as highly volatile and speculative stock market -- that

"'s now past time to take a serious look at other proposals, like that of subsidizing the creation of futures markets in dividends (which could help ground stock prices in reality)."

Here's the answer. It's just that Kruggy -- will I earn a little tribute from him on his website by calling him that? -- likes seeing another financial columnist stepping outside his small area of expertise and fulminating against the Bush administration. But Kruggy doesn't want to be too identified with a mere financial columnist for a mere financial magazine -- so he begins his little tribute by saying "I hate to admit it, but I subscribe to Barron's" and adding "I suspect that people who check out this site don't get Barron's."

(Are the smerfs who take their talking points from Krugman offended by this unbearably supercilious attitude? No, they imitate it.)

Hmmm... maybe this is it. Maybe Kruggy's sucking up a little bit here, preparing his landing pad for the post-Rainesey world at the Times... Aby is getting on in years, after all...

Posted by Donald L. Luskin at 9:34 PM | link  

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Here's yet another exchange concerning the fact that almost no one on the New York Times Editorial Board has any academic or work qualifications to write about their respective subjects. Returning to the discussion is John Seater of North Carolina State University, this time joined by Linda Seebach, editorial writer and columnist for the Rocky Mountain News. If you want to catch up on what's been said so far, see "The Newspaper of Not Knowing What the Hell You're Talking About" (July 24, 2003); "Who Needs Experts?" (July 25, 2003); "The Times Unqualified Editorial Board: Round Three" (July 29, 2003); and "Times' Board of Fools: Round Four" (August 1, 2003).

SEEBACH: John Seater has a peculiar notion of what editorial writers do, or he would not have written, "[The AMA's] president would have the experience and training to write an informed (though not necessarily unbiased) editorial about regulation of the medical industry." Editorials are not supposed to be "unbiased," and anyone who thinks otherwise is probably someone who should not be making oracular pronouncements about the way journalists go about their jobs.

One problem with his sweeping assertion that all writers of editorials should have either training or work experience in the areas they write about is that editorial page staffs are far too small for that. The Rocky Mountain News is a big paper, and we have only four people who write editorials. Most papers have fewer. We are perforce generalists, though we come to the job with certain areas of expertise and develop others over time.

Our particular occupational expertise is not deep knowledge of a few arcane topics, but the ability to dig into a previously unfamiliar topic and learn enough to make sense of it to readers for whom it is also unfamiliar. My experience in talking to readers is that the ones who agree with what I say believe my understanding of the topic is, like theirs, superior, and the ones who don't agree think I am an ignorant hack.

Seater, for example, writes, "I know for certain that whoever on the [Wall Street] Journal board writes those editorials complaining about the Phillips curve, the natural rate of unemployment, and NAIRU doesn't understand any of those things." This blog daily proves that economists with excellent credentials can hold diametrically opposed views on economic matters, and surely there are some economists who think the Journal's editorials about these subjects are spot-on. As I used to tell my son when he was little, "I understand you perfectly well. I just don't agree with you."

SEATER: (1) I think Ms. Seebach confuses having an opinion with being biased. Having an opinion means that you have considered the facts and have come to a conclusion on what they mean. Being biased means you are incapable or unwilling to consider the facts in a fully honest way. Most of the time, the purpose of an editorial is to express an opinion. The purpose should not be to put one over on the reader by pretending to present a dispassionate analysis when in fact the writer has a hidden agenda. That is what bias tends to lead to. Bias may be unavoidable; after all, we all have personal interests at stake much of the time. However, biases in editorial writers should be up front and in the open. In reading an editorial, I want to know the writer's biases so that I can apply the proper amount of skepticism to the analysis and opinions he offers. Eric Savitz suggests having editorials signed so that the reader will know who the writer is. Seems a good idea to me. As for the president of the AMA, I only hinted as an aside that he may not be unbiased, precisely to distinguish between his possible biases and his having sufficient knowledge to write an informed editorial about the medical industry.

(2) I made no oracular pronouncements on how journalists should go about their jobs. I merely made two observations. First, the editorial board of the New York Times comprises people who have no training of any kind in the fields they write about. That seems an indisputable fact evidenced by the Times' own description of its editorial board's backgrounds. Second, as an economist, I know that much of what I have read about economics in both editorials and news articles is mistaken at even the simplest level of describing data correctly, and much more so at the deeper levels of trying to interpret economic events and recommend social policy. The people writing this stuff often do a bad job. They don't get even the most basic fundamentals right. Their writing would earn a D or an F in an undergraduate class on the principles of economics. I have a large folder of newspaper clippings containing major gaffes about economics. I use that folder to give my students examples of why they cannot trust what they read about economics in either news articles or editorials. It's a sad state of affairs, but it is a fact, not an opinion, that much journalistic treatment of economics is badly done. Literally all the economists I ever have discussed this with -- which is quite a few -- feel exactly the same way that I do.

(3) Small editorial staffs with little expertise in a subject should take note of their limitations and write accordingly. Less pontificating and more humility would make their writings much more useful. As citizens, we all have to make decisions about things we don't understand very well. I know virtually nothing about chemistry or biology or ecology, but I have to make a decision when I vote for political candidates whether their views on environmental policy seem sensible. Most people know little about economics, but they have to make the same kind of decisions regarding economic policy. Editorial writers can help sort out such issues. They can offer their thoughts, questions, and insights. However, editorial writers who are ignorant of a subject should admit that fact openly and offer their views as tentative propositions or merely questions from a perplexed person rather than informed analysis. I don't often see such honesty or humility in editorial writing. Maybe humble writing would not be so likely to persuade a reader, but then I am not much enamored of persuasion based on deception. Writing authoritatively while hiding one's ignorance is a form of deception. I take a dim view of it. In any case, my original comments were instigated by the manifest unqualification of the editorial board of the New York Times. That board is large, and the Times is one of the very top papers in the country. They surely can afford to spend some time and money hiring some editorialists with specific training in the fields they will write about.

(4) What is a generalist? In my experience, it is a self-proclaimed wise person who usually knows little about anything in particular. Knowledge has gotten so complex that almost no one can know enough to be a useful "generalist." The best we can hope for, in my opinion, is to understand two or three areas pretty well and then discuss issues with others who know things we don't in an attempt to reach some sort of reasonable decision. I went to a liberal arts university that loved to babble on and on about how the movers and shakers of history were generalists. No evidence to support that view was ever offered. Notable generalists are quite rare: Aristotle, DaVinci, and Jefferson are examples. Most movers and shakers I can think of were not generalists but specialists: Michelangelo, Beethoven, Watt, Gauss, Carnegie, Einstein, Salk, Gates, etc. The major exception, perhaps, is politics, where many generalists have had a field day, with bad and often disastrous consequences (e.g., Marx). Maybe politics is the exception that proves the rule. I understand the position that news people are in. They have to cover the entire range of human activity as it unfolds from one day to the next, something that no one person or even a group of twenty people possibly can understand. News people, at least the honest ones, do the best they can. I don't hold against them in any way the unavoidable fact that they must write about things they do not understand or do not have expertise in. We are all in the same boat. Let's just admit it and restrain ourselves accordingly.

(5) What the Phillips curve, the natural unemployment rate, and NAIRU (non-accelerating-inflation rate of unemployment, actually the same thing as the natural rate) are is not a matter of opinion, only definition. The Wall Street Journal editorial writer who railed about them wrote in a way that showed he did not understand what they are. If he had gotten the definitions right, then he and I might have had honest disagreements about certain policy implications that they have. However, he did not get the definitions right; his writing showed clearly that he did not understand the meaning of the concepts he was discussing. Definitions of economic concepts are not a matter of opinion, as Ms. Seebach would have us believe; they are a matter of fact.

Posted by Donald L. Luskin at 7:40 PM | link