That’s what New York Times readers are likely to believe after seeing this op-ed by Gracy Olmstead. The piece is an argument against farm subsidies, or at least their current form, which primarily benefit wealthy farmers.
It referred to these subsidies in 2018, as being “nearly $900 billion worth.” The link provided in the piece is to an article on the new farm bill. It covers ten years. More importantly, the vast majority of the money in the bill is not for farm subsidies but for the Supplemental Nutrition Assistance Program or food stamps. The amount going to farm subsidies is around $20 billion a year. Instead of being 20 percent of the budget, as this piece implies, farm subsidies are actually less than 0.5 percent of the federal budget.
There is zero excuse for allowing such a grossly mistaken number into the paper. The piece is an op-ed, not a news story, but the paper does fact check op-eds. (I can vouch for that. I have had several columns very carefully fact-checked.)
A newspaper’s job is to inform its readers. In this case, the NYT flunked badly.
That’s what New York Times readers are likely to believe after seeing this op-ed by Gracy Olmstead. The piece is an argument against farm subsidies, or at least their current form, which primarily benefit wealthy farmers.
It referred to these subsidies in 2018, as being “nearly $900 billion worth.” The link provided in the piece is to an article on the new farm bill. It covers ten years. More importantly, the vast majority of the money in the bill is not for farm subsidies but for the Supplemental Nutrition Assistance Program or food stamps. The amount going to farm subsidies is around $20 billion a year. Instead of being 20 percent of the budget, as this piece implies, farm subsidies are actually less than 0.5 percent of the federal budget.
There is zero excuse for allowing such a grossly mistaken number into the paper. The piece is an op-ed, not a news story, but the paper does fact check op-eds. (I can vouch for that. I have had several columns very carefully fact-checked.)
A newspaper’s job is to inform its readers. In this case, the NYT flunked badly.
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Two commenters on my previous post on a New York Times op-ed, which asserted that one-fifth of the federal budget went to farm subsidies pointed out the error can be partly attributed to a linked article in the Washington Post. (The actual figure is less than 0.5 percent.)
That piece includes the sentence:
“At close to $1 trillion a year, the farm bill’s price tag is high.”
Incredibly, the next sentence directly contradicts this assertion correctly pointing out that:
“But the bill’s drafters used the baseline set by the Congressional Budget Office under existing spending levels of $867 billion over the next 10 years, meaning it will not increase the federal deficit from prior projections.”
Fans of arithmetic would catch that $867 billion over ten years is less than one-tenth of the $1 trillion a year claimed in the prior sentence. Unfortunately, the Post’s copy editors apparently didn’t catch this one. It is again important to note that the vast majority of this money is for nutrition programs, not farm subsidies.
Anyhow, it would be nice if the Post and Times both took their responsibility to inform the public seriously. Dishwashers and truck drivers get fired when they don’t do their jobs. Unfortunately, we don’t have the same standards of accountability for the people who write for newspapers.
Two commenters on my previous post on a New York Times op-ed, which asserted that one-fifth of the federal budget went to farm subsidies pointed out the error can be partly attributed to a linked article in the Washington Post. (The actual figure is less than 0.5 percent.)
That piece includes the sentence:
“At close to $1 trillion a year, the farm bill’s price tag is high.”
Incredibly, the next sentence directly contradicts this assertion correctly pointing out that:
“But the bill’s drafters used the baseline set by the Congressional Budget Office under existing spending levels of $867 billion over the next 10 years, meaning it will not increase the federal deficit from prior projections.”
Fans of arithmetic would catch that $867 billion over ten years is less than one-tenth of the $1 trillion a year claimed in the prior sentence. Unfortunately, the Post’s copy editors apparently didn’t catch this one. It is again important to note that the vast majority of this money is for nutrition programs, not farm subsidies.
Anyhow, it would be nice if the Post and Times both took their responsibility to inform the public seriously. Dishwashers and truck drivers get fired when they don’t do their jobs. Unfortunately, we don’t have the same standards of accountability for the people who write for newspapers.
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The NYT ran a piece on China’s economy implying that it is reeling from the tariffs that Donald Trump has imposed on imports from China. The article outlined China’s economic problems and then told readers that China’s President Xi:
“…has been forced to make concessions to the United States as President Trump’s trade war intensifies.”
The problem with the claim that Xi has been “forced” is that China’s trade surplus with the United States is actually considerably larger in 2018 than it was in 2017. For the first ten months of this year, its surplus in goods has been $344.5 billion. That compares to surplus last year of $309.2 billion. While it is possible that China’s surplus would be even larger without the trade war, it doesn’t make much sense to say that a trade surplus that is up by 11 percent over the last year is a major cause of China’s current economic problems.
Addendum:
In comments, Ibout rightly takes me to task for not putting the trade surplus figure in context. China’s 2018 GDP measured in dollars (the appropriate denominator for this issue) is a bit more than $14 trillion. This means the surplus this year, which is likely to be a bit over $400 billion, would be a bit less than 2.8 percent of China’s GDP. If this were to fall sharply it would surely be a hit to China’s economy, but the surplus fell by much more following the 2008 recession and China’s economy continued to grow rapidly.
The NYT ran a piece on China’s economy implying that it is reeling from the tariffs that Donald Trump has imposed on imports from China. The article outlined China’s economic problems and then told readers that China’s President Xi:
“…has been forced to make concessions to the United States as President Trump’s trade war intensifies.”
The problem with the claim that Xi has been “forced” is that China’s trade surplus with the United States is actually considerably larger in 2018 than it was in 2017. For the first ten months of this year, its surplus in goods has been $344.5 billion. That compares to surplus last year of $309.2 billion. While it is possible that China’s surplus would be even larger without the trade war, it doesn’t make much sense to say that a trade surplus that is up by 11 percent over the last year is a major cause of China’s current economic problems.
Addendum:
In comments, Ibout rightly takes me to task for not putting the trade surplus figure in context. China’s 2018 GDP measured in dollars (the appropriate denominator for this issue) is a bit more than $14 trillion. This means the surplus this year, which is likely to be a bit over $400 billion, would be a bit less than 2.8 percent of China’s GDP. If this were to fall sharply it would surely be a hit to China’s economy, but the surplus fell by much more following the 2008 recession and China’s economy continued to grow rapidly.
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This is Dawn Niederhauser, CEPR’s Development Director, taking over Beat the Press to say thanks to all of you who have signed up to support Dean and BTP on Patreon. We really appreciate it! If you haven’t signed up to become a patron yet, please click here to join. Dean often posts extra content on Patreon, but primarily it’s a way for CEPR to fund Dean’s work (he tends to speak his mind in case you haven’t noticed. Which is great for you, but it can make my job very difficult).
We purposely set the minimum pledge at the lowest amount allowed, just $1 per month. That’s in keeping with Dean’s other position that makes my job very difficult — just about all of his work is available for FREE. Hopefully, $12 per year is affordable to all, but for those of you who can, adding just a few more dollars per month to your pledge would be a big help to us, and would enable Dean to continue to Beat the Press for years to come.
And now back to your regularly scheduled program. As Dean would say, don’t believe everything you read in the papers. Happy holidays from all of us at CEPR!
This is Dawn Niederhauser, CEPR’s Development Director, taking over Beat the Press to say thanks to all of you who have signed up to support Dean and BTP on Patreon. We really appreciate it! If you haven’t signed up to become a patron yet, please click here to join. Dean often posts extra content on Patreon, but primarily it’s a way for CEPR to fund Dean’s work (he tends to speak his mind in case you haven’t noticed. Which is great for you, but it can make my job very difficult).
We purposely set the minimum pledge at the lowest amount allowed, just $1 per month. That’s in keeping with Dean’s other position that makes my job very difficult — just about all of his work is available for FREE. Hopefully, $12 per year is affordable to all, but for those of you who can, adding just a few more dollars per month to your pledge would be a big help to us, and would enable Dean to continue to Beat the Press for years to come.
And now back to your regularly scheduled program. As Dean would say, don’t believe everything you read in the papers. Happy holidays from all of us at CEPR!
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The New York Times reported on an analysis of returns on the endowments of the Ivy League schools over the last decade. It found that all the schools’ endowments lagged a portfolio that was 60 percent stock index funds and 40 percent bond funds. (The gap with index funds would be even larger if the mix were 70 percent stock, 30 percent bonds.)
The Ivies invest heavily in hedge funds, which typically charge fees equal to 2 percent of the money invested plus 20 percent of returns over a benchmark. It seems that this pattern of investment is not doing very well for the schools, although some of the richest people in the country run hedge funds.
On the plus side for these schools, by promoting upward redistribution, they are creating more opportunities for their economics, sociology, and other programs, that try to design policies to reduce inequality and increase mobility.
The New York Times reported on an analysis of returns on the endowments of the Ivy League schools over the last decade. It found that all the schools’ endowments lagged a portfolio that was 60 percent stock index funds and 40 percent bond funds. (The gap with index funds would be even larger if the mix were 70 percent stock, 30 percent bonds.)
The Ivies invest heavily in hedge funds, which typically charge fees equal to 2 percent of the money invested plus 20 percent of returns over a benchmark. It seems that this pattern of investment is not doing very well for the schools, although some of the richest people in the country run hedge funds.
On the plus side for these schools, by promoting upward redistribution, they are creating more opportunities for their economics, sociology, and other programs, that try to design policies to reduce inequality and increase mobility.
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Okay, that’s not exactly what it said. Instead, the headline of an article on the protests in France told readers “Unrest in France hinders Macron’s push to revive economy.”
The policies in question include ending a wealth tax on the rich, cutting retirees’ Social Security benefits, and a series of measures designed to reduce the power of unions. While it is possible that Macron has taken these steps because he really does believe that this is the best way to boost economic growth, it is also possible that he has taken these steps because he wants to give more money to rich people.
In this respect, it is worth noting that Macron is a former investment banker. Therefore he is likely to be very rich and to have rich friends.
Okay, that’s not exactly what it said. Instead, the headline of an article on the protests in France told readers “Unrest in France hinders Macron’s push to revive economy.”
The policies in question include ending a wealth tax on the rich, cutting retirees’ Social Security benefits, and a series of measures designed to reduce the power of unions. While it is possible that Macron has taken these steps because he really does believe that this is the best way to boost economic growth, it is also possible that he has taken these steps because he wants to give more money to rich people.
In this respect, it is worth noting that Macron is a former investment banker. Therefore he is likely to be very rich and to have rich friends.
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Right, I meant “patents,” but the logic is the same. When you have a government intervention that raises the price above the free market price then you provide a lot incentive for gaming and corruption. The NYT had a very good piece on this topic just last week. Of course the tariffs on clothes that were being evaded/avoided in that piece were just 10-25 percent. By contrast, patent monopolies raise the price of drugs by the equivalent of several thousand percent. Therefore the incentive for corruption is correspondingly larger.
The NYT gives us the latest example in an article on Actelion Pharmaceuticals agreeing to a $360 million settlement in a case being investigated by the Justice Department. The accusation is that the company, which makes a drug to treat a rare lung condition, was making payments to a patient assistance charity as a way of giving kickbacks on its drug.
This is a mechanism that drug companies can effectively use to entice patients to use their drugs. If they give the money to an intermediary like the charity allegedly used in this case, the charity can then use the money to give patients a discount on the company’s drug. This can increase their sales without a general price reduction.
There would be no incentive for this sort of corruption if drugs were sold in a free market. Unfortunately there are not powerful interest groups to oppose patent monopolies as there are with tariffs on clothes, so we don’t see this sort of analysis in major media outlets.
Right, I meant “patents,” but the logic is the same. When you have a government intervention that raises the price above the free market price then you provide a lot incentive for gaming and corruption. The NYT had a very good piece on this topic just last week. Of course the tariffs on clothes that were being evaded/avoided in that piece were just 10-25 percent. By contrast, patent monopolies raise the price of drugs by the equivalent of several thousand percent. Therefore the incentive for corruption is correspondingly larger.
The NYT gives us the latest example in an article on Actelion Pharmaceuticals agreeing to a $360 million settlement in a case being investigated by the Justice Department. The accusation is that the company, which makes a drug to treat a rare lung condition, was making payments to a patient assistance charity as a way of giving kickbacks on its drug.
This is a mechanism that drug companies can effectively use to entice patients to use their drugs. If they give the money to an intermediary like the charity allegedly used in this case, the charity can then use the money to give patients a discount on the company’s drug. This can increase their sales without a general price reduction.
There would be no incentive for this sort of corruption if drugs were sold in a free market. Unfortunately there are not powerful interest groups to oppose patent monopolies as there are with tariffs on clothes, so we don’t see this sort of analysis in major media outlets.
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