The NYT, which has repeatedly printed news stories implying that public pensions are hugely underfunded, wrongly implied that economists all agree that public pensions have overly optimistic return assumptions for their pension funds. This is not true. In fact, most pensions are now making assumptions that are completely consistent with the expected return on their assets based on widely accepted projections for the growth of the economy and the growth of profits.
In fact, it is almost impossible to produce a plausible set of returns (capital gains and dividend payouts) that is consistent with a substantially lower rate of return than what the pension funds are assuming. If the economists who claim that the pension funds are assuming too high a rate of return believed what they say, then they should be able to write out return projections that would support this contention in just a few minutes. Given the trillions of dollars at stake in this debate, laying out a set of return projections would seem to be a reasonable price for being taken seriously.
This argument is explained more fully in a 2005 Brookings Paper that I co-authored with Paul Krugman and Brad DeLong.
The NYT, which has repeatedly printed news stories implying that public pensions are hugely underfunded, wrongly implied that economists all agree that public pensions have overly optimistic return assumptions for their pension funds. This is not true. In fact, most pensions are now making assumptions that are completely consistent with the expected return on their assets based on widely accepted projections for the growth of the economy and the growth of profits.
In fact, it is almost impossible to produce a plausible set of returns (capital gains and dividend payouts) that is consistent with a substantially lower rate of return than what the pension funds are assuming. If the economists who claim that the pension funds are assuming too high a rate of return believed what they say, then they should be able to write out return projections that would support this contention in just a few minutes. Given the trillions of dollars at stake in this debate, laying out a set of return projections would seem to be a reasonable price for being taken seriously.
This argument is explained more fully in a 2005 Brookings Paper that I co-authored with Paul Krugman and Brad DeLong.
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This one should be simple enough even for a Washington Post columnist, but apparently not. Krauthammer is apparently referring to the report of the deficit commission’s co-chairs, Erskine Bowles and Alan Simpson. The report did not get the necessary majority to be approved by the commission and there was not even a vote taken by the deadline.
Of course Krauthammer also apparently missed the collapse of the housing bubble and resulting economic collapse, since he blames President Obama for the deficit. He obviously is not a very observant person. He also thinks that a comment by Congressional Budget Office (CBO) director Doug Elmensdorf that CBO does not score speeches is “devastating.” The point that Mr. Elemensdorf was making apparently went over Krauthammer’s head.
It takes time and effort for CBO to score something. When a fully worked out proposal is in place and laid out they can score it. They cannot score every new twist and turn in policy debates. It is not clear why this obvious truth would be seen as “devastating.”
This one should be simple enough even for a Washington Post columnist, but apparently not. Krauthammer is apparently referring to the report of the deficit commission’s co-chairs, Erskine Bowles and Alan Simpson. The report did not get the necessary majority to be approved by the commission and there was not even a vote taken by the deadline.
Of course Krauthammer also apparently missed the collapse of the housing bubble and resulting economic collapse, since he blames President Obama for the deficit. He obviously is not a very observant person. He also thinks that a comment by Congressional Budget Office (CBO) director Doug Elmensdorf that CBO does not score speeches is “devastating.” The point that Mr. Elemensdorf was making apparently went over Krauthammer’s head.
It takes time and effort for CBO to score something. When a fully worked out proposal is in place and laid out they can score it. They cannot score every new twist and turn in policy debates. It is not clear why this obvious truth would be seen as “devastating.”
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Morning Edition had another piece on the standoff over Minnesota’s budget. Again it gave listeners no background that would allow them to determine the validity of Republican claims that state spending is soaring out of control. As noted before, the state is spending less relative to the size of the economy than it did in the early 90s. This means that the Republicans either are unfamiliar with the state budget or they are not being honest.
Morning Edition had another piece on the standoff over Minnesota’s budget. Again it gave listeners no background that would allow them to determine the validity of Republican claims that state spending is soaring out of control. As noted before, the state is spending less relative to the size of the economy than it did in the early 90s. This means that the Republicans either are unfamiliar with the state budget or they are not being honest.
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There are a large number of organizations that produce interesting research on the labor market on a regular basis (including CEPR). Today the Post ran a front page piece on a study from the Pew Research Center that told readers: “Men Getting Jobs Faster than Women.”
Those who read the article would discover that neither men nor women are getting jobs at a very rapid pace. In fact, the employment to population ratio (the percent of people over age 20 who are employed) has fallen for both men and women since the recession ended in June of 2009. It has just fallen more rapidly for women than men, a 1.1 percentage-point decline for women compared to a 0.5 percentage-point decline for men.
Given the slow rate of job growth to date, it is not clear that the pattern of employment growth at present tells us much about what the mix of jobs will look like when (and if) employment grows fast enough to raise the employment rate. This was a peculiar piece of labor market research to highlight, since the Post so rarely discusses the labor market. More obvious research to highlight would include the large and growing research showing that structural unemployment explains at most a small share of the increase in unemployment since the beginning of the recession. This means that the vast majority of unemployment is due to bad economic policy, not a mismatch of workers’ skills/location and available jobs.
It would also be interesting to see a discussion of racial patterns in employment. While the employment rate for white men and women have edged up over the last year, employment rates for black men and women are at recession lows.
The Post could also do a piece that covers research the OECD and elsewhere that discusses the effectiveness of work sharing programs in reducing unemployment. Post readers would probably be interested in knowing that Germany’s unemployment rate has actually fallen by 0.5 percentage points since the beginning of the recession even though its economy has grown no more than the U.S. economy.
This is due to the fact that it has given firms incentive to reduce work hours rather than lay people off. This policy costs no more than paying unemployment benefits and keeps workers at their job.
There are a large number of organizations that produce interesting research on the labor market on a regular basis (including CEPR). Today the Post ran a front page piece on a study from the Pew Research Center that told readers: “Men Getting Jobs Faster than Women.”
Those who read the article would discover that neither men nor women are getting jobs at a very rapid pace. In fact, the employment to population ratio (the percent of people over age 20 who are employed) has fallen for both men and women since the recession ended in June of 2009. It has just fallen more rapidly for women than men, a 1.1 percentage-point decline for women compared to a 0.5 percentage-point decline for men.
Given the slow rate of job growth to date, it is not clear that the pattern of employment growth at present tells us much about what the mix of jobs will look like when (and if) employment grows fast enough to raise the employment rate. This was a peculiar piece of labor market research to highlight, since the Post so rarely discusses the labor market. More obvious research to highlight would include the large and growing research showing that structural unemployment explains at most a small share of the increase in unemployment since the beginning of the recession. This means that the vast majority of unemployment is due to bad economic policy, not a mismatch of workers’ skills/location and available jobs.
It would also be interesting to see a discussion of racial patterns in employment. While the employment rate for white men and women have edged up over the last year, employment rates for black men and women are at recession lows.
The Post could also do a piece that covers research the OECD and elsewhere that discusses the effectiveness of work sharing programs in reducing unemployment. Post readers would probably be interested in knowing that Germany’s unemployment rate has actually fallen by 0.5 percentage points since the beginning of the recession even though its economy has grown no more than the U.S. economy.
This is due to the fact that it has given firms incentive to reduce work hours rather than lay people off. This policy costs no more than paying unemployment benefits and keeps workers at their job.
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This is the point that the Post should have been highlighting in an article about President Obama’s comments on the housing market in his twitter townhall yesterday. Nationwide house prices had just tracked the overall rate of inflation from 1896 to 1996. In the decade from 1996 to 2006, house prices outpaced the overall rate of inflation by more than 70 percent.
At the point where President Obama took office, house prices had fallen by about 20 percent from their bubble peaks. Since there is no identifiable change in the fundamentals of the housing market, it is reasonable to expect prices to fall back to their trend levels. However, the article quoted Obama as saying:
“The continuing decline in the housing market is something that hasn’t bottomed out as quickly as we expected.”
This statement reflects a frightening degree of ignorance about the housing market. It should have been the main focus of the article as the Post attempted to determine whether President Obama and his advisers could really not understand the housing bubble, the collapse of which has given the economy the worst downturn since the Great Depression.
This is the point that the Post should have been highlighting in an article about President Obama’s comments on the housing market in his twitter townhall yesterday. Nationwide house prices had just tracked the overall rate of inflation from 1896 to 1996. In the decade from 1996 to 2006, house prices outpaced the overall rate of inflation by more than 70 percent.
At the point where President Obama took office, house prices had fallen by about 20 percent from their bubble peaks. Since there is no identifiable change in the fundamentals of the housing market, it is reasonable to expect prices to fall back to their trend levels. However, the article quoted Obama as saying:
“The continuing decline in the housing market is something that hasn’t bottomed out as quickly as we expected.”
This statement reflects a frightening degree of ignorance about the housing market. It should have been the main focus of the article as the Post attempted to determine whether President Obama and his advisers could really not understand the housing bubble, the collapse of which has given the economy the worst downturn since the Great Depression.
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NPR decided to do a cutesy piece in which it implied that the debate over the debt ceiling amounted to the semantics of what constitutes a tax increase. It told listeners that there appears to be some movement by Republicans who are now willing to consider the elimination of some tax breaks, although these would have to be offset by reductions in tax rates. In other words, there would be no increase in revenue.
This is ZERO movement. Most Republicans have been on record as being willing to go along with the elimination of some tax breaks in exchange for a reduction in rates. In fact, this is the explicit goal of the Ryan plan which lowers tax rate but promises to offset with the elimination of trillions of dollars of unspecified tax breaks. This bill was approved by the Republicans in the House with just 4 Republicans voting no. It also garnered near unanimous support from Republicans in the Senate.
In short, the notion that there has been some change in the Republican position so that they are now willing to consider tax increases is a complete invention of NPR. It badly misled its listeners with this piece.
NPR decided to do a cutesy piece in which it implied that the debate over the debt ceiling amounted to the semantics of what constitutes a tax increase. It told listeners that there appears to be some movement by Republicans who are now willing to consider the elimination of some tax breaks, although these would have to be offset by reductions in tax rates. In other words, there would be no increase in revenue.
This is ZERO movement. Most Republicans have been on record as being willing to go along with the elimination of some tax breaks in exchange for a reduction in rates. In fact, this is the explicit goal of the Ryan plan which lowers tax rate but promises to offset with the elimination of trillions of dollars of unspecified tax breaks. This bill was approved by the Republicans in the House with just 4 Republicans voting no. It also garnered near unanimous support from Republicans in the Senate.
In short, the notion that there has been some change in the Republican position so that they are now willing to consider tax increases is a complete invention of NPR. It badly misled its listeners with this piece.
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In an article on the decline in illegal immigration from Mexico, the NYT cited a “prominent economist” as saying that Mexico’s per capita GDP had increased by more than 45 percent since 2000. This view of Mexico experiencing an economic boom is radically at odds with the official data. The IMF data show that Mexico’s per capita GDP has increased by just 10 percent since 2000, including a 4 percent increase projected for 2011. This is considerable less than per capital GDP growth in the U.S. over this period.
In an article on the decline in illegal immigration from Mexico, the NYT cited a “prominent economist” as saying that Mexico’s per capita GDP had increased by more than 45 percent since 2000. This view of Mexico experiencing an economic boom is radically at odds with the official data. The IMF data show that Mexico’s per capita GDP has increased by just 10 percent since 2000, including a 4 percent increase projected for 2011. This is considerable less than per capital GDP growth in the U.S. over this period.
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The Post reported on President Obama’s assertion that it is necessary to make large cuts in projected deficits, telling readers:
“Obama weighed in Tuesday, noting that a remarkable bipartisan consensus has emerged about the scope and severity of the nation’s debt problem. ‘Most of us already agree that to truly solve our deficit problem, we need to find trillions in savings over the next decade, and significantly more in the decades that follow,’”
It would have been more appropriate to use the term “asserting” rather than “noting.”
Noting implies that the claim that President Obama is making about a consensus is true. It is not.
People familiar with economics know that the main reason that the country is facing large budget deficits is because of the economic crisis created by the collapse of the housing bubble. Contrary to President Obama’s assertion, the main way to solve the deficit problem is to get the economy back to full employment.
This is yet another case where the Post has ignored journalistic standards in a front page story to foist its editorial position on readers.
The Post reported on President Obama’s assertion that it is necessary to make large cuts in projected deficits, telling readers:
“Obama weighed in Tuesday, noting that a remarkable bipartisan consensus has emerged about the scope and severity of the nation’s debt problem. ‘Most of us already agree that to truly solve our deficit problem, we need to find trillions in savings over the next decade, and significantly more in the decades that follow,’”
It would have been more appropriate to use the term “asserting” rather than “noting.”
Noting implies that the claim that President Obama is making about a consensus is true. It is not.
People familiar with economics know that the main reason that the country is facing large budget deficits is because of the economic crisis created by the collapse of the housing bubble. Contrary to President Obama’s assertion, the main way to solve the deficit problem is to get the economy back to full employment.
This is yet another case where the Post has ignored journalistic standards in a front page story to foist its editorial position on readers.
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An article on the congressional debate over a new transportation bill began:
“The next flash point in the debate over the nation’s will to live within its means may emerge this week as House Republicans present a long-term transportation bill expected to cut funding for highways and mass transit by almost one third.”
Characterizing the battle over the transportation bill as a “flash point in the debate over the nation’s will to live within its means” is crude editorializing that would not appear in a news section of a serious newspaper. It’s because of articles like this that the Post is known as “Fox on 15th Street.”
An article on the congressional debate over a new transportation bill began:
“The next flash point in the debate over the nation’s will to live within its means may emerge this week as House Republicans present a long-term transportation bill expected to cut funding for highways and mass transit by almost one third.”
Characterizing the battle over the transportation bill as a “flash point in the debate over the nation’s will to live within its means” is crude editorializing that would not appear in a news section of a serious newspaper. It’s because of articles like this that the Post is known as “Fox on 15th Street.”
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That’s the problem when you have young reporters. They can’t remember back to the 1990s.
If NPR did have reporters who remembered back to the 1990s they would not be telling listeners that Ohio Governor John Kasich was “chairman of the House Budget Committee when he balanced the budget with President Clinton in the 1990s.”
Actually, neither John Kasich nor President Clinton balanced the budget in the 1990s. The 1996 Congressional Budget Office (CBO) projections for the fiscal year 2000 budget showed a deficit in that year of $244 billion. Instead, the government ran a surplus of $232 billion. According to CBO the legislated changes put in place by Mr. Kasich and Mr. Clinton over this four year period added $10 billion to the deficit.
This background information might have given listeners a somewhat different perspective on Mr. Kasich’s quote:
“At the end of the day, you look yourself in the mirror, and you say to yourself, ‘Did I do what was right for families and for children, and if I paid a political price, so what?”
Source: Congressional Budget Office and author’s calculations.
That’s the problem when you have young reporters. They can’t remember back to the 1990s.
If NPR did have reporters who remembered back to the 1990s they would not be telling listeners that Ohio Governor John Kasich was “chairman of the House Budget Committee when he balanced the budget with President Clinton in the 1990s.”
Actually, neither John Kasich nor President Clinton balanced the budget in the 1990s. The 1996 Congressional Budget Office (CBO) projections for the fiscal year 2000 budget showed a deficit in that year of $244 billion. Instead, the government ran a surplus of $232 billion. According to CBO the legislated changes put in place by Mr. Kasich and Mr. Clinton over this four year period added $10 billion to the deficit.
This background information might have given listeners a somewhat different perspective on Mr. Kasich’s quote:
“At the end of the day, you look yourself in the mirror, and you say to yourself, ‘Did I do what was right for families and for children, and if I paid a political price, so what?”
Source: Congressional Budget Office and author’s calculations.
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