That is what readers of the article on David Cameron, the new Prime Minister would be led to believe. After all, the piece told readers that the previous Labor government’s policies had turned:
“…Britain into one of the most heavily taxed, tightly regulated countries in the developed world, with government accounting for about half the work force and half of the economy.”
The NYT’s assertion is at odds with the data. In 2008 (the last year for which full data are available), according to the OECD, the share of government expenditures in GDP in the UK was 47.5%. This is slightly above the 45.6 percent average for the European countries in the OECD, but below the 52.7 percent share in France, the 50.1percent share in Belgium and the 48.7 percent share in Italy. In other words, the government share of the economy in the UK is somewhat above the average for wealthy European countries, but certainly not at the top in this category.
The article also told readers that government employment accounts “…for about half the work force.” According to the Office of National Statistics in the U.K., public employment accounts for 21.1 percent of total employment.
The article includes numerous other comments that only serve to express disapproval of the UK welfare state rather than provide information. For example, it describes the new government’s effort to “dismantle Britain’s sprawling bureaucracy.” No less information would be provided without the word “sprawling.”
At one point it reports on plans to establish: “…independent but publicly financed schools in which head teachers and their staff would be freed from the stifling oversight of local councils and the central education authorities.” The same information could be provided without the word “stifling.”
Clearly the New York Times supports the agenda of the new government, but expressions of support for a government or political party belong the editorial page, not the front page.
That is what readers of the article on David Cameron, the new Prime Minister would be led to believe. After all, the piece told readers that the previous Labor government’s policies had turned:
“…Britain into one of the most heavily taxed, tightly regulated countries in the developed world, with government accounting for about half the work force and half of the economy.”
The NYT’s assertion is at odds with the data. In 2008 (the last year for which full data are available), according to the OECD, the share of government expenditures in GDP in the UK was 47.5%. This is slightly above the 45.6 percent average for the European countries in the OECD, but below the 52.7 percent share in France, the 50.1percent share in Belgium and the 48.7 percent share in Italy. In other words, the government share of the economy in the UK is somewhat above the average for wealthy European countries, but certainly not at the top in this category.
The article also told readers that government employment accounts “…for about half the work force.” According to the Office of National Statistics in the U.K., public employment accounts for 21.1 percent of total employment.
The article includes numerous other comments that only serve to express disapproval of the UK welfare state rather than provide information. For example, it describes the new government’s effort to “dismantle Britain’s sprawling bureaucracy.” No less information would be provided without the word “sprawling.”
At one point it reports on plans to establish: “…independent but publicly financed schools in which head teachers and their staff would be freed from the stifling oversight of local councils and the central education authorities.” The same information could be provided without the word “stifling.”
Clearly the New York Times supports the agenda of the new government, but expressions of support for a government or political party belong the editorial page, not the front page.
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The Washington Post felt that it was important to tell readers that the stimulus was very unpopular in a working class Pennsylvania district. However, it did not point out that a main reason that it is unpopular is that voter confuse the stimulus with the TARP bank bailout, which the paper strongly supported.
According to the article:
“Democratic pollster Mark Mellman said disgust with the stimulus and anxiety about the deficit are ‘really a metaphor for wasteful government spending.’ From the perspective of many voters, ‘a lot of their money has gone out the door to bail out big banks and big corporations while their jobs have been lost.'”
This is a pretty direct statement that the TARP remains incredibly unpopular and that voters tend to confuse the stimulus with the TARP. A serious newspaper would have made this point. It is not that the voters object to measures that create jobs, they object to measures that hand banks money.
The Washington Post felt that it was important to tell readers that the stimulus was very unpopular in a working class Pennsylvania district. However, it did not point out that a main reason that it is unpopular is that voter confuse the stimulus with the TARP bank bailout, which the paper strongly supported.
According to the article:
“Democratic pollster Mark Mellman said disgust with the stimulus and anxiety about the deficit are ‘really a metaphor for wasteful government spending.’ From the perspective of many voters, ‘a lot of their money has gone out the door to bail out big banks and big corporations while their jobs have been lost.'”
This is a pretty direct statement that the TARP remains incredibly unpopular and that voters tend to confuse the stimulus with the TARP. A serious newspaper would have made this point. It is not that the voters object to measures that create jobs, they object to measures that hand banks money.
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USA Today notes a decline in the percentage of people who expect to receive their Social Security benefits. The first sentence of the piece implies that the loss of confidence is due to that fact people have been: “battered by high unemployment and record home foreclosures.”
While the recession could explain the loss of confidence in Social Security, it is also possible that the huge public relations campaign by Peter Peterson and others has played a role. Peterson, a Wall Street investment banker, has pledged $1 billion to a foundation that has cutting Social Security and Medicare as its major goals. He has spoken widely around the country telling people that Social Security is going broke and that it has no trust fund. He has enlisted prominent political figures, including former President Bill Clinton in this effort.
There are other efforts to undermine public confidence in Social Security, most notably President Obama’s deficit commission. Former Wyoming Senator Alan Simpson, one of the co-chairs of this commission, has also frequently insisted that Social Security is going broke.
It is possible that these public relations efforts have had their intended effect of undermining confidence in the Social Security. The article should have at least noted this possibility.
USA Today notes a decline in the percentage of people who expect to receive their Social Security benefits. The first sentence of the piece implies that the loss of confidence is due to that fact people have been: “battered by high unemployment and record home foreclosures.”
While the recession could explain the loss of confidence in Social Security, it is also possible that the huge public relations campaign by Peter Peterson and others has played a role. Peterson, a Wall Street investment banker, has pledged $1 billion to a foundation that has cutting Social Security and Medicare as its major goals. He has spoken widely around the country telling people that Social Security is going broke and that it has no trust fund. He has enlisted prominent political figures, including former President Bill Clinton in this effort.
There are other efforts to undermine public confidence in Social Security, most notably President Obama’s deficit commission. Former Wyoming Senator Alan Simpson, one of the co-chairs of this commission, has also frequently insisted that Social Security is going broke.
It is possible that these public relations efforts have had their intended effect of undermining confidence in the Social Security. The article should have at least noted this possibility.
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Too bad that they couldn’t run it before the financial reform bill was approved.
Too bad that they couldn’t run it before the financial reform bill was approved.
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The housing wealth effect — the idea that people’s consumption is determined in part by their housing wealth — is one of the oldest concepts in economics. Apparently the NYT still has not heard about it.
An article about the consumption patterns of the wealthy made no mention at all of their housing wealth. The economy lost around $6 trillion in housing wealth with the collapse of the bubble, a disproportionate share of this wealth was held by the wealthy. It would be very surprising if their consumption did not decline in response to this loss of wealth. (The housing wealth effect is usually estimated at 5-7 cents of additional consumption each year for every additional dollar of housing wealth.)
The housing wealth effect — the idea that people’s consumption is determined in part by their housing wealth — is one of the oldest concepts in economics. Apparently the NYT still has not heard about it.
An article about the consumption patterns of the wealthy made no mention at all of their housing wealth. The economy lost around $6 trillion in housing wealth with the collapse of the bubble, a disproportionate share of this wealth was held by the wealthy. It would be very surprising if their consumption did not decline in response to this loss of wealth. (The housing wealth effect is usually estimated at 5-7 cents of additional consumption each year for every additional dollar of housing wealth.)
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The NYT reported that negotiations between Hungary and the IMF and EU on the release of additional funds reached a deadlock over the weekend. Buried deep in the article, the NYT reported that:
“The I.M.F and E.U had criticized Hungary’s decision to impose a special tax on financial institutions, saying it would send the wrong signal to investors and could hurt economic growth.”
This is striking since apparently the IMF and the EU are insisting that Hungary tax measures like cutting benefits for retirees rather than tax banks. This would have been worth publicizing.
The IMF has publicly claimed that it supported making the banks and either financial institutions pay more towards supporting government budgets. The effort to force Hungary to get rid of its bank tax, apparently accompanied by the threat of withholding funds, suggests that it is not following in practice the position that it has taken in public. This contradiction merits attention from the media.
The NYT reported that negotiations between Hungary and the IMF and EU on the release of additional funds reached a deadlock over the weekend. Buried deep in the article, the NYT reported that:
“The I.M.F and E.U had criticized Hungary’s decision to impose a special tax on financial institutions, saying it would send the wrong signal to investors and could hurt economic growth.”
This is striking since apparently the IMF and the EU are insisting that Hungary tax measures like cutting benefits for retirees rather than tax banks. This would have been worth publicizing.
The IMF has publicly claimed that it supported making the banks and either financial institutions pay more towards supporting government budgets. The effort to force Hungary to get rid of its bank tax, apparently accompanied by the threat of withholding funds, suggests that it is not following in practice the position that it has taken in public. This contradiction merits attention from the media.
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That must be what NYT readers must be asking after seeing unemployment benefits described as “deficit-bloating government spending” in an article about the problems facing those who have lost their benefits and the prospect that Congress will vote to extend benefits. While this view may express the reporter or editor’s opinion, it conveys no information whatsoever to readers.
The article also asserted that Congress is reluctant to extend benefits because: “fears about the country’s skyrocketing deficit, which are at the heart of Republican objections, have gained growing prevalence.”
The article does not say how it has determined that fears about deficits (“skyrocketing” is more editorializing) explain the Republicans’ motivations. Most of the Republicans expressing these concerns had little problem supporting the Bush tax cuts or spending on the wars in Iraq and Afghanistan, all of which added to the deficit. This may call into question their professed concerns about deficits now. They may just not want to give the Democrats a victory or they could hope that by making the economy worse the the electoral prospects of Republicans will be improved in November.
The reasons that politicians give for their actions are often not the true reason. Since reporters cannot typically know the true reason, they should just tell readers what the politicians say rather than trying to explain their motives.
That must be what NYT readers must be asking after seeing unemployment benefits described as “deficit-bloating government spending” in an article about the problems facing those who have lost their benefits and the prospect that Congress will vote to extend benefits. While this view may express the reporter or editor’s opinion, it conveys no information whatsoever to readers.
The article also asserted that Congress is reluctant to extend benefits because: “fears about the country’s skyrocketing deficit, which are at the heart of Republican objections, have gained growing prevalence.”
The article does not say how it has determined that fears about deficits (“skyrocketing” is more editorializing) explain the Republicans’ motivations. Most of the Republicans expressing these concerns had little problem supporting the Bush tax cuts or spending on the wars in Iraq and Afghanistan, all of which added to the deficit. This may call into question their professed concerns about deficits now. They may just not want to give the Democrats a victory or they could hope that by making the economy worse the the electoral prospects of Republicans will be improved in November.
The reasons that politicians give for their actions are often not the true reason. Since reporters cannot typically know the true reason, they should just tell readers what the politicians say rather than trying to explain their motives.
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A NYT editorial commented on evidence that the drug maker GlaxoSmithKline had concealed negative research findings on its diabetes drug Avandia:
“The clearest lesson to emerge from the hearings and other recent revelations is that GlaxoSmithKline, the maker of Avandia, can’t be trusted to report adverse clinical results fairly. The company must be watched like a hawk as additional trials that it sponsors go forward.”
Arghhhhhhhhhhhhhhhh! Doesn’t the NYT believe in the profit motive and incentives? The patent system, by granting monopolies that raise prices several thousand percent above the cost of production, gives drug companies an enormous incentive to conceal negative research findings. As long as these perverse incentives exist, then we have to watch every drug company like a hawk.
Maybe some wacko socialists think that drug companies will act for the public good and willingly forego vast profits, but those who believe on markets and economics know that drug companies will try to get away with anything they can get away with. One day maybe an iota of original thought will be allowed into public policy debates on the patent system, but we haven’t gotten there yet.
A NYT editorial commented on evidence that the drug maker GlaxoSmithKline had concealed negative research findings on its diabetes drug Avandia:
“The clearest lesson to emerge from the hearings and other recent revelations is that GlaxoSmithKline, the maker of Avandia, can’t be trusted to report adverse clinical results fairly. The company must be watched like a hawk as additional trials that it sponsors go forward.”
Arghhhhhhhhhhhhhhhh! Doesn’t the NYT believe in the profit motive and incentives? The patent system, by granting monopolies that raise prices several thousand percent above the cost of production, gives drug companies an enormous incentive to conceal negative research findings. As long as these perverse incentives exist, then we have to watch every drug company like a hawk.
Maybe some wacko socialists think that drug companies will act for the public good and willingly forego vast profits, but those who believe on markets and economics know that drug companies will try to get away with anything they can get away with. One day maybe an iota of original thought will be allowed into public policy debates on the patent system, but we haven’t gotten there yet.
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In its report on Goldman Sachs $500 million settlement of its case with the SEC, NPR described Goldman as a “survivor” of the financial crisis. While Goldman obviously did survive the crisis, it only did so with massive assistance from the government. This included loans through the TARP, loans and loan guarantees from the Federal Reserve Board and the FDIC, and the payment of $13 billion in obligations from AIG. However the most important form of assistance stemmed from the Fed’s decision to allow Goldman to become a bank holding company in the middle of the crisis, giving it the explicit protection of the Fed and the FDIC.
Describing Goldman as a “survivor” may imply that it managed to get through the crisis by its own ingenuity and mastery of finance. In fact, Goldman survived in the same way that an earthquake victim survives when the rescue squad digs them out from the rubble and rushes them to the emergency care ward. Its ingenuity in this context was only in its ability to get its political allies to come to its aid with enormous amounts of taxpayer dollars while demanding almost nothing in return.
Btw, it would be interesting to know how much Goldman made on the deal for which it is paying this fine. If the fine is not many times larger than the profit, it is not sending much of a message. The probability of getting caught in this sort of fraud is very low. It is a safe bet that the SEC never would have brought its case if the participants at Goldman had not been incredibly foolish in leaving a substantial paper (e-mail) trail. Had they been somewhat smarter, the SEC would have had nothing with which to make their case.
Given the low probability of detection, a fine has to be very large relative to the potential gains from fraud in order to provide an effective deterrence. This, and other pieces on the settlement, never even discuss this issue.
In its report on Goldman Sachs $500 million settlement of its case with the SEC, NPR described Goldman as a “survivor” of the financial crisis. While Goldman obviously did survive the crisis, it only did so with massive assistance from the government. This included loans through the TARP, loans and loan guarantees from the Federal Reserve Board and the FDIC, and the payment of $13 billion in obligations from AIG. However the most important form of assistance stemmed from the Fed’s decision to allow Goldman to become a bank holding company in the middle of the crisis, giving it the explicit protection of the Fed and the FDIC.
Describing Goldman as a “survivor” may imply that it managed to get through the crisis by its own ingenuity and mastery of finance. In fact, Goldman survived in the same way that an earthquake victim survives when the rescue squad digs them out from the rubble and rushes them to the emergency care ward. Its ingenuity in this context was only in its ability to get its political allies to come to its aid with enormous amounts of taxpayer dollars while demanding almost nothing in return.
Btw, it would be interesting to know how much Goldman made on the deal for which it is paying this fine. If the fine is not many times larger than the profit, it is not sending much of a message. The probability of getting caught in this sort of fraud is very low. It is a safe bet that the SEC never would have brought its case if the participants at Goldman had not been incredibly foolish in leaving a substantial paper (e-mail) trail. Had they been somewhat smarter, the SEC would have had nothing with which to make their case.
Given the low probability of detection, a fine has to be very large relative to the potential gains from fraud in order to provide an effective deterrence. This, and other pieces on the settlement, never even discuss this issue.
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A NYT blogpost noted the rise in labor force participation among older workers and the decline in participation among younger workers. It lists the fall in stock prices and therefore 401(k) values as one reason for the rise in older workers’ participation.
This is not likely to be an important factor, since few older workers had a substantial amount of stock even before the crisis. The loss of housing equity was likely a far more important factor in causing older workers to remain in the workforce. For the vast majority of older workers housing equity is their major source of wealth.
(The piece also lists the rise in the minimum wage as a reason that younger workers may be leaving the labor force. There is a vast amount of economic research that indicates that minimum wages have very little effect on the employment of younger workers.)
A NYT blogpost noted the rise in labor force participation among older workers and the decline in participation among younger workers. It lists the fall in stock prices and therefore 401(k) values as one reason for the rise in older workers’ participation.
This is not likely to be an important factor, since few older workers had a substantial amount of stock even before the crisis. The loss of housing equity was likely a far more important factor in causing older workers to remain in the workforce. For the vast majority of older workers housing equity is their major source of wealth.
(The piece also lists the rise in the minimum wage as a reason that younger workers may be leaving the labor force. There is a vast amount of economic research that indicates that minimum wages have very little effect on the employment of younger workers.)
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