The Media and Policy Makers deliberately misrepresent and ignore Economists

I use to watch PBS a lot. It’s been rather overrun by nutso libertarians and republicans the same way Europe was over run with Bubonic Plague-carrying fleas black_deathduring the middle ages.  Back in the middle ages, the “enlightened” religious and kingdom policy makers decided cats were the problem–since they obviously represent all things witchy–when they were really part of the solution.  Cats ate rats and mice and a lot of the worst of the flea-bearing vermin.  The guilty fleas escaped blame.  Nowdays, pundits, policy preachers, and the political class believe that economists are part of the problem and have created a serious amount of snake oil-based explanations that simply do not hold up to analysis or data.

So, PBS Newshour gets David Brooks–dilettante extraordinaire–and Ruth Marcus–professional effete intellectual snob for hire–to explain the recent employment numbers.  Yup,  why get economists to talk about the consensus in our community when you can have inside-the-beltway surrealism ?  Why is David Brooks given a platform to spew lies, nonsense, and propaganda?  Dr. Baker, I am excerpting you completely.  Forgive me the lapse in fair use.

The PBS Newshour won the gold medal for journalistic malpractice on Friday by having David Brooks and Ruth Marcus tell the countrywhat the Friday jobs report means. Brooks and Marcus got just about everything they said completely wrong.

Starting at the beginning, Brooks noted the slower than projected job growth and told listeners:

“Yes, I think there’s a consensus growing both on left and right that we — the structural problems are becoming super obvious.

“So when the — this recession started a number of years ago, you had 63, something like that, out of 100 Americans in the labor force. Now we’re down, fewer than in [the employment to population ratio is now 58.7 percent] — than when the recession started. And so that suggests we have got some deep structural problems. It probably has a lot to do with technological change. People are not hiring — companies are not hiring human beings. They’re hire machines.”

It’s hard to know what on earth Brooks thinks he is talking about. There is nothing close to a consensus on either the left or right that the economy’s problems are structural, as opposed to a simple lack of demand (i.e. people spending money). This is shown clearly by the overwhelming support on the Federal Reserve Board for its policy of quantitative easing. This policy is about trying to boost demand. A policy that the Republican Chairman, Ben Bernanke, has repeatedly advocated to Congress as well. This policy would not make sense if they viewed the weak demand for labor in the economy as being the result of structural problems. So clearly Brooks’ consensus excludes the Fed.

It also is worth noting the other part of Brooks’ story, that instead of hiring workers firms “hire machines,” is completely contradicted by the data. Investment has actually slowed in the last couples of years. (Non-residential investment is up by just 2.4 percent from its year ago level.) This means that firms are not hiring machines, or at least not as rapidly as they had in prior years. Also the rate of productivity growth has slowed sharply from the pre-recession period. In the last three years productivity growth has averaged less than 1.0 percent a year. This compares to more than 2.5 percent a year from 1995 until the recession in 2007. This means that machines are displacing workers much less rapidly than in a decade when we had much lower unemployment.

How does one get a job speculating on national TV on things one knows nothing about?  I think I would like a job like that.  It has to be easier than actually going to school and become a research specialist in a field. I think I’d be great at astrophysics commentary. Maybe I can replace Dr. Neil DeGrassi who gets all the kewl special effects-based astronomy gigs on PBS.  Hell, there’s a doctor in front of my name too.  Who cares if it’s not in anything germane or relevant to astrophysics?  Certainly not PBS.   But,here’s the shrill one with the facile, data-based debunk.

Indeed: one strong indicator that the problem isn’t structural is that as the economy has (partially) recovered, the recovery has tended to be fastest in precisely the same regions and occupations that were initially hit hardest. Goldman Sachs (no link) looks at unemployment in the “sand states” that had the biggest housing bubbles versus the rest of the country; it looks like this:

So the states that took the biggest hit have recovered faster than the rest of the country, which is what you’d expect if it was all cycle, not structural change.

I’ve done a quick and dirty take on unemployment by occupation, looking at changes in unemployment rates from the 2007 business cycle peak to the unemployment peak in 2009-10, and then the subsequent decline; it looks like this:

It’s the same as the geographical story: the occupations that took the biggest hit have had the strongest recoveries.

In short, the data strongly point toward a cyclical, not a structural story — and there is broad agreement, for once, among economists on this point. Yet somehow, it’s clear, Beltway groupthink has arrived at the opposite conclusion — so much so that the actual economic consensus on this issue wasn’t even represented on the Newshour.

Robert Reich thinks that its basically in Republican best interests to keep people unemployed and suffering.  Believe me, people are unemployed and suffering.  I can really offer us some anecdotal evidence on that as well as the numbers.

Job-growth is sputtering. So why, exactly, do regressive Republicans continue to say “no” to every idea for boosting it — even last week’s almost absurdly modest proposal by President Obama to combine corporate tax cuts with increased spending on roads and other public works?

It can’t be because Republicans don’t know what’s happening. The data are indisputable. July’s job growth of 162,000 jobs was the weakest in four months. The average workweek was the shortest in six months. The Bureau of Labor Statistics has also lowered its estimates of hiring during May and June.

It can’t be Republicans really believe further spending cuts will help. They’ve seen the effects of austerity economics on Europe. They know the study they relied on by Carmen Reinhart and Kenneth Rogoff has been debunked. They’re no longer even trying to make the case for austerity.

It could be they just want to continue opposing anything Obama proposes, but that’s beginning to seem like a stretch. Republican leaders and aspiring 2016 presidential candidates are warning against being the “party of ‘no.’” Public support for the GOP continues to plummet.

The real answer, I think, is they and their patrons want unemployment to remain high and job-growth to sputter. Why? Three reasons:

First, high unemployment keeps wages down. Workers who are worried about losing their jobs settle for whatever they can get — which is why hourly earnings keep dropping. The median wage is now 4 percent lower than it was at the start of the recovery. Low wages help boost corporate profits, thereby keeping the regressives’ corporate sponsors happy.

Second, high unemployment fuels the bull market on Wall Street. That’s because the Fed is committed to buying long-term bonds as long as unemployment remains high. This keeps bond yields low and pushes investors into equities — which helps boosts executive pay and Wall Street commissions, thereby keeping regressives’ financial sponsors happy.

Third, high unemployment keeps most Americans economically fearful and financially insecure. This sets them up to believe regressive lies — that their biggest worry should be that “big government” will tax away the little they have and give it to “undeserving” minorities; that they should support low taxes on corporations and wealthy “job creators;” and that new immigrants threaten their jobs.

It appalls me that some one classified as a “liberal”–like Ruth Marcus supposedly is–can be a mouthpiece for lies that support a decidedly illiberal agenda.   I believe Economist Mark Thoma has the correct take on this one.

The arguments serve an ideological goal. Perhaps we shouldn’t assume that the main motivation of many pundits and policymakers is economic rather than political?

True Dat.


41 Comments on “The Media and Policy Makers deliberately misrepresent and ignore Economists”

  1. janicen says:

    Well Robert Reich absolutely nails it with his three reasons. I wish I could fit that all on a tee shirt or bumper sticker.

    • dakinikat says:

      I know. Now, that was great policy analysis and every bit if it spot on.

      • Hillary would have been better on the domestic economy–too bad Reich stabbed her in the back and went with O.

        • peej says:

          Mona,
          Do you think that Hillary’s economic approach would have differed substantially from Obama’s? I see them as advocating a similar approach – pro-growth/pro-business, private sector-focused/DLC – innovation economy. Or do you think Hillary’s economic statecraft policy was one she wouldn’t have taken, but promoted it because she was loyal to the President? As Secretary of State it was her duty to fulfill the President’s policies? The latter, by the way, I don’t consider a negative.

        • peej says:

          Allow me to apologize for not responding sooner. I watched the video only this a.m. It speaks precisely to my query. Hilary’s speech/discussion presents an excellent overview of the new integrated statecraft and its justification given empirical reality, i.e. the complexities of 21st century global leadership. Though understated but strongly implied, also in meeting BRICS influence in developing nations, especially the attraction of the Beijing Consensus in emerging economies in Asia and Africa.

          However… and with all due respect, this video doesn’t answer my question – how does Hilary’s economic approach differ from Obama’s? As exciting and sensible as the new integrated statecraft is, I have a number of reservations with it. One is that it solidifies a supply-side approach globally, i.e. creating a favorable space for supranational financialization and investment which I don’t consider sustainable. It’s definitely sustainable for global investors (corporate or individual) but not for national economies or for individuals within those nations. This is my concern – or one of them, I should say.

          The last question in the video somewhat addressed this concern of an economy dependent upon “job creators” as its driving engine. Hilary’s response, was half on, and I didn’t see any divergence from Obama’s approach: Long term sustainable employment via government investment in green energy, infrastructure etc… investments that won’t bear fruit for long time- appropriate and sound, yet kind of a no brainer in how painfully obvious it is, but more importantly incomplete for restructuring the national economy diversely enough to sustain a large and multifaceted population. I’m leery at her opposition to protectionism and her devotion to a “robust market economy that is free everywhere” with dismissive lip service given to regulation. While this represents the direction the nation and the globe has been heading (intentionally), I remain convinced that this approach is not truly sustainable and the economic statecraft in the U.S. that embraces it merely exports predatory capitalism across the globe. She’s on the right track with children and families (women) globally, but again, none of what she articulated differs from Obama’s approach from what I can glean either globally or domestically. For the record, I don’t have an cogent economic alternative for directing global-local sustainable economies. This is what I seek. Still, I can’t see how this current approach represents expanding and emboldening and solidifying the status quo.

          Incidentally, this is probably a good video for Snowden/Greenwald supporters to watch for the purposes of opening the mind to how intricate and complex our challenges actually are in terms of global leadership. Hilary’s brilliant concision here really illustrates how delicate and intricate our position is and how hostile and threatening to national interests Snowden and Greenwald truly are despite their incoherent (and inaccurate) blabberings about liberty.

          Finally, despite my reservations toward integrated statecraft, one can’t deny it does represent the level of sophistication necessary for maintaining a position of global leadership (if that’s our goal). I can think of no other person in America today as qualified as Hillary Clinton to become president in 2016; this video makes that case well.

          In sum, I don’t apprehend how this video demonstrates Hilary as a fighter for the working class, middle class or non-working people or the poverty-stricken. Or her vision for a sustainable (actionable) agenda for the domestic economy. It reinforces my concerns.

          And just out curiosity, what is it that you disagree with about Hilary’s foreign policy ideas? I do have some reservations there to as expressed above – exporting predatory capitalism as a bulwark against the Beijing Consensus etc. If there is any way to separate economics from foreign policy in this integrated approach (not sure that there is) – I would probably take the opposite view. I think she’s strong with foreign policy in terms of foundation building and ubiquity, but her economic policies don’t seem at all Progressive, or responsive to actual domestic needs in either the short or long term.

          Sorry if I’m a little disjointed there, somehow I blinked myself out of the screen I was typing in, lost everything…

          • peej says:

            Again, sorry if this seems a disjointed comment – typo toward the end there – should read something more like “Still, I can’t see how this current approach represents anything other than expanding and emboldening and solidifying the status quo.” I mean, what we’re talking about here is Left-side-Supply-side. Cementation of Trickle-down economics on the Left.

          • I wasn’t talking about her statescraft, I was specifically talking about her statement on domestic politics that the rich in the US are not paying their fair share, as outlined in my post containing the video.

          • peej says:

            Right. I got that. But “fair share” is Obama’s stand too isn’t it? Since Occupy, it’s almost a platitude. I guess I’d like to hear more specificity with a Progressive tax code. Not just from Hilary, but in general too. While moving toward a Progressive tax code is critical, I’m not sure I’m convinced it is enough. Like I said, I don’t have an alternative to the innovation economy she and most of the Democratic Establishment advocates. What I’m looking for with Hillary and what I probably won’t find, is a real distinction between her approach and Obama’s.

          • Sorry but you’re comparing Obama’s position today with what Hillary was remarking at a time which was at odds with what the Obama admin was doing, their not arguing aggressively Bush tax cuts expire etc. it’s why she has to make a disclaimer that she wasn’t speaking for the Administration on that part.

            O is wishywashy. He doesn’t really talk of “the rich” when he talks of “fair share,” he’s more inclined to tell all of us Main Street we need to “sacrifice.”
            it is indeed more an empty platitude when he says a vague “fair share” careful never to demonize his business backers, and even his tax proposals now are weak and don’t really have the kind of legislative muscle from him to get it passed against such a delinquent congress.

            Hillary is emphatic here, in this statement, she is pointed, she is saying the rich have a social responsibility. She is a stark contrast to Obama’s calls at that time in the first term for the American people to sacrifice.

            This was a very rare comment from Hillary on US domestic politics during her term as Secretary of State. You aren’t going to find her domestic policy ideas and bent in those speeches, as her goal was to carry out foreign policy for the US and not work at odds with the President.

            If you go through her campaign trail and debate marks during 2007-2008 and study her history prior to that, you will find a much stronger voice on middle and working class domestic economic issues. Moreover that, I think she would actually put up a real fight against Republicans and have more legislative prowess , an area in which Obama seems thoroughly lacking.

        • peej says:

          Yes, Obama fluctuates, and his recent call for lowering corporate tax rates just had me stymied. Yes, I am comparing Hilary’s statements at the time with Obama’s general trend today. I understand your defense for Hilary’s poignancy. You are right. She was poignant. Yet, the question still in my mind is how much does Hilary’s approach toward integrated statecraft outlined in her speech differ from her own? Would an H. Clinton administration follow these same policies? I’m concerned if she does. And I can hardly see how she couldn’t.

          I didn’t see the 2007-2008 campaign trail so I have nothing to go on there. I should qualify that. I saw little of it and what I did see was through the lens of overseas journalism – which favored Obama considerably. I didn’t see any heated contention, which apparently took place, because the American presidential race just wasn’t covered quite that way. Please don’t misunderstand me. I don’t ask questions to challenge you. I ask questions in an effort to dispel my ignorance. I’m trying to glean clear distinctions between Clinton and Obama. I like Hillary a lot. As I mentioned, I can’t think of a person more qualified than she to hold the office of President. I like Obama too; I’m not attempting to disparage him. I think you are probably right about both and legislative prowess.

          I hear a lot of hyperbolic even propagandistic criticism from the Anti-Obama left. At times I find it challenging to glean any realism out from between the Anti-Obama right and the Anti-Obama left. I’m certain that my concern for an agenda too similar to Obama’s is going to arise among the Anti-Obama left should HIllary run in 2016. I’m just trying to get some clarity. 🙂

          Hope you are feeling better.

  2. peej says:

    Am I elated that you’ve noticed the Conservative-Libertarian shift at PBS. I’ve been squawking about this for years. I’ve abandoned PBS for news completely. Chalk it up to defunding it, forcing it to be at the mercy of the patronage system in the private sector and perverting the goal for establishing public television in the process.

    Say, if it isn’t a bother could you clarify something for me? Can you tell me what “structural” means as opposed to “cyclical” – I think I broadly get cyclical as a boom and bust (unnecessary too), but I don’t really understand what structural means and why it requires an austere solution. Just a brief summary if possible. If not, that’s okay.

    • dakinikat says:

      and a Koch Brother on the Board of Directors.

      Structural unemployment is due to a fundamental mismatch in the types of jobs available and the skills people have in the job search process. It essentially blames the worker for not having the correct skills, education and training.

      • peej says:

        Ah yes, the “Knowledge Economy” conundrum. I am aware of the definition, but I never knew this was known as structural. Thank you for explaining that – the light bulb is on now, shining bright! Forgive my ignorance.

      • RalphB says:

        Structural causes are largely a crock. Though I think there be some in the skilled trades positions.

        • dakinikat says:

          I think there was some original speculation that construction workers would be less necessary. however, this ignores our aging infrastructure.

          • RalphB says:

            Yep but not just construction. At some point everyone will need a plumber, electrician, mechanic etc. Shortages will be there, if anywhere.

      • a Koch Brother on the Board of Directors.

        Oh yeah….bingo!

  3. bostonboomer says:

    Hi Dakinikat,

    I don’t know why the media does this with economics or how they get away with it. The media often gets psychology stories wrong, but they usually at least refer to real studies and quote from actual researchers and psychologists. The only reason for ignoring economic expertise seems to be political.

    I don’t consider Ruth Marcus a liberal. She’s a Broderite–one of those pundits who promotes “bipartisanship” and the ruling class consensus. She has long argued for cutting Social Security and Medicare–anyone who does that can’t possibly be called a liberal. She and Brooks agreed on pretty much everything and both ignored reality completely.

    As for PBS, they are deeply beholden to the Koch Brothers and David Koch is on their Board of Trustees. We have to assume that PBS tailors its coverage to satisfy the Kochs and other rich and powerful contributors. See this article in The New Yorker by Jane Mayer.

    Here’s the response from the PBS ombudsman

    • dakinikat says:

      It always confuses me that Marcus gets a liberal label … she is such a tool.

    • peej says:

      Thanks for mentioning the Mayer article. When the New Yorker released this story, the AP nonsense was ruffling all the media’s feathers – getting them all aflutter and aghast at infringement of freedom of the press – incorrectly, I might add. It was Mayer’s Koch story that represented the genuine Constitutional infringement of “freedom from prior restraint” by removal of the office of Impimateur embedded in Liberty of the Press. Koch of course, reinstated the office of Imprimateur that the Constitution was supposed to have abolished. Even Mayer herself wrongly hopped on the AP bandwagon. Surreal.

      • bostonboomer says:

        I can’t agree with you about the DOJ monitoring to AP’s phone calls. That was just wrong.

        • peej says:

          We must agree to disagree :). Treating the media as an untouchable industry enshrined in the Constitution is a gross misinterpretation of Freedom of the Press. “Press” as understood in a First Amendment context literally means “printing press” not “journalism.” Its intent was to free not just proto-journalists, but poets, playwrights, pamphleteers, authors, essayists, critics, and publishers of all kinds from pre-screened, pre-approved, pre-shaped publication, free from being subject to a censor or a company of stationers. It wasn’t intended to lionize “media” or “journalism” and offer it any kind of shield or preferred status ahead of writers, artists, bloggers, or anyone else who publishes. It certainly wasn’t intended to render individuals or press entities immune from culpable activity. That the media regards itself otherwise is ahistorical and a shameful distortion. There is absolutely no reason the DOJ should treat the media any differently than any other entity in a criminal investigation. The AP were party to a prosecutable crime. Their source violated the law. There’s no prior restraint violation in the way the DOJ handled the AP case. AP was grossly negligent, and they abused the undeserved privilege granted them as “press.” Their leak severely disrupted operations undertaken jointly by the US, Britain, and Saudi Arabia. Not only would that disruption be disturbing enough, but I imagine that coordinating between three nations in covert operations is a task more complicated than it seems. To jar that effort as AP did could create little shock waves of disruption in diplomacy and future joint ventures. Those little aftershocks may be extremely difficult to detect and they might manifest or indirectly lead to events with great impact. I don’t think it’s the Press’s job to decide what is fit to print and what is not when it pertains to national security. They’re simply not in a position to make an informed decision, and their goals are scoop and profit, not national security. Their leak did put lives at risk and put an end to counter-terrorism operations inside Yemen. Therefore they broke their public trust to operate responsibly and credibly.

          The DOJ did exactly what it should do – pursue leaks aggressively. The media doesn’t represent the people. It may contend that it does ideally or that it theoretically serves the people, but it doesn’t function on behalf of the people. The DOJ does. I don’t have any problem at all with the DOJ monitoring AP phone calls in a criminal investigation, and that’s what the AP situation is. Again, I don’t consider leakers heroic or leaks inherently beneficial to the public. Leaks can be manipulated for propaganda purposes just as easily as not or for more sinister purpose.

  4. I really don’t understand Brooks et al argument. What are they suggesting we do about structural unemployment even, if that’s what they think it is? I think they are perverting the notion of structural and just using it to suit their own agenda.

    • dakinikat says:

      That people are out of work because their skills don’t fit available jobs or they live in the wrong place

      • No I get that, but what are they offering as solutions?

        Probably more of Brooks saying the usual, that the rest of us are all damned and we should just acquiesce to our fate.

        In other words, I don’t see how they actually even believe it is structural, just that saying so is a convenient talking point to gloss over policy changes as having any meaning.

        It reminds me of a column Brooks wrote years ago that I actually made my way through(usually I admittedly cannot, he is insufferable)…it was like watching a train wreck as he explained how policy changes aren’t of any value

        • dakinikat says:

          Nope … just more poor shaming

          • Excuse me for going on, but It seems that overall– and not just in this egregious case of Brooks and Markus ‘anal’ysis alone–the beltway pundits just use “cyclical” and “structural” at whim whenever one or the other rhetorical flavor suits their agenda, they don’t look at basic facts or trends that even lay people can understand and feel concretely as an economic reality in their lives, let alone what economists say. They certainly don’t think we li’l peeps are sentient enough to pick up on the cognitive dissonance and whiplash.

            I’m reminded here too of Donna Brazille in May 2010 saying suddenly it dawned on her that its about jobs. Not back in ’08 or anything. Not in 2000 either. but in May of 2010.

            Yes, we deserve better discussants–on policy and on politics. The beltway mentality is so far removed–it’s like that comic JJ posted, of the view from Saturn…with the White House and House Republicans removed from planet earth. Just add the DC beltway punditry and media as another removed entity to that.

      • Fannie says:

        As in Detroit…….