Sunday, September 30, 2018

Fiscal Recklessness, 2018 Edition

I was invited to present a lecture at Middlebury this past week on "Income Tax Policy and Economic Growth." I wanted to present a picture of just how bad the projected federal deficit is for the next decade. The following graph, which shows the last 50 years of data on the unemployment rate and the federal deficit, is what emerged:

Sources: CBO, BLS
The horizontal axis is the unemployment rate, as a percentage of the labor force, and the vertical axis is the federal deficit, as a percentage of GDP. Other things equal, we would expect the line to be downward sloping -- the higher is the unemployment rate, the worse will be the deficit, as both automatic stabilizers and additional stimulus efforts kick in. Each blue dot represents the year indicated over the last 50 years, 1968 - 2018. The best-fit linear relationship indicated by the blue dots is about -1.2: for every additional percentage point of the labor force that is unemployed, the federal deficit widens by about 1.2 percentage points of GDP.

Departures from that general tendency indicate budget policy that was unusually strict (toward the Northeast direction) or unusually loose (toward the Southwest direction). The orange dots are the next 10 years of projections, based on CBO data. Note that there is no recession projected in these data -- the unemployment rate is projected to remain below 5 percent over this decade. Despite this rosy economic projection, the deficit is always about 4 percent of GDP or larger. We will have never had deficits that large as a share of GDP with unemployment that low. Relative to where we were 20 years ago with similar unemployment rates, we are running deficits 5-6 percentage points of GDP larger. That's President Trump's fiscal record.

That is the mess we are in. My main concern is intergenerational equity -- there is no ethical reason to pass along the burden of financing structural deficits to future generations. And then, eventually, there will be further concern if and when the rest of the world decides it is no longer content to allow us to roll over our debt at such favorable interest rates.

Friday, September 21, 2018

Bad Journalism, Bloomberg Style

Some days, you just have to wonder. What could be the motivation for an article in Bloomberg news that starts out like this?

U.S. Students Spend More Time Working Paid Jobs Than Going to Class

Facing mounting debt, U.S. college students spend double the time working paid jobs than in the library. 

The rest of the article goes on to explain how awful it is for students, what with all the work and borrowing. But the proof of this assertion is a survey by HSBC in which students were prompted with the question, "On average, how long do you spend doing the following each day?" Here are the answers:

Going to lectures/tutorials/seminars: 2.3 hours
Visiting the library: 1.5 hours
Studying at home: 2.8 hours

That's a total of 6.6 hours on school work.

Working (paid employment): 4.2 hours
Volunteering (unpaid): 0.9 hours

That's a total of 5.1 hours on work unrelated to school. So yes, based on these categories, 4.2 > 1.5 and 4.2 > 2.3, so the facts asserted in the headline and the statement that follows it are true. But 5.1 < 6.6, so what's the big deal?

But wait, there's more. The same survey reports the following responses for the rest of the day:

Texting/messaging/emailing: 2.3 hours
Watching streaming devices: 2.2 hours
On social media: 2.5 hours

So that's 7 hours on screens, more than both school work and paid work. (Also listed are 4 hours of socializing.) I guess if I were going to write a news article in Bloomberg and be objective about it, I would include that. But then how could I make the case that life is somehow unfair to students because, what, between school work and other work, they only get to spend 11 hours socializing or looking at screens?

When I blogged about the media earlier this month, noting that with the increase in quantity we have seen some bad examples of quality, this is the sort of media I had in mind. A survey has been cited selectively and incorrectly to push a point of view. Further, I first came across this in my local paper, which had no link to the survey. This is bad journalism. It is unprofessional. And it erodes the trust we'd like to have in those who bring us the news.

Tuesday, September 11, 2018

Ratf**ked, Now From the Left

About a year ago, I read the book Ratf**ked: Why Your Vote Doesn't Count, by David Daley. It is an eye-opening account of how some Republican strategists figured out that by flipping a few state legislatures from blue to red, the Republicans would get to control the redistricting process after the 2010 Census and draw the maps for those states to favor their party. The book has chapters on Pennsylvania, North Carolina, Michigan, Ohio, Florida, Wisconsin, and Arizona -- the states where we have seen increased attention since. The strategy was quite successful. The books is worth your time, as a means of better understanding what happened in 2010 and sorting through the challenging issues associated with the Constitutionality of gerrymandering.

In today's Washington Post, James Hohmann describes (without reference to Daley's book, strangely) what some left-leaning groups are doing between now and the midterm elections to try to run that strategy on behalf of Democratic candidates. Midterm elections tend to favor the party that does not hold the Presidency, and the Tea Party was ascendant while the Democrats were snoozing in 2010. But in 2018, the midterm effect favors the Democrats, and in 2020, they will be driving high turnout due to their dissatisfaction with President Trump. So they are poised to make gains. What they won't have is an opposing party that is not paying attention. There is nothing magical in the way Democrats would figure out which races to target, so I expect the Republicans to contest them vigorously. If you are in one of those districts, I don't envy the political ads and robocalls you will be experiencing over the next two months.

Thursday, September 06, 2018

How Shall We Be Judged? Old Media Edition

Chuck Todd has written over 2300 words in his manifesto, It's Time for the Press to Stop Complaining -- And Start Fighting Back, and omitted the most important one: CNN. While there is no disputing the unique role that Fox News has played, the precipitating event came earlier, when CNN introduced the 24-hour news format.

Prior to that innovation, television news was not much of a profit center and so the amount of time devoted to it was limited. That quantity restriction promoted quality. If news would take up only a couple of hours a day, there was only room for the best programming. And the best people. I got my news from ABC -- Frank Reynolds, Ted Koppel, Max Robinson, and Peter Jennings. Prior to the 24-hour news format, if I was watching news on TV, I was watching professionals at their best. I was also watching reporters report on news, often in real-time.

Yes, CNN offered something new. I remember the early days of Crossfire with Braden and Buchanan as particularly good. But let's face it. There aren't 24 hours of news, and with the quantity restriction gone, the quality of the programming suffered. And the quality of the people fell as well. Crossfire's demise shortly after Jon Stewart's 2004 appearance captures this decline well. And if I am watching cable news, I am not watching only professionals at their best. I am also generally not watching reporters report on news. Most of what I am watching is a cacophony of multiple people, many but not all of them obvious partisans, commenting on events, many of which would not have made it on the air in the quantity-restricted era.

So when Todd writes, "The American press corps finds itself on the ropes because it allowed a nearly 50-year campaign of attacks inspired by the chair of Fox News to go unanswered," he's missing an important part of the story. The American news industry started peddling opinion and commentary as news, and now the press corps is dealing with the fallout. It is being judged according to its worst elements. There is no shortcut out of this mess, and the road to redemption certainly isn't to "Fight Back." The way forward is to return to basics -- in this case, reporting facts and events as they happen and airing only the most exemplary of its efforts.

Saturday, March 10, 2018

Le Premier Amendement

If you need a reminder of why the First Amendment is so important, look no further than this recent story in The Washington Post about the crimes with which Marine Le Pen has been charged. The event in question is reported as follows:
Le Pen, well known and often criticized for inveighing against Islam, posted the tweets at issue in December 2015, not long after the Islamic State claimed credit for a string of coordinated terrorist attacks, including explosions, suicide bombings and shootings that left 130 people dead in the French capital. 
At the time, a French expert on Islam compared the National Front’s growing popularity among French conservatives to “jihadism,” as Le Monde reported
In response, an outraged Le Pen tweeted three grisly photographs with the text “That is Daesh!” using a nickname for the Islamic State.
Much as I disapprove of what Le Pen represents as a politician, the onus would now be on the so-called expert on Islam to provide evidence that the National Front engages in behavior comparable to the gruesome actions of the jihadists depicted in the photos Le Pen posted or to disavow the comparison (which is a bit more nuanced in the original source than reported above).

But why let grownups engage in such debate. Here is how the incident has recently played out:
Marine Le Pen, the leader of France’s far-right nationalist party, was charged in criminal court on Thursday for posting images to Twitter showing brutal killings by Islamic State fighters.
Prosecutors in the Paris suburb Nanterre accuse Le Pen, president of the National Front party and a member of parliament, of distributing “violent messages that incite terrorism or pornography or seriously harm human dignity,” as reported in the Guardian.
The crime under French law barring extreme speech carries up to three years in prison and a roughly $90,000 fine, though Le Pen’s status as a political figure would probably shield her from a stiff sentence were she convicted.
The charges came about four months after France’s National Assembly voted to strip Le Pen of immunity from prosecution, triggering an investigation into the 2015 tweets.
That's a fascinating take on civil rights. As I have noted before with regard to Le Pen, it is an unforced error to make her a sympathetic figure by reporting on her with bias or, in this case, prosecuting her for engaging in political speech.