The Management Consulting Business

Christopher Ingraham, writing in The Washington Post, links to an old working paper of mine in his article, How consulting companies like McKinsey optimized American inequality. The paper began as my co-author, Ajay Prakash's senior thesis, which I advised and then helped revise. This topic is in the news of late due to Pete Buttigieg's experience working at McKinsey and the perceived need by the chattering class to demonize just about everything on everyone's resume. I currently have no intention of casting a vote for Mayor Pete in 2020, but I don't hold his McKinsey experience against him.

The subtitle of the article is, "Two things tend to happen when businesses hire a management consultant: Stock performance rises and payroll falls." To be clear, the announcement effect is negative but the long-term effect is positive risk-adjusted returns on a scale that more than offsets the bad news at the announcement. That shows that whatever happens after the consultants are brought on board, it tends to turn the company around. The article should suspend its focus on distributional issues between shareholders and workers long enough to acknowledge that this is consistent with the consultants adding value to the economy.


What I found frustrating about the article is that it doesn't seriously engage with the counterfactual. Our paper also found that "announcing companies earn negative risk adjusted returns prior to their announcements." This means that the company was underperforming, and that underperformance was going to have be addressed, whether through the consultant's advice and actions or some other way. Imagine the firm failed instead. The workers who lost their jobs would be in the same position, but every other worker is better off due to the consultants. To give some sense of the scale of the two groups, we found that the median employment growth (relative to the industry) was -5% for firms that announce they've hired a management consultant. Is it really unacceptable to lower employment by 5% if it means shoring up the other 95%?

I would say 'no.' What I would say as well is that I would like to know that the workers who are displaced are treated fairly, whether through unemployment insurance or some other mechanism. For example, publicly traded companies that lay off workers under such circumstances might be required to offer severance in the form of warrants (stock options issued by the company to those workers). If the company does well as a result of the layoffs, then those who were laid off share in that improvement.

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.

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.

The Republicans Have Done Their Job?

My op-ed on the fiscal grand canyon in Sunday's New York Daily News topped the list of Must Reads on yesterday's broadcast of Morning Joe.


Listen carefully to what Scarborough says around 6:40 of the clip.  I think you are going to hear it a lot in the coming months.  He says, "Taxes were increased in the House of Representatives … The Republicans have done their job."  Earlier, he says, "Taxes have been raised ... That card has been taken off the table." You can bet the Republicans will use a similar talking point to fight any future tax increases.

The tendency for public discussion -- and future partisan talking points -- to not distinguish between a small, targeted tax increase that raises inadequate revenue and the broader tax increase back to Clinton-era tax rates that would have raised a lot of revenue is the reason why Obama should have held out for as much new revenue as going over the fiscal cliff would have produced.  He could then have negotiated with the Republicans on how much additional spending or tax relief to offer to mitigate the threat to short-term economic activity.

Pass the Spittoon, Mortgage Meltdown Edition

I confess: I get annoyed beyond measure when I read articles like this one from Alan Zibel and J.W. Elphinstone of the Associated Press, which ran in my local paper this week. It manufactures drama where none is warranted. Here's the hook:

Just when consumers and the U.S. economy need banks to lend more freely, the mortgage industry is making it harder to borrow — even for those with good credit.

Mortgage insurers, whose backing is required for borrowers who can't afford the traditional 20 percent down payment on a home, have already flagged nearly a quarter of the nation's ZIP codes where they refuse to insure some home loans.

I'm already annoyed in three ways, and it's just two sentences in:

1. Consumers and the U.S. economy do NOT need banks to lend more freely. Banks lending too freely is what got us into the current mess.
2. The traditional 20 percent down payment for a home exists in part because mortgages are nonrecourse loans--the property is the only security the lender has in the transaction. While some reductions of that number may be appropriate, it was the abandonment of sensible lending standards that got us into the current mess.
3. The word "some" in the last sentence smuggles in quite a lot. If the meaning of "some" were made plain early in the article, we would stop reading and disregard the article as not worth our time.

We do find out what "some" means later on in the article:

In recent weeks, mortgage insurers have flagged more than 9,600 ZIP codes in at least 34 states where they won't insure certain types of home loans — those for investment properties or second homes, those with riskier adjustable-rate or interest-only mortgages, or for buyers making down payments of less than 3 percent.

"Some" home loans are now revealed to be loans that are extremely risky--loans whose pervasive use are what got us into the current mess--in areas where house prices are declining the most. So a shorter version of the article is that mortgage insurers are now not willing to insure loans that they shouldn't have been insuring earlier. That this is a good thing has completely escaped the notice of the two authors.

Samwick Media Watch

I'll be on NPR's Marketplace this evening, putting in my 1% of a share of Bear Stearns stock on the goings-on in financial markets. The theme--is this fair and why should you care?

Find your local station here.

What the Unemployment Rate Misses

In his Economic Scene column in today's New York Times, David Leonhardt discusses the challenges of measuring unemployment and using the unemployment rate to assess the state of the labor market. In a nutshell, we have a fairly low official unemployment rate and yet many people not working. In this excerpt, he focuses on a distinction that his colleague Paul Krugman once glossed over (to much fanfare in my first month of blogging):

There are only two possible explanations for this bizarre combination of a falling employment rate and a falling unemployment rate. The first is that there has been a big increase in the number of people not working purely by their own choice. You can think of them as the self-unemployed. They include retirees, as well as stay-at-home parents, people caring for aging parents and others doing unpaid work.

If growth in this group were the reason for the confusing statistics, we wouldn’t need to worry. It would be perfectly fair to say that unemployment was historically low.

The second possible explanation — a jump in the number of people who aren’t working, who aren’t actively looking but who would, in fact, like to find a good job — is less comforting. It also appears to be the more accurate explanation.

As we discussed briefly then, the BLS does collect measures of unemployment that progressively relax the condition that individuals have to be actively looking for work. Leonhardt characterizes them as "broader but not especially useful." I don't think they should be dismissed so readily. They are found in Table A-12 of the monthly employment report. You can get the historical data here. Let's go to the picture.




The 4 curves are as follows:

• Blue: The conventionally measured unemployment rate, currently at 5 percent and low by historical standards. This is the number unemployed divided by the total number in the labor force (employed plus unemployed).


• Red: Add people classified as discouraged workers--those who have given a job-market related reason for not currently looking for a job--to the unemployed. The increase is very slight--historically between 0.1 and 0.4 percentage points.


• Yellow: Add people classified as marginally attached (beyond being discouraged)--those who currently are not looking for work but indicate that they want and are available for a job and have looked for work sometime in the recent past. This currently adds 0.8 percentage points to the unemployment rate, which is typical of the full 14 year time period.


• Green: Add people classified as employed part time for economic reasons--those who want and are available for full-time work but have had to settle for a part-time schedule. This number is currently 9 percentage points of the labor force (augmented to include those marginally attached or employed part time for economic reasons).

The last measure seems to be a pretty good measure of labor underutilization. What does it tell us about what the conventional unemployment rate misses? In April 2006, the gap between the two shrank to 3.4 percentage points, compared to 4.1 percent today. The latter figure is about the size of the gap that prevailed around the recent peak in the unemployment rate in 2003. The gap was greater than 4.1 percent in most of the months shown prior to 1997. The gap was as narrow as 3 percentage points as the unemployment rate reached its lowest values in 2000.

The more comprehensive measures of labor underutilization are available and are consistent with the story being told in the article, though you have to get to "employed part time for economic reasons" to get much of a gap. I think they would be more "useful" to journalists if journalists chose to report them.

Barry Ritholtz also comments on the story and refers back to a measure of the "augmented unemployment rate," which doesn't include the economic part timers but also doesn't require that those who want a job have actually looked for one. (This information can be calculated from Table A-1 of the monthly employment report.) At present, there are about 5 million who "want a job" among the roughly 80 million who are not in the labor force, or about 6.25 percent. This proportion has stayed around 6 percent for several years.

Krugman's Keys to a Landslide Victory

The phrase "Obama Derangement Syndrome" has entered public usage. It seems to have two strains. The first is adulation for Senator Obama beyond what can be linked to his accomplishments in public office. The second is the more usual strain, irrational dislike, which has to date infected a number of Democrats, but none more publicly than Paul Krugman. He continues his quest to be the poster boy for ODS in his New York Times column today, "Deliverance or Diversion." Stay with this excerpt until the punchline:

But Mr. Obama, instead of emphasizing the harm done by the other party’s rule, likes to blame both sides for our sorry political state. And in his speeches he promises not a rejection of Republicanism but an era of postpartisan unity.

That — along with his adoption of conservative talking points on the crucial issue of health care — is why Mr. Obama’s rise has caused such division among progressive activists, the very people one might have expected to be unified and energized by the prospect of finally ending the long era of Republican political dominance.

Some progressives are appalled by the direction their party seems to have taken: they wanted another F.D.R., yet feel that they’re getting an oratorically upgraded version of Michael Bloomberg instead.

Others, however, insist that Mr. Obama’s message of hope and his personal charisma will yield an overwhelming electoral victory, and that he will implement a dramatically progressive agenda.

The trouble is that faith in Mr. Obama’s transformational ability rests on surprisingly little evidence.

Mr. Obama’s ability to attract wildly enthusiastic crowds to rallies is a good omen for the general election; so is his ability to raise large sums. But neither necessarily points to a landslide victory.

So, in this installment of Krugman's anti-Obama screed, Democrats are supposed to be concerned about Senator Obama winning the nomination because it is not clear that he can secure a landslide victory in the general election. And if they believed him, and thought twice about voting for Senator Obama in the remaining primaries, they would instead vote for Senator Clinton.

Going first to personalities, is it really Krugman's contention that the odds of a Democratic landslide victory are higher with Senator Clinton than with Senator Obama as the nominee? Going next to tactics, is it really Krugman's contention that the odds of a Democratic landslide victory are higher with Senator Obama campaigning to the political left of where he is now? Or that they are higher if he makes partisan rhetoric a more central part of his campaign? If he holds any of these views, then he's got precious little company among rational people in holding them.

I don't doubt that Krugman and many others would be happier if they could implement a more so-called progressive agenda as a result of the 2008 election. But this group does not comprise a majority of the voting public, to say nothing of a landslide majority. Absent that majority, the candidate needs to have appeal beyond the political left.

And, yes, many people -- myself included -- do fault the Republicans of the last several years for the poor state of public policy today. They've had the presidency since 2001 and majorities in Congress over much of that time. To not hold them responsible would be ridiculous. But that does not mean that we would opt for government by a 51% majority in the opposite direction if there is a possibility of something based more on a broad-based, politically centrist consensus. People seeking that consensus will be voting for Senator McCain or Senator Obama.

Speaking Volumes

If you read carefully, you can learn quite a bit about Senator Clinton's presidential campaign from a recent interview with her in the local Valley News. Here are the opening paragraphs:

West Lebanon -- U.S. Sen. Hillary Clinton yesterday rejected suggestions that she is running a scripted presidential campaign that is avoiding substantive answers, saying she is the most experienced Democrat in the field to take on Republicans.

“I want to govern as a progressive Democrat, but I'm going to run a disciplined campaign that is a winning campaign, and part of that means staying on message, so that's what I do, day in and day out,” Clinton said yesterday in a meeting with Valley News editors and reporters.

Someone will have to explain to me how she can simultaneously "stay on message" while rejecting suggestions that "she is running a scripted presidential campaign."

And what's this about being the most experienced Democrat? The article suggests an answer:

The former first lady, who recently turned 60, said her political activism dating back to the 1960s, and vast exposure to the national spotlight, leave her “better prepared to take on what needs to be done in Washington.” And she said her experience as first lady in the turbulent Clinton White House, and in running for Senate in her adopted state of New York, have steeled her to take on a general election campaign for the presidency.

“Speaking from experience, until you've been through it, you have no way of knowing how you are going to react. It is not an intellectual exercise; it is visceral,” Clinton said. “At the end of the day, I think I'm in the best position to win.”

So the experience in question is not experience in governing. It's experience in campaigning. Although it may not seem like it today, that campaign will end. Then what? More from the article:

“It's not just what I say on a stage in a debate, and what point I score and whether my opponents attack me, or whatever,” she said. “I try to think responsibly about, OK, when I'm president and I actually want to do this, how am I going to do it, and how am I going to avoid having said something during the campaign that will come back and undermine what I think my responsibility is, which is actually to get something done.”

She would apparently not want to be constrained in what she will do based on what she has said she will do. And, of course, we are supposed to cast our votes for her to "get something done," when we are not told in advance what that something will be.

Samwick On Point

I will be on NPR's "On Point" today, joining a discussion with Bill Gale and John Harwood on "America, Taxes, and Election 2008." Listen live at 10 a.m. or download the podcast later in the day.

UPDATE: The podcast is now available at iTunes.

TimesSelect, We Hardly Knew You

I remember the day I subscribed to TimesSelect. I couldn't critique the opinions I wanted to without forking over the money. And it was also my prophecy this spring that, "Eventually, we all blog for Google." The two have collided, and the former has died. Felix Salmon lays out the details.

I thought TimesSelect was a wonderful thing. It imposed a $50 per year tax on a readership whose opinions were almost certain to be opposite of mine. I'm going to miss it.

Rhetoric Reality Check

If, contrary to experience, you opened up Paul Krugman's New York Times column (excerpted here by Mark Thoma) expecting economic insights, you will be quite disappointed once again. His thesis today is summed up in the statement:

Arguably, the current state of the Republican Party is such that only extreme narcissists have a chance of getting nominated.

I suppose a lot of things are "arguable," like whether Governor Mike Huckabee, who is both one of the least narcissistic people walking the Earth and the runner-up in this weekend's Iowa Straw Poll of Republican candidates, has a chance of getting nominated. But this is just Krugman being Krugman. What caught my eye was the next statement:

To be a serious presidential contender, after all, you have to be a fairly smart guy — and nobody has accused either Mr. Romney or Mr. Giuliani of being stupid.

Really? What Presidential primary contest is he watching? Here's what Google has to say on the matter:

http://www.google.com/search?hl=en&q=romney+stupid

http://www.google.com/search?hl=en&q=giuliani+stupid

Much of the political commentary surrounding the election will, in some way or another, be the political fringes on the right and the left calling some candidates stupid; that is, when the rhetoric does not rise to the level of calling them "extreme narcissists" in major media outlets.

When Television Is Bad, Nothing Is Worse

I watched some bad television over the weekend. It reminded me of this classic speech by FCC Chairman Newton Minnow in 1961, addressing a group of broadcasters, when television was considered the "New Frontier." It is sometimes known by the last two words of the following excerpt:

But when television is bad, nothing is worse. I invite you to sit down in front of your television set when your station goes on the air and stay there without a book, magazine, newspaper, profit and loss sheet or rating book to distract you -- and keep your eyes glued to that set until the station signs off. I can assure you that you will observe a vast wasteland.

His prescription, it seems, was greater competition:

I have told you that I believe in the free enterprise system. I believe that most of television's problems stem from lack of competition. This is the importance of UHF to me: with more channels on the air, we will be able to provide every community with enough stations to offer service to all parts of the public. Programs with a mass market appeal required by mass product advertisers certainly will still be available. But other stations will recognize the need to appeal to more limited markets and to special tastes. In this way, we can all have a much wider range of programs.

Television should thrive on this competition - and the country should benefit from alternative sources of service to the public.

In the intervening 45+ years, we've seen substantial increases in the number of content providers. Using Minnow's criteria, I think the best programming has gotten better, and the worst programming has gotten worse. That's what competition does when there is variety in tastes and a lofty standard for performance.

YouTube is the One in the One-Two Punch

All things considered, I rate this debate as highly as any of the other Democratic debates, largely because the YouTube questions did not come from a member of the media. It may have been just The Wisdom of Crowds generating better questions, but the format conferred two advantages. First, candidates were under more pressure to address the specific question being asked to a greater extent than in prior debates. Being dismissive of Anderson Cooper doesn't cost a candidate anything, but being dismissive of "ordinary" Americans wouldn't score any points. So the video asks, and the moderator can follow up. Second, it is easier for Anderson Cooper to cut off debate on a stupid question from a YouTube video than (under the traditional format) if he had asked it himself.

From my own vantage point, I thought that, as in previous debates, Senator Clinton entered as the frontrunner and didn't lose any ground to her principal challengers (Obama and Edwards). It will be interesting to see when (or if) Senator Obama starts to draw sharper comparisons in order to close the gap. Of the remaining candidates, I thought Senator Biden made a good showing, particularly on questions related to foreign policy that played to his considerable experience.

Eric Francis Gets a Voxy

Brad DeLong frequently asks, "Why oh why can't we have a better press corps?" Perhaps the answer is that he doesn't subscribe to our local Connecticut Valley Spectator. In this week's edition, contributing writer Eric Francis dissects our local Ruby Ridge in the making. A teaser:

PLAINFIELD - Alice in Wonderland said it best: "If I had a world of my own, everything would be nonsense. Nothing would be what it is, because everything would be what it isn't."

On Monday, two dozen reporters from as far away as Boston and Washington, D.C. were treated to a first-hand look at the parallel universe of Ed and Elaine Brown when the couple called a press conference on the front porch of their Plainfield home and vowed not to be taken alive by the U.S. Marshals who have been tasked to bring them into custody so they can start serving their five-year federal prison sentences for tax evasion.

Let's give him a Voxy and get him in the White House press corps.

Race and Performance in the NBA

The New York Times article this week about the study of racial bias in NBA officiating by Joseph Price and Justin Wolfers generated quite a bit of commentary. What is amazing is how little people understand, or are willing to understand, about statistics. Here's what the authors claim in the abstract of the study:

We find that--even conditioning on player and referee fixed effects (and specific game fixed effects)--that more personal fouls are awarded against players when they are officiated by an opposite-race officiating crew than when officiated by an own-race refereeing crew.

Much of the reaction among sportswriters has been to take the authors to task for calling the refs racist. (See Mike Wise in his column in Thursday's Washington Post and Kevin Hench at FoxSports.) Having taken a look at the study myself, I am surprised that those who make a living based on the sport would be so dismissive of the result. The main result of the paper is that the foul rate (fouls called per 48 minutes played) increases for black players when the racial composition of the three-person crew of referees goes from black to white. (See Table 4 and the discussion on page 8.) Any honest sportswriter should hold the NBA accountable for the result--why are the outcomes for fouls different across different racial configurations of refs and players?

It is very difficult to posit an explanation for these results that would attribute them to something other than race. First, no one disputes the NBA's claim that it does not assign referees to games based on their race or the racial composition of the two teams. (See page 4 and Table 1 of the study for discussion and evidence.) With (conditionally) random assignment, and the fact that the explanatory variables are fixed characteristics of people (i.e., race), we have the conditions for a clinical trial here, where "controlling" for possibly confounding factors is not likely to be important. Second, the authors do in fact control for a number of "fixed effects," exploiting the fact that their dataset is a panel consisting of a limited number of individuals observed in numerous interactions. This includes characteristics of the player and the refs that don't change over time. As the authors note, the most comprehensive results "are identified only off the differential propensity of teammates to earn extra fouls when the refereeing crew is of the opposite race."

Having said that, I think the authors soft-pedal one possible explanation of the results that would exonerate the refs. The following passage appears on pages 12-13:

The fourth point speaks to a relatively subtle interpretation issue: while we document a correlation between a player’s foul rate and the race of the referee, this may reflect the players responding to the race of the referees, rather than the referees policing opposite-race players more aggressively. Strategic responses by players would lead to an attenuation bias: expecting to receive more fouls for a given style of play, the players may play less aggressively, minimizing the impact of referee discrimination on realized fouls. This suggests that our results understate the amount of discrimination. Alternatively, if players exhibit oppositional responses, they may play more aggressively when policed by the opposite race. Importantly, such oppositional responses suggest that our findings are driven by changes in player behavior, rather than referee behavior. Yet if this were driving our results, one might expect to see effects not just on the number of fouls earned, but on the likelihood of fouling out, as well as other indicators of aggression, including blocks and steals. Instead, we find that blocks and steals actually decline under opposite-race referees.

I'm not persuaded by this reasoning. The player response needn't take the form of aggression--it merely needs to be a general decline in player performance in the presence of opposite-race referees. What if, for example, players find it more difficult to concentrate on their tasks when the refs are of opposite race? Elsewhere in the paper, the authors write, "Player-performance appears to deteriorate at every margin when officiated by a larger fraction of opposite-race referees." So why assume that it's the refs not the players? And why make a statement, "Basically, it suggests that if you spray-painted one of your starters white, you’d win a few more games," even under the possible coaxing of a reporter?

The interpretation of the results that it's the players, not the refs, may also reconcile the results of NBA's internal studies that claim that, on a call-by-call basis, there is no evidence of racial bias. (The NBA has not released the results of these studies, much less the data.) If the players are changing their game based on the racial composition of the refereeing crew, then it is possible that every call or non-call is legitimate, and both studies can be accurate.

A Game Show Rather than a Political Forum

I watched the Republican "debate" last evening. For what it's worth, I thought Tommy Thompson gave one of the best answers (on making Iraq more of a legitimate federal system) and one of the worst answers (on not opposing an employer firing an employee for being gay) of the evening. Overall, I think Captain Ed's summary at the NRO symposium was on the mark:

I think the first question we have to answer is “How did MSNBC do?” Answer: Poorly. This presidential debate resembled a game show rather than a political forum. We had three moderators, one of whom insisted on rambling all over the stage to ask questions from the online audience. Those questions made the MTV “Boxers or briefs?” question seem thoughtful and relevant at times. One bright light apparently expected an answer to “What do you dislike most about America?” Lightning-round queries by Matthews left the candidates understandably frustrated when complex questions left no time for good answers. The format also made for uneven candidate participation; we heard less from Rudy Giuliani than we did from Ron Paul.

Mitt Romney had the best night. Calm, warm, thoughtful, and engaging, he looked and sounded like a serious presidential candidate. John McCain and Giuliani didn’t do themselves any favors, and at times did some damage, but managed to rally back to adequacy. Jim Gilmore, Mike Huckabee, and Duncan Hunter made cases as real candidates, while Sam Brownback didn’t quite get over that hump. Tom Tancredo showed no depth outside of immigration. The two embarrassments were Tommy Thompson and Ron Paul. Thompson’s takeaway was that he doesn’t oppose firing people for being gay, while Ron Paul’s was his insistence on answering every question with a discourse on the original intent of the Constitution. Both of them should understand their roles as the GOP’s Crazy Uncle Bobs and return to the attic forthwith.

If Fred Thompson can manage to skip the rest of these debates until the primaries, he might become the consensus Republican nominee. He may have actually won this debate simply by forcing the others to endure this one without him.

I stand by my earlier post on how unhelpful these events with so much time left to go before the election.

Targeting Medicaid Access

Robert Pear writes in today's New York Times that "Citizens Who Lack Papers Lose Medicaid." His opening paragraph:

A new federal rule intended to keep illegal immigrants from receiving Medicaid has instead shut out tens of thousands of United States citizens who have had difficulty complying with requirements to show birth certificates and other documents proving their citizenship, state officials say.

I'm going to comment first on the policy and then on the reporting. I think it is crazy that the rule was implemented without a provision that presumed that all children were citizens until a fairly long window elapsed during which their parents or guardians could formally establish their status. Pre-natal care should always be included, for the same reasons. There's no reason why the rule has to have the sort of impact during its phase-in period that Pear's subsequent report documents. Say what you like about illegal immigration, Medicaid, or poverty--none of them are the fault of these kids.

Now go back to how Pear wrote that sentence. I don't think his reporting justifies the use of the word "instead" in that sentence. To do so requires him to show that the policy is not making illegal immigrants ineligible for Medicaid. He has not done that. Here are three excerpts from the article that come closest:

“The largest adverse effect of this policy has been on people who are American citizens,” said Kevin W. Concannon, director of the Department of Human Services in Iowa, where the number of Medicaid recipients dropped by 5,700 in the second half of 2006, to 92,880, after rising for five years. “We have not turned up many undocumented immigrants receiving Medicaid in Waterloo, Dubuque or anywhere else in Iowa,” Mr. Concannon said.

[...]

“We’ve seen an increase in the number of people who don’t qualify for Medicaid because they cannot produce proof of citizenship,” said Albert A. Zimmerman, a spokesman for the Florida Department of Children and Families. “Nearly all of these people are American citizens.”

[...]

Wisconsin keeps detailed records listing reasons for the denial or termination of benefits. “From August 2006 to February of this year, we terminated benefits for an average of 868 people a month for failure to document citizenship or identity,” said James D. Jones, the eligibility director of the Medicaid program in Wisconsin. “More than 600 of those actions were for failure to prove identity.” In the same period, Mr. Jones said, the state denied an average of 1,758 applications a month for failure to document citizenship or identity. In 1,100 of those cases, applicants did not provide acceptable proof of identity.

The last one simply shows the policy is having an effect. It does not identify whether the effect is the intended or (presumably) unintended effect. In the first two, claims are made that the effect is largest among the largest population of Medicaid recipients. The effect may even be disproportionately large among the citizen group. But there is no evidence that it is confined to that group. There is no information in the article about California or Texas or even the paper's home state of New York, where we would expect the largest populations of illegal immigrants to be applying.

The fact that a rule is having unintended consequences does not by itself mean that it is not also having its intended consequences.

Our Distracted Media

James Joyner at Outside the Beltway has a very thoughtful post, "The News Business is a Business," in which he writes:

Austin Cline laments the fact that the news media is giving an “undeservedly large amount of attention” to the death of Anna Nichole Smith and the ensuing legal wrangling and to trivial matters such as Britney Spears’ decision to shave her head. While our politics are virtually 180 degrees apart, we agree on the relative merits of these stories.

The bottom line, though, is that the business of journalism is business. That for-profit businesses lead with the news that they believe, correctly it turns out, that their audience is most interested in should hardly be surprising. That’s how they sell advertising, keep and expand their audience, and ensure their employees can feed their families and pay their mortgages. The fact that “corporations are now pretty much in control of the network news divisions” is nothing new. Further, General Electric and Time Warner are more able to absorb losses than would be a small group of private owners.

More importantly, these fluffy stories pay for the stuff Cline and I find interesting. There’s hardly a dearth of good reporting on matters of war, international affairs, and domestic public policy. Indeed, there’s more of it than most of us can keep up with.

I think that's a pretty reasonable analysis of what's going on, including the appeal to a tradeoff at the end that naturally resonates with an economist. But I think there is something more to it. Even if there is "no dearth of good reporting" (a point on which I do not agree), so-called news organizations are drowning it out with their pre-occupation with non-newsworthy events. We cannot find the signal amidst the noise.

The news media help set a national agenda in this country for topics of broad conversation. Being on that agenda increases the amount of discussion in the public. Being off the agenda decreases the amount of discussion. More discussion leads to more information being made public.

When I read this post at OTB, I found myself thinking back to the summer of 2001, when, with the benefit of hindsight, the news media might have been usefully employed in aggregating up the disparate pieces of information that led to 9/11. Instead, what were the big stories that summer? The ones I remember most were the mania associated with the TV show "Survivor" and, even more so, the disappearance of Chandra Levy. The question is not so much what these so-called news entities were showing, it's what they were not showing because they were showing this other stuff.

The preoccupation with Chandra Levy's disappearance that summer was so consuming for these so-called news organizations that some people have theorized that her disappearance must have been related to 9/11. Want to convince yourself? Do a Google search for "Chandra Levy." As of this writing, the top five hits are the entry in Wikipedia, two stories at CNN.com about her body being found, and then these two from conspiracy theorists.

There is another problem. The news business is a business, to be sure, but it is supposed to be a serious business. These sagas of missing or crazy people just don't rise to the level of seriousness required of a news organization. It is beneath them, and they should recognize it as such. And people notice this lack of seriousness--they begin to impart that lack of seriousness to the whole brand, even when something big happens and we really then do need a serious news organization. And we are all worse off for it.

Borgman on the Nonbinding Resolution

As usual, Jim Borgman at the Cincinnati Enquirer shows us that a picture really is worth a thousand words (or however many I wrote).