Tuesday, July 12, 2011

The Role of the News

Opinions on the role of government in economic recovery differ.  This is a fact that is unavoidable, and one that is worth considering, however the equally unavoidable fact is that there is a right answer.  This is not a theological debate, this is not a disagreement over what constitutes virtue, this is a debate over how best to achieve a goal—the goal of economic recovery.  The bulk of the serious reporting I see however seems to miss this central point; rather than try to determine who here is right and who is wrong, they take the easy way out and avoid addressing the large body of evidence that there already is.

One example of this is David Brooks in his op-ed piece yesterday, where he argues among other things that "Some of us do not believe there is a magic lever. Deficit spending stimulates growth, but not by that much." This sounds like a balanced and moderate thing to say, and it gives him the tone of a reasonable centrist, however it has a major flaw:  It's not true. At least not according to the Congressional Budget Office, an organization charged by law not with the job of defending opinion, but with the job of producing careful research that is based on measurable and conformable evidence.  In their latest report (a surprisingly accessible read) they say:
[The] CBO estimates that ARRA’s policies had the following effects in the first quarter of calendar year 2011: 
They raised real (inflation-adjusted) gross domestic product (GDP) by between 1.1 percent and 3.1 percent, 
Lowered the unemployment rate by between 0.6 percentage points and 1.8 percentage points, 
Increased the number of people employed by between1.2 million and 3.3 million
Which is to say that from the beginning of 2010 through the end of 2011, there have been and continue to be roughly 2 million Americans who have jobs, and wouldn't if not for the stimulus package.  Additionally, it says that the GDP for those same years is between 1% and 3% higher than it would have been otherwise.  Since our GDP is roughly $15 trillion, some quick math gives us an annual GDP boost of (2% of 15 trillion) $300 billion, which is about the same as the stimulus package spent last year. It goes on to say in the tables that tax cuts for corporations are the least effective, and direct government spending the most effective.

As a nation and as a world we face a serious decision: do we balance our budgets or do we invest to get out of our continued economic malaise?  To say that the fates of millions of ordinary people are attached to this decision is not hyperbole, and both arguments are clearly persuasive and deserve to be heard and evaluated.  The problem is that while we hear both arguments frequently, we do not see a serious evaluation of them.  We see in the pages of the Times and the Post discussions of the sides' goals and plans, but what we do not see is an evaluation of their methods and logic.  For a newspaper to discuss, as Brooks does here, an issue of such consequence without making a serious attempt to illuminate which side is backed by the facts is to abdicate its role as the eyes and ears of the people. Searching for balance should not come at the cost of searching for truth, but that is exactly what has happened—somewhere along the way the news forgot that their role was not only to repeat politicians claims, but also to evaluate them.

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