Economy Journalism

Budgets are Not Fixed “Once and For All.”

There is plenty to hate about this article and very little to recommend it. But the following line is just amazingly stupid:

Debt deal offers only small blessings for economy | Reuters.

About $1.5 trillion of the planned savings will be decided by a bipartisan congressional commission, leaving unanswered the question as to whether the United States has the political will to tame the country’s growing debt pile once and for all.

Budgets are living documents. Economies grow and shrink. There is no reason to think that we will ever deal with budgetary problems “once and for all.” In fact, the only reason we’ve been subjected to this whole pointless psychodrama is because Congress attempted to solve the problem in such final terms and has subsequently ignored its own edict 74 times.

Journalism Politics

Politico Discusses Skewed Polling About an Arbitrary Debt Ceiling

It must be hard to report on non-facts about arbitrary arguments in Washington, but that didn’t stop one Politico reporter from giving it the old college try. Still, the following story is riddled with silliness:

Debt ceiling story drives media numbers – Keach Hagey –

So far, the only clear winner in the debt ceiling negotiation story is the media.

Public interest in the story continues to climb, according to new data out Wednesday morning from the Pew Research Center for the People and the Press, with 38 percent of study respondents saying they followed the story very closely last week, up from 34 percent the previous week. The debt talks were the top story for both the public and the news media both weeks.

To start with, Pew’s own reporting on its weekly news poll says, “Debt Stalemate Top Story, But No Surge in Public Interest.” So while the story is obviously the top respondent choice, that may just as easily be because this is a slow time in news. More on that later…

Moreover, there is a small problem with the idea of “interest polls,” in that while they might indicate what people believe aught to be the most interesting story, they probably don’t indicated the story that is in fact most closely being watched. For example, economic news always ranks very high in these polls, but my own (admittedly non-scientific) research on what links get clicked tells a different story. I don’t see any reason to think people’s interest in economic news is not very strong at all. And after all, they don’t call economics “The Dismal Science” for no reason at all.

It is equally silly to say that, “A Wall Street Journal/NBC News poll last week found similarly strong engagement on the issue, with 55 percent of respondent saying that failing to raise the debt ceiling would be a serious problem.” First, because people regard the outcome as a serious issue does in no way indicate that they’re paying closer attention to it. Nor does it suggest that the media is “winning” the issue by getting more eyeballs and advertisement revenue.

And in the silliest of silly bits, the article goes on to describe how often Fox and MSNBC discussed the debt debate, then says this is the reason for the concurrent rise in viewership over the weekend. I guess this reporter just plum forgot about the Oslo bombings on Friday?

Economy Politics

National Poll Shows: Gallup Prefers Spending Cuts

So apparently today is Dump on Gallup day. I’m ok with that.

Gallup’s poll data makes the point quite clearly that Americans prefer the idea of shared sacrifice – one third of respondents preferring a combination of tax increases along with spending cuts – to a scheme of simply one or the other. But because the other two options are lopsidedly in favour of spending cuts, they lead with the following headline:

On Deficit, Americans Prefer Spending Cuts; Open to Tax Hikes.

Ah! We’re just “open” to tax hikes? Because when asked, we are predictably disinclined to pay more in taxes? This is an egregious reinterpretation of the data their own polls show.


Gov’t Shutdown: Its Not Even Ideology, Its Just Politics

With respect to Senator Reid, he is not correct when he says, “The only thing holding up the agreement is ideology.” Ideology would have had the Republicans insisting on more budget cuts or would have had them demanding anti-abortion riders. But not both. And certainly not one after the next, just as agreements appear to be on the table. The pattern is clearly one of drawing lines in the sand arbitrarily, just to prevent a deal.

The Republicans – or perhaps certain Republicans who hold sway right now – must clearly believe that they can make a government shut down work for them politically. Otherwise, we’d have had a deal by now. Either they’re fools or they’re gamblers. Or their geniuses, I suppose that’s still possible. They are not negotiators.

Reid: Looks Like We’re Headed For A Government Shutdown | TPMDC.


Have You Ever Heard of Me Neither.

Nathan Yau of @flowingdata writes about the end of in crisis: the open data movement is bigger than just one site | Nathan Yau | News |

Here’s the part that blew me away: there is such a thing as! Never knew it was there, but according to the article, it took $4 million a year just to run a website I never knew existed.

Now I grant you: I’m not in the data business in the sense of being any kind of researcher. But at the same time, I’ve done many searches looking for statistical data including median income levels, employment by state, by occupation and others. And in all that time, I’ve run across lots of useful information from the Bureau of Labor Statistics and, but never even came up with a single Google search result from Not one that stood out, anyway.

Open government is good. But its only good to the extent that its effective. Making each department responsible for reporting its own numbers seems like a wiser course of action. And already demonstrably more effective.


Better to Cut Them Than Mess With Benefits

I had a litte fun with the silliness of this poll overall: what is the purpose of asking Americans if they are in favour of negative things without a relative choice to make? Taxes and service cuts do not live in bubbles, they’re a part of the whole. But I’ve gone over that one to death.

Americans’ Message to States: Cut, Don’t Tax and Borrow.

What is interesting in the poll is the reaction to the question of cutting state workers’ benefits, an idea which is roundly rejected by a solid eleven-point majority. It seems like the situation in Wisconsin, New Jersey and elsewhere has stiffened Americans’ resolve on that count, which is nice to see.


Space: Maybe Not, Indeed

Christian Science Monitor has an article up on their online edition featuring the top nine priorities for planetary exploration as expressed by the National Research Council. Perhaps the National Research Council should have cross-checked with the bean counters at NASA before they went to press with this info, as the top priority of a joint EU/US mission to Mars is already in jeopardy.

Europa or bust? Maybe not. Top 9 priorities for planetary research missions – Mars Astrobiology Explorer–Cacher: MAX-C –


Are We In a Crisis? Yes! But Let’s Not Do Anything About It

Once again, just watching the same poll data over and over again: we want to solve what we believe are budget problems, but we don’t want to actually take any of the steps that are being presented as options:

Two in Three in U.S. Say Their State is in a Budget Crisis.

There are a number of issues with the entire concept of this article. For example, two in three people in the US think their state is in a budget crisis. Well, how many of them were actually right? Of those polled, how many lived in states with actual budget crises and how many were not?

This strikes me as a quantitative question with a right or wrong answer. That two in three Americans see it the same way is probably telling in its own right: it seems like the Republican message is getting through, if not the appetite for their remedies. But there is a real baseline here to compare and contrast with, so why is that not included in the report?

The other problem is that, as is the typical blind-spot for polls, multiple choice questions leave us with only one predefined set of answers. Gallup to their credit chose the more common methods of budget cutting, but the choices were all budget cuts. And the problem with that is: we didn’t need to cut the budgets when we were making money in this country. Nowhere in there is the option to “put people back to work and raise tax revenue,” though this is in reality the only measure that works.

I’m not arguing that budgets can’t be cut, that bloat doesn’t happen, that success doesn’t hide a multitude of sin. I’m saying success hides a multitude of sin.


Governor Cuomo Declares State Budget Process a “Sham” has an op-ed penned by our new Governor, Andrew Cuomo, where he outlines the budget process as he now understands it:

It is dictated by hundreds of rates and formulas that are marbleized throughout New York State laws that govern different programs – formulas that have been built into the law over decades, without regard to fiscal realities, performance or accountability.

The formulas operate year after year, generating liabilities that when totaled define the state’s budget growth. The one thing the rates do well is increase year after year. These formulas (predominantly in education and Medicaid funding) are often inserted into the law by pressure from well-connected special interests and lobbyists. When a governor takes office, in many ways the die has already been cast.

He compares it, quite understandably if his analysis is correct, to the scams and schemes his job as Attorney General was meant to root out in other venues. He explains that the 10 billion dollar budget deficit that politicians and journalists alike have discussed – himself included – is basically a function of unreasonably high automatic increases in funding, not on actual numbers or any kind of needs assessment. In fact, if the budget were adjusted by inflation rather than the dictums of these arbitrary systems, the deficit would be a much more manageable 1 billion dollars. All of this is based on his analysis and reporting.

The other side of this that he does not discuss is: if the 13 percent increases are to fund education and Medicare, shouldn’t kids be getting chauffeured to school every day? 13 percent. According to one (admittedly randomly-picked) estimate, Rochester City Schools spend about $1600 per student per year. A 13 percent increase in spending would be about a $2000 pick-up in a single year. Somehow, that doesn’t smell quite right.

I have no idea how accurate the Governor’s numbers are. And I have no way of finding out, either. But if he’s even half-right, where the hell is all that money going?


Obama’s Student Loan Budget Plan

Following on from my previous post about the Student Loan Corporation email I got this morning, it looks like the plan President Obama is proposing is basically to eliminate a subsidy system for private loan corporations that the government has been running for the last fifty years. This WaPo op-ed does a great job of laying out the history.

In short, the government has been insuring low-interest student loans for all this time by basically guaranteeing profits for private banks like Citi Corp who give out those loans. Its a classic Frankenstein Washington program where those who insist on free market rules and those who insist on government assistance get together and insure that neither happens. The Obama plan eliminates the cost of maintaining this facade by letting the Department of Education provide the loans through Treasury.

How much will tax payers save because of this new plan, if adopted? Estimates put that number between $40 and $100 billion annually.

Citi’s email is, typically, effusive with unsupported “facts” about how this will negatively impact both the government’s bottom line and consumers. The claim that this new plan will increase the federal deficit “substantially” is unsubstantiated as yet: there’s no concrete plan that I can find on how the loans will be doled out. Logically, if we can afford multi-trillion dollar bailouts to banks like Citi, I’m sure we can handle a few student loans. The word “substantial” is subjective and relative. Meanwhile as a matter of bookkeeping, since student loans can last for decades without defaulting, they are a relatively stable investment. At the risk of recalling the Subprime problem, student loans can be handled as assets, not debts.

Their claim that this is an anti-choice plan presupposes that those of us who go to college are really in control of where we get loans from. In reality, the student loan game is a rigged one, just like health care. The word “choice” is a double entendre: it sounds like the choice is yours, but the choice is really made by corporations and large institutions – colleges or hospitals, depending on the example.

Citi lists a number of advantages of student loans that it claims are the result of competition, such as default prevention services, education and web access. It is debatable whether web access is an advantage or an inevitability, but default protection and education will surely both continue under the new plan. The problem with this entire line of argument, though, is that if there’s no risk then there’s no real competition. The current system is not a free market system and so the entire argument breaks down right there.


Don’t We Write Budgets Every Year? Simple Economics

For all that Republicans keep pointing to budget projections into the next decade, it perhaps bears mentioning that we write federal budgets once a year. Why would we care about a ten year projection on a budget reflecting a temporary problems? I’m no economist, but that just seems. . . what’s the phrase? Oh, yeah. Fuckin’ stupid.


Statewide Emergency Wireless Network Killed

There was a plan between the State of New York and a subsidiary of Tyco Electronics to build a wireless network which could be used exclusively by emergency crews (fire, police, ambulence, etc) in the event of an emergency. Choosing a Tyco company seems bad enough to start with, but it now appears that this deal has been killed due to numerous delinquencies on the part of the contractor.

But the article notes also that this move was also in response to the deficit the Governor has seen fit to deal with right now. I still think the timing of our sudden interest in budget cuts and spending reduction is a bit odd, but this seems like the kind of thing we might want to farm out to someone else, not kill outright.