Friday, March 14, 2008
Lies about "the George W. Bush Recession™ of 2008" are well underway
The headline reads: "Most Economists Say Recession Has Arrived as Outlook Darkens." The breathless, unequivocal text at the beginning of the article is unrelentingly foreboding in tone:
The U.S. has finally slid into recession, according to the majority of economists in the latest Wall Street Journal economic-forecasting survey, a view that was reinforced by new data showing a sharp drop in retail sales last month.
"The evidence is now beyond a reasonable doubt," said Scott Anderson of Wells Fargo & Co., who was among the 71% of 51 respondents to say that the economy is now in a recession.
These people are lying to you.
The word "recession" has a very, very specific meaning in classical economics. In fact, this same article admits that (emphasis mine), just before it starts to lie: "Although the classic definition of recession is two consecutive quarters of declines in the gross domestic product ...." If these people were being candid, they would complete this sentence by saying, "... but in this article we're using that same word, 'recession,' to mean something different, something poorly defined, something vague, and something ominous, all because it suits our purposes better and we don't mind being liars."
Here's the absolutely, positively, official and unequivocal latest information on the United States gross domestic product from the United States Department of Commerce, in an official press release dated February 28, 2008, a mere two weeks ago:
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 0.6 percent in the fourth quarter of 2007, according to preliminary estimates released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.9 percent.
There is your proof. It is definitive, and it is simple, and because it is definitional in nature, it is not subject to doubt, reasonable or otherwise. Based on the most current information now available, the United States is not now in a recession. At worst, if it turns out that there is a decrease in GDP for the first quarter of 2008 (which has not yet ended, much less been definitively measured), and it then turns out that there is also a decrease in GDP for the second quarter of 2008 (which has not yet even begun), then we will be in a recession.
Short of that, you can talk about "down-turns," or you can talk about "not meeting expectations." But if you use the word "recession" to mean something other than two consecutive quarters of declines in the gross national product, you're misusing that word, and you're a liar.
So why lie? To what people and in what contexts does the word "recession" have significance? Why, in other words, could these economists and their publicists want to mislead you about this word? Why do they mislead you into believing that "recessions" are determined by "economic-forecasting surveys" instead of GDP data?
That's also dirt simple: The word "recession" has come to have cosmic significance to voters in election season. The people who are lying to about whether we're already "in a recession" are trying to ensure that a Democrat is elected in November.
To do that, they require that there be not just "the Recession of 2008," but "the George W. Bush™ Recession of 2008." To do that, they require that you look not at GDP, which is relatively objective and definite, but at surveys and poll results that they can spin into whatever they like. "Hey, 71% of 51 respondents! Wow, that's beyond a reasonable doubt!" they tell you. That sounds plausible, if you don't know any better.
They're relying on the fact that many voters don't know any better.
And if you doubt that, you're just the kind of sucker they've been looking for, and they've got you fooled. But your intelligence is definitely in a recession.
UPDATE (Sat Mar 15 @ 1:40pm): Thanks for the many interesting comments so far, and to DRJ for the link from Patterico's, where there are also many interesting comments. Let me add something to my original thinking, though, for those of you who are having a hard time deciding whether these economists are merely being loose in their terminology, or are actively lying.
We know beyond any doubt whatsoever that the quarterly GDP for the most recent quarter on which we have that information, the fourth quarter of 2007, showed a growth in GDP. It was a small growth, but it was in fact a grown that surprised, and contradicted the previous predictions of, many of these exact same economists, who during the fourth quarter of 2007 were already predicting that the mortgage crunch in particular would be seen to have put us into a recession beginning in that quarter. So:
(a) If economists or those writing about the economy want to make an unequivocally truthful statement, one that involves no guesswork — and thereby to avoid deception through significant and material omissions of crucial context — shouldn't they point out that as of year-end 2007, the United States economy was, by definition, definitely not in a recession?
(b) Wouldn't it also be more honest — I would argue, minimally necessary to be honest at all — to further admit that any statements they make about whether we're in a recession now are based on guesswork and predictions, because (again by definition) whether we're in a recession now cannot be determined until we at least have the second quarter 2008 GDP numbers? Finally:
(c) If you agree with me that facts (a) and (b) would be useful to include in a fair discussion of our current economy and our prospects, can you possibly deny that omitting those facts favors those who are highly motivated — for reasons of partisan politics, i.e., to defeat Republican office-holders and candidates — to portray the economy in very bleak terms by using that second-bleakest (after "depression") economic word?
Other weblog posts, if any, whose authors have linked to Lies about "the George W. Bush Recession™ of 2008" are well underway and sent a trackback ping are listed here:
» Red Flag: Most X Say Y from Pursuing Holiness
Tracked on Mar 15, 2008 2:45:54 PM
(1) Gregory Koster made the following comment | Mar 14, 2008 7:41:11 PM | Permalink
Dear Mr. Dyer: Jack Nelson, the Los Angeles TIMES investigative reporter, was fond of saying in the 1970s, "You can't harm a newspaperman's reputation by calling him a drunk." Today's version would be, "You can't hurt journalists's reps by calling them liars." You know this. Remember when you called Dahlia Lithwick a liar for saying John Roberts applauded the outcome of the French Fry case? (It was on 21 July 2005 for those who are interested.) That's strong stuff. What was her response? "Haha, it was just satire." She didn't care. Why should she? When you reach a certain altitude in the press, lies won't hurt you, not least when they are the lies the editors are pushing on people. Think Jacob Weisberg at SLATE ever talked your post over with Dahlia? Hell no, she was doing what he wanted her to, and who cares about truth anyway, the Frog philosophers have proved it's all a racket for rich white guys to control the rest of us...
So too, with this article, notable mostly because it is from the WALL STREET JOURNAL, not the suspects that would leap to most readers's minds. No one participating in the production of this article will lose any sleep worrying about being wrong or any consequences.
That said, the odds that they will be right in, say, August, are daunting for the GOP. Gold at a thousand bucks an ounce is a dismaying signal. So too, the new speculative bubble, crude oil prices.
It is far better to be accurate (and even more to TRY to be.) But the press has long since given this up in favor of short term influence. Think the New York TIMES editors, on the level of Bill Keller, are more interested in getting a Democrat in the White House this fall, or the TIMES"s fading reputation? The question answers itself. There will be a smash some day, but the top editors figure that said smash will not come until they've gotten theirs. Eat drink and be merry and don't forget to give the works to conservatives. Let the kids worry about tomorrow.
This is 200 proof cynicism, laced with strychnine, but it will predict the behavior of any 200 Washington based journalists far better than an assumption of honesty and correcting mistakes.
Do you know who Martin Feldstein is? He was an advisor to President Reagan. He admits that we are in a recession.
So, how would you define a situation where the Feds have to bail out Bear Stearns and the Federal Reserve swaps (for a supposed 28 days) 200 billion in cash from taxpayers for 200 billion in debt(like the debt is really worth that much Ha!Ha!)from major banks to save their asses--utilizing its new "tool", the Term Auction Facility. What do you make of the fact that Greenspan is out making consulting fees by giving advice to Gulf States to run from the dollar?
The Fed has, essentially, nationalized some banks by becoming their major creditor. The dollar is in the crapper. The Fed's "stimulus" plans jack up the stock market for a day and then it falls. The Plunge Protection Team efforts have failed miserably.
My god. Are you saying the economy is hunky dory? The government just raided all our savings accounts to save the banks--are you okay with that? Where the heck do you think they are going to get that 200 billion dollars that they are lending these failing banks for the supposed 28 days? They are going to create it and further devalue the currency--all to save a bunch of banks that are not necessarily owned and run by Republicans, by the way.
Are you a Keynesian? Are you telling me that you believe the GOVERNMENT's claims about GDP? Do you believe the banks' figures regarding the amounts that they are going to have to write down?
This isn't all on Bush. Greenspan is a major culprit, and he predates Bush. This is a systemic failure.
The economy sure seemed a lot better before the Donks controlled Congress.
It is, to be sure, tendentious to claim that we are probably in a recession, but it is not a lie to do so -- even if we are to accept your position that there is only one definition of "recession."
By this most common definition, however, the claim is a prediction, and thus one which may be incorrect. It is also, to be sure, tendentious to imply that such predictions are facts, or to write of them without explaining exactly what one means by them.
Because if the specific truth is that a majority of economists predict that first quarter growth is negative, we might have some skepticism as to their ability to say what will happen through an uncompleted quarter, and if this majority of economists at the same time are predicting that second quarter growth will be negative, we readers are even more likely to discount the significance of this prediction.
To be sure, if the specific truth is that some or all of the economists mean something else by the word "recession," we should be informed of this. But it is not actually a lie for the newspaper to print what the economists say, if it is the economists themselves who have agreed that the word "recession" applies to our situation.
As it happens, I agree that your definition of "recession" is the most objective and useful and common. But there are others who hold that a recession is defined (after the fact) by the consensus of the National Bureau of Economic Research, which usually, but not always, follows the "two quarters" rule. See http://www.nber.org/cycles/recessions.html
Recession or no, it is also tendentious to pin the downturn on the President alone.
In the first place, business cycles are not generally due to governmental action. And in the second place, the President is not the only relevant governmental factor.
Perhaps the Democratic Congress is to blame for not indefinitely extending the Bush tax cuts -- i.e., for keeping in place large tax increases which make investment less attractive. That said, if Bush had put his 2004-5 political capital to work extending those tax cuts -- instead of on a fruitless attempt to reform Social Security -- this wouldn't be a factor either. Still, it is dishonest for his opponents to pin partisan blame on him for their actions.
The Fed is also at least as responsible for business cycles as is the President. But the President re-appointed Greenspan and appointed the current Fed President. Not that the Democratic leadership had anything bad to say about the Fed's loose money policies which caused the housing bubble -- or opposed the extension of credit to people with weak credit -- and thus could legitimately make hay out of these policies.
(6) tyree made the following comment | Mar 15, 2008 8:47:51 AM | Permalink
Thanks for that, Beldar. For decades now we have seen words twisted beyond their meanings for political aims. You would think that real, authentic journalists would make sure that when politicians speak the words they use are properly used.
Martin Feldstein may have been an adviser to President Reagan as Jerri Lynn Ward wrote, but he obviously used the wrong word to describe our current economic condition. Some accuracy in the media would be a good idea. They describe illegal immigration as "immigration" all the time, and that is not technically a lie, either. It does make debate of another thorny political issue much more difficult.
(7) tyree made the following comment | Mar 15, 2008 8:50:48 AM | Permalink
I think we should listen more closely to the warriors when they talk about war, to the economists when they talk about the economy, to the lawyers when they talk about law and to the artists when they talk about.... art.
Harmon Ward 3/2008
(8) sammy small made the following comment | Mar 15, 2008 10:10:41 AM | Permalink
The trend in the past few years is a modern day realization of "Newspeak". It doesn't matter anymore what the real definition is, libs just redefine it and are first to publish it, and there you have it. Don't try to revert to the real definition. Its too late.
(9) stan made the following comment | Mar 15, 2008 11:57:46 AM | Permalink
The news side of the WSJ is one of the most liberal of the MSM news sources. We'll see more of this until the election from all of the MSM.
Just as we heard about the "worst economy in 50 years", "3 million homeless", "lies about WMD", and "swiftboating".
Always keep in mind that these are the same folks who gave us Rather's fake memos, planted bombs in pickup trucks to demonstrate safety problems, and regularly offer fake photos as news.
Lying is their business.
I agree that you can't get around lying by redefining common terms, but isn't it a bit premature to accuse anyone of lying? For all you or I know, the first two quarters of 2008 may produce negative growth. If they do (and we won't know this for a while), it will mean that whoever says now that we are in a recession is not only not lying, but in fact right.
(11) Mike S made the following comment | Mar 15, 2008 1:31:08 PM | Permalink
Doesn't a recession start when we have had 2 quarters of negative growth, rather than going back to the beginning of that 2 quarters and redefing that period as being in a recession?
Where were the stories in the summer of 2000 speculating that we were already in a recession?
Thanks for the many excellent comments. Working backwards to respond to some of them:
Xrlq: They aren't saying, "We predict that when we get the data for both the first and second quarter of 2008, they will both show a drop in GDP, meaning that we will eventually be seen to have entered a recession starting in the first quarter of 2008." That would obviously be a prediction, one entirely dependent not just on past but future events. And it would therefore be a very, very different statement than the flat assertion that "We are in a recession." A statement which made clear that it was only a prediction, and one dependent on future events, would clue the listener/reader/voter to the fact that the economists are guessing -- yes, that's their field of expertise, and their guesses may or may not be better than yours or mine, but they're still only guesses, not statements of existing, normative fact. I don't back away from labeling what they're saying now as a "lie," that is, a deliberately told untruth.
Stan: The WSJ news operation is indeed liberal. The telling of this lie goes far beyond the reach of one newspaper, though. I would guess (note: guess) that a 51/71 ratio might be roughly correct in describing the number of economists willing to participate in it. (It may be a lower number, however: There's no certainty that their survey was representative, nor that the respondents knew their responses would be used to support a conclusion that is contrary to the definition of the word "recession" in classical economics.)
Mr. Small: Most of my ranting is futile, but it keeps me from exploding.
Tyree, you're right that "illegal immigration" would more accurately be called "illegal infiltration."
Mr. Pitelli: Your points are well taken, as is your link. The NBER is indeed responsible for some of the erosion of the definition of the word "recession," just as there are and have always been heresies and heretics even within the Catholic Church and other faiths. While it seems to have left open the chance that it may come to do so in the future, speaking retrospectively, the NBER has not now, however, declared the United States to currently be in a recession. And even if it did, that would not make it correct. The word means what it means.
Ms. Ward: I said nothing in my post to suggest that we're presently in the middle of a robust expansion. I don't know, overall, if we are or not, which is to say, I don't have a confident guess as to what the quarterly GDP numbers for the first quarter of 2008 will turn out to be. I am, however, intensely skeptical of anecdotal reports like those trumpeted in press accounts or (worse and even more common) Democratic presidential candidate speeches, and I do believe that those are often offered recklessly, without any real interest in whether they are representative of the genuine national net picture, precisely because the person or organization presenting them has a political agenda that can only be furthered by offering a negative outlook when Republicans are in office. Finally, you ask if I "believe" the government. Yes, I believe the compilation of GDP is done to the best of the abilities of the people who do that, and that it is done as consistently as they're able to do it, and that they are considerably more free from political bias than political candidates, news media, and free-lance or other institutional economists. But regardless of whether I believe in their efforts, again, by definition, it is their statement of GDP that unequivocally determines whether we have been, or weren't, in a "recession" at any given time. If you want to describe our economic situation without reference to their work, and you're honest about it, you can't use that word.
Mr. Koster: I share much of your cynicism and thank you for your thoughtful comment, too.
What amazes me is how the US economy has become synchronized to the election cycle, and how the economic fortunes depend entirely on what the Democrat party needs.
It's a miracle, I tell you.
I just got a Robo-call from Americans United for Change that flatly stated that we are now in a recession due to Bush's failed policies and asked me to contact my Dem representative at her DC office. They even gave me the number. Of course, their timing is off, Congress just went home on a two week spring break.
I agree with your underlying point: that most of the press is biased against Republicans, that one way this bias is frequently manifested is in how upbeat or downbeat its view of the economy is, and that we are seeing such bias at work today.
But there is also nothing sacred about your preferred definition of the word "recession." Although I agree that an objective definition (e.g., 2Q GDP down) is preferable to the diktat of some official economists, agreement that a "word means what it means" does not mean agreement that it necessarily means what you want it to mean. The word "recession" as an economic term dates only to 1929, was not so specifically defined then, and unlike France this country has no official body defining the language for us. Given that either of the more common definitions can only be definitively fulfilled retrospectively, there is nothing wrong with polling economists about their opinion/prediction of the same, provided that the reporting on this is clear and unbiased. While the WSJ article may have its biases, it leads with a pretty clear description of how it is making its claim.
Mr. Pittelli: It's not my "preferred definition." It's what the word is defined to mean in the discipline of economics.
Using that definition consistently allows everyone to make meaningful comparisons of one period to another. When the word instead is debased to have no precise meaning, those comparisons are also debased. It permits people to be misled into thinking that based on objective data already in hand, our current economic situation is comparable to others in which there have been two consecutive quarters of declines in GDP. And that's counter-factual.
Finally, you say the WSJ "leads with a pretty clear description of how it is making its claim." But it's not until midway through the article which I suspect was "below the fold" in the print version that it admits it's using a corrupted version of the word "recession." Nor does the article say anywhere that the most recent quarterly GDP statistic still showed a growing GDP. This article was misleading, and I remain convinced it was designed to mislead.
I agree that the article should have included the fact that 4thQ GDP was slightly positive. But it did cover the two definitions of recession we've discussed, including their claims to authority ("classic definition" and "nonpartisan... official arbiter").
Further, both the headline:
"Most Economists Say Recession Has Arrived as Outlook Darkens"
And the first sentence of the article:
"The U.S. has finally slid into recession, according to the majority of economists in the latest Wall Street Journal economic-forecasting survey, a view that was reinforced by new data showing a sharp drop in retail sales last month."
are clear about why the newspaper is claiming we are probably in a recession (I have bolded qualifiers). And regularly polling a number of economists is not some insane wacky way of making something up. So to claim the article is a "lie" remains an overstatement.
Xrlq: They aren't saying, "We predict that when we get the data for both the first and second quarter of 2008, they will both show a drop in GDP, meaning that we will eventually be seen to have entered a recession starting in the first quarter of 2008."
Actually, that's damned closed to what they did say, only with two wrinkles: (1) some semantic quibbling over whether or not there can be a one-quarter recession, and (2) depending on the answer to #1, a near miss on "most." According to the article, 29 out of 55 economists polled expect negative growth this quarter, while "only" 25 expect negative growth for both the current quarter and the next. So 25 out of 55 expect a recession under the classic definition, and four others quibble over what the precise definition of a "recession" should be, and all this is supposed to translate into a lie becuase they didn't also go into detail about the fact that we didn't have a recession last year?!
A statement which made clear that it was only a prediction, and one dependent on future events, would clue the listener/reader/voter to the fact that the economists are guessing -- yes, that's their field of expertise, and their guesses may or may not be better than yours or mine, but they're still only guesses, not statements of existing, normative fact. I don't back away from labeling what they're saying now as a "lie," that is, a deliberately told untruth.
Only in the sense that every pronouncement based in part on conjecture (read: nearly everything any economist has ever said) is a "lie" unless prefaced with "I think" or "I guess." In this case, economists were polled as to whether they think we are in a recession or not. Most think we are. A few think we're not. Alan Greenspan thinks we're in for something rivaling the depression. All of these guys are guessing, and some of them must be wrong. That doesn't make any of them liars, and it certainly doesn't make WSJ liars for reporting their non-lies.
Lastly, in response to your update:
(a) Not only no, but hell no. Nothing in the article would lead any reasonable reader to conclude that we were in a recession last year. In fact, even for those too lazy to read down to the part about predictions for the current and coming quarters, the paper's observation that most economists believe we have "finally" slid into recession this year strongly hints that we're talking about the state of the economy in 2008, not 2007.
(b) Yes, and they did. The very first sentence of the article refers to the study as an "economic forecasting" survey, and some form of the word "forecast" appears four more times in the article. Between those, two "outlooks" and eleven "expects," I am frankly at a loss as to how you can interpret this article as failing to clarify that the question involves guesswork and predictions.
(c) Oh please. Countless economists used the R-word in 2000 to predict a recession that would not begin until early 2001, and the press reported it. Yes, the Clintonistas and Gorons whined about the media and the incoming Bush adminstration supposedly trying to "talk down" the economy for political advatage, but more importanly, yes, it was whining, and yes, it's just as bad for our side to do it now. Especially when everyone's favorite liar, Alan Greenspan, is now saying the current crisis may be far worse than a typical recession.
Xrlq & Mr. Pittelli, valued readers and commenters: if only the story itself had been written by either of you, then all of its emphases would have matched the ones you've tried to give it here. This story took a word that has a specific meaning and claimed that that word applies to our present economic condition — "beyond a reasonable doubt," it insisted. I stand by my description: In details, and certainly in gist, it was a lie. On this, it appears that we will have to agree to disagree.
(20) Nick made the following comment | Apr 13, 2008 10:00:39 AM | Permalink
Maybe it's horribly uncouth for anyone to suggest we're in a recession if their use of the word "recession" fails to satisfy the definition in "classical economics."
What, then, are we to call the situation when extremely hard-working, college-educated Americans can't find jobs because businesses are closing and employers can't afford to hire?
Tell me. Please. Tell me what the acceptable term is in this extremely real and current situation so that I may use it without reprisal.
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