There they go again! I thought the Front page lead story in the NYT today was a piece of crap. Mickey Kaus confirms it. The NY Post could not get away with this kind of reporting.
Gloomy Louie Gets It Wrong
It's "presumably" the NYT's latest embarrassment.
By Mickey Kaus
How to 'Presume' Your Way onto the NYT Front Page: The New York Times's Gloomy Louie Uchitelle will paint the economy in any color as long as it's black. A few points about today's dose of determined depression, "Red Ink in States is Beginning to Hurt Economic Recovery."
1) As my colleague Eric Umansky's "Today's Papers" notes, The second graf of Uchitelle's story contains this astonishing sentence:
In California alone, a tentative budget deal will presumably require the state to rid itself of at least $8 billion in current spending, with the cuts likely to fall most heavily on education and aid to the poor. [Emph. added]
Since when do NYT reporters writing the day's front-page lead story get away with saying "presumably" instead of finding out what's "actually"? Using speculative fudge-words like "presumably" is what we bloggers do! Heck, I can be a NYT reporter if that's all it takes. As Umansky notes, Uchitelle's "presumably" speculation is almost certainly wrong. The budget deal actually closes the multi-billion dollar gap mainly with borrowing, not spending cuts--and there's little reason to think next year's deficit will be handled differently.
2) The chart accompanying Uchitelle's story shows the states running surpluses during the boom and big deficits during the current slowdown. But wait a minute ...deficits stimulate the economy. So the Times's chart actually shows the states countercyclically doing what they are supposed to be doing --the opposite of the story Uchitelle's trying to tell. What "hurts the economic recovery" is when prospective deficits lead to spending cuts. Undoubtedly states are cutting back spending--though there's very little quantification of this in Uchitelle's piece, except for his admission that state spending is actually still growing by "barely 1 percent annually" (though it's growing less rapidly than before). To the extent states do cut spending, of course, those ominous-looking deficit bars on the Times' ominous-looking graph would be smaller, not bigger.
3) Unable to document the size of the spending cuts, Uchitelle shifts mid-piece to arguing that needed services are being trimmed--i.e. "Medicaid outlays are still rising in California but no longer enough to cover inflation"--which is an interesting point but not the point about harming the recovery that Uchitelle started off trying to make. But hey, it's bad news, so throw it in!
4) Other dire developments decried by Uchitelle include include a) "parallel" tax cuts in states that link their tax collections to now-lower federal taxes; b) delayed payments to pension savings plans, and c) optimistic forecasts that allow spending to continue. These are all bad things--but, again, they're all stimulative moves, contradicting Uchitelle's alleged thesis.
5) What will Uchitelle do when the economy recovers? He'll write a long, Timesian apology admitting and correcting his errors! Presumably.
Note to Bill Keller: If you can't do something about this guy, why take the job?
Update: The Sacramento Bee's Daniel Weintraub, who knows more about the California budget than I do, reams Uchitelle's embarrassingly lazy reporting . It turns out that "more than half of the reported spending reduction is actually a tax increase -- the $4 billion tripling of the car tax." This tax increase gets recorded as a spending cut for arcane California-specific reasons that Weintraub explains. ... The tax increase is a Keynesian drag on the economy, but it's still not what Uchitelle says it was. (If he had decried state tax increases as 'hurting the economy,' he might have sounded a bit ... well, Republican.) Other California "spending cuts" turn out to be simple bookkeeping gimmicks. Contrary to Uchitellle's story of $12 billion in already-made cuts--and $8 billion more in mythical "presumably" cuts--Weintraub thinks that when you add up all the gimmicks "it's possible that actual government outlays in California will rise, not fall, in the year ahead." 9
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