They All End in "Illion"

Dean Baker notes Fred Thompson misestimating by about $62 trillion . Naturally, the Wall Street Journal reporter who had the quote doesn't notice the error. Felix Salmon wonders "Why is it that Saturday Night Live applies more critical judgment to Fred Thompson's statements than the Wall Street Journal does?"

I've come, eventually, after many conversations, to believe the daily newspaper political reporters who swear to me that they're doing the best they can. But if that's right, the whole enterprise clearly needs to be radically rethought. Most people probably don't know how much the infinite horizon cost projection for Medicare Part D is, and they probably know they don't know it. But if they read this in the newspaper, they come to have beliefs on the subject:

"I know this probably isn't a real popular thing to say, but we couldn't afford this prescription-drug bill," Mr. Thompson said last week on a swing through Iowa, home of Republican Sen. Charles Grassley, who helped push the program through Congress. "We basically put a $72 trillion commitment on top of an already-broken entitlement system. Not a responsible thing to do."

Now you're walking around thinking a $72 trillion commitment was made. You read it in the newspaper, after all. Except it's wrong! But you shouldn't be un-learning things when you read the paper.

Comments

"I've come, eventually, after many conversations, to believe the daily newspaper political reporters who swear to me that they're doing the best they can."

Why do you believe this? I don't mean it rhetorically. Have you come to the conclusion that they are too stupid to do better? Or is it that they are laboring under restrictions placed by their editors and publishers that prevent them from telling the truth?

I understand that these reporters are congenial people who went to the same schools as you and your friends and that it's nice to hang out with them. But Matt, it's an unpleasant fact that nice and friendly people can do truly bad things in their work life.

Posted by Bloix | October 9, 2007 6:25 PM

Bloix, I think Matt would probably go for the first ("too stupid"), with a helping serving of universally accepted journalistic conventions that help spread truthiness. Maybe he'd add the impossibility of becoming subject matter experts on a wide enough range of topics at the average daily, although given how bad most sportswriters are about writing about baseball, I'm not sure that's an excuse.

Posted by Steve | October 9, 2007 7:21 PM

funny, all of us early adapters on this post are struck by the same comment: what exactly is matthew telling us he's convinced of here?

it sounds to me like he things the problems are structural, not individual (or, perhaps more carefully put, the problems start as structural ones and then they become individual ones)....

Posted by howard | October 9, 2007 7:36 PM

Contrary to Matt, I don't understand why it would be too difficult for a reporter to fact-check a statement like that. A reporter need not have the infinite horizon cost projection for Medicare Part D in his or her head, but the reporter ought not to be covering a major presidential campaign speach on health care policy without at least knowing how to find out. And of course, if you know anything at all about the matter, you can see that's an outlandish figure Thompson gave, not to be taken seriously.

After all, that's their darn job, isn't it? To report?

Posted by rea | October 9, 2007 8:07 PM

pathetic

Posted by Mark Gaughan | October 9, 2007 8:20 PM

I also want to know why MY's being an apologist here. I'm pretty sure reporters could spend 15 minutes calling Dean Baker to figure out if $72 trillion is a reasonable number. I'll go even further: if they're reporting on the economy then they can take an hour to learn a little bit about the economy. There's no way the "structure" prevents them from knowing that we have an ~$11 trillion/year economy. Pathetic is right.

Posted by eriks | October 9, 2007 10:28 PM

A trillion here, a trillion there, pretty soon you are talking about real money.

Posted by Steve Sailer | October 9, 2007 10:47 PM

Has congress ever passed a healthcare program that didn't eventually cost 5 or 10x what its designer's originally estimated?

Posted by Sandy | October 10, 2007 9:47 AM

Sandy an example would be nice. Maybe one with actual numbers attached.
________

Which is the problem. The Economic Right deliberately set out in the late seventies to sell a particular series of messages all revolving around the central narrative "Big government is not the solution, big government is the problem". Some of the revolving messages are "Social Security is going bankrupt" (Thompson tried that one out) and "Entitlements are sustainable".

On the whole they were incredibly successful, to the point that they captured the DLC and most of the MSM. Everyone "knows" things about Social Security in much the same way they everyone "knew" that Saddam had WMD. Only deeply unserious people would challenge either. Because surely someone must have done the homework.

Well someone did. Any number of people around Cato, people who were in fact convinced that these programs had problems long term, set out to exaggerate the scale of those problems. They were not particularly secretive about this. After failing to kill Social Security in 1983-84 in their words

In order to consider the full range of reform proposals, the Cato Institute invited many of the nation’s leading experts on Social Security to a two-day conference in Washington, D.C., June 6 and 7, 1983. The edited papers from that conference, along with A. Haeworth Robertson’s congressional testimony on the National Commission’s
recommendations for Social Security reform, constitute this issue of the Cato Journal. The papers cover four main areas: the political economy of the Social Security system; options for reforming the system; the economic effects of Social Security; and strategy for dealing with the implementation problems associated with denationalizing OASDI. The following conclusions are noteworthy.

Along with a number of papers examining the mechanics of the IRA based system they proposed, they laid out an action plan.
Social Security Reform: Achieving a "Leninist" Strategy

Although they put "Leninist" in scare quotes they were fundamentally not being ironic. Instead they set out a plan to subvert public discourse which has three main components 1) reassure those in or nearing retirement, 2) rally the business community, and 3) convince the young that Social Security would simply not be there.

Sound familiar? It should, these three points are at the core of every Bush speech on this topic and most Op-Eds. The Economic Right maintained and largely maintain enormous levels of message discipline on this, even as the actual numbers started slipping away from them in the mid-nineties.

They used the same tactics under which they managed to demonize the term 'liberal' and practically banish the word 'socialism' from political discourse altogether. So while you might not like the substance of what they do, you have to admit that they perform their message strategies very well indeed.

My contention is that Social Security solvency can be a very powerful political weapon and much of that power resides in the fact that relatively few people see it coming. The main danger is that some of the people who really do understand the numbers was to kill the programs anyway, that is little of this revolves around solvency and retirement security, it is all about ideology and rolling back the New Deal.

As an example you can look to the 'Non-Partisan LMS plan currently being pushed. In the face of an immediate payroll gap of 1.95%, the plan proposes tax increases totalling 2.5% of payroll, and benefit cuts equalling 2.7% of payoll and all coming with no benefit to the retiree. How can they possibly expect to sell a plan that proposes throwing the equivalent of 5.2% of payroll at a 1.95% problem and gives a generally crappier result? Well the answer is 27 years of diligent sales work under the rubric "Entitlements Crisis".

On this I don't know if it is as much lazy reporting or editorial interference (though there is some of both working), instead all the 'serious' people have convinced themselves that someone must have done the homework on this. The idea that the people who did might have a different agenda never penetrating their minds.

Posted by Bruce Webb | October 10, 2007 12:55 PM

Of course the phrase in para 2's last line should be

"entitlements are unsustainable"

(I must be projecting, even Medicare is in better shape than the standard depiction would have it, Part A gained an extra year of solvency in the last report (2018 to 2019) which in turn has been a consistent trend since the 90's, depletion receding at more than a year per year, exactly the opposite of what the standard model would have you think, in the face of inaction this component is actually improving. Something you will not find reported in USA Today. Trust me on that point.)

Posted by Bruce Webb | October 10, 2007 1:01 PM

Matthew, you should consider a correction for this post. Thompson is wrong, but your correction is not reliably sourced, either. Table III.c23 of the 2007 Medicare Trustee report shows that the infinite-time horizon obligation for Part D is $22.1t. I assume that Baker is referencing the 75-year deficit from earlier Trustee reports, although it is hard to say.

Both are meaningless numbers when taken out of context like this. But the written record should be correct, at least technically. And when correcting the record, it is best to give your source to avoid spreading even more misinformation.

http://www.cms.hhs.gov/ReportsTrustFunds/downloads/tr2007.pdf

Posted by Victor | October 10, 2007 1:21 PM

" Maybe he'd add the impossibility of becoming subject matter experts on a wide enough range of topics at the average daily, although given how bad most sportswriters are about writing about baseball, I'm not sure that's an excuse."

Posted by Steve

Adding onto this, (a) Nexis (Nexus?) allows a reporter to quickly look up such things in newspapers and magazines, (b) Google allows this, (c) the US government maintains such information, and (d) It's the f*cking Wall Street Journal!. Their editorial page couldn't hold a truthful article without catching fire, but it's quite reasonable to hold reporters for a world-leading business journal to be able to perform high school math.

Posted by Barry | October 10, 2007 1:41 PM

Sorry Infinite Future is disnonest crap introduced in the 2003 Reports to allow dishonest scaremongering . Full Stop.

Posted by Bruce Webb | October 10, 2007 10:32 PM