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July 25, 2014

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The Nonpartisan Charade
From The New Criterion January 31, 2012.
Prize Winners

With the sort of insight, depth and incisiveness we came to expect from the New York Times under his editorship, Bill Keller, now a columnist for the paper, recently applied his analytical powers to what he (or his headline writer) called "The Politics of Economics in the Age of Shouting." Becomingly, he began by describing the humility he feels at a wonderful institution like The New York Times, surrounded as he is by "a legion of Times reporters, editors and columnists who know more than I will ever know about business and economics. (Look! Right over there: a Nobel-prize-winning economist!)." He didn’t need to mention that this coyly alluded-to cynosure of the editorial pages was Professor Paul Krugman — presumably one of those "few economists respected for the integrity of their science and their patience with economic illiterates" to whom he had "reached out" in seeking to tutor himself in the dismal science.

Nor was this educational process without result. The good news he had to impart to his less fortunate readers was his discovery that "there really is a textbook way to fix our current mess."

Short-term stimulus works to help an economy recover from a recession. Some kinds of stimulus pay off more quickly than others. Once the economic heart is pumping again, we need to get our deficits under control. The way to do that is a balance of spending cuts, increased tax revenues and entitlement reforms. There is room to argue about the proportions and the timing, and small differences can produce large consequences, but the basic formula is not only common sense, it is mainstream economic science, tested many times in the real world. So what’s the problem? Why is our system so fundamentally stuck?

Perhaps you can guess. Mr Keller’s foray into basic economics has taught him that a big part of the problem is "a Republican Party that, for its own cynical reasons, wants no deal with this president." Nor will you be surprised to learn that the real economists, the ones whose "science" is marked by "integrity," agree with him and not those cynical Republicans that the solution is really quite simple and along the lines mentioned above.

Encouraged, however, by a regrettable "democratization of media" and the internet "shouting" it has given rise to, those same Republicans, led by Speaker of the House John Boehner, have sought out 132 other economists, people who teach at "off-the-beaten-path" colleges and state universities in places like, um, Dakota (you might have to Google Dakota State University to find that it is in Madison, South Dakota) to endorse "a Republican menu of spending cuts, tax cuts and deregulation" which they claim "will do more to boost private-sector job growth in America in both the near-term and long-term than the ‘stimulus’ spending approach favored by President Obama." Quite obviously, it seems, Dakota State can have nothing to teach this self-confessed "economic illiterate" — not when "reputable number-crunchers like Moody’s Analytics and some top-tier economists of both parties said Boehner’s statement would have little or no impact on the short-term employment problem."

Mr Keller’s extensive researches have taught him that the "top-tier economists" are right and the Republican rabble are wrong, just as someone as well in with the élites as the ex-editor of The New York Times might almost have expected. Indeed, if you believe Justin Wolfers — impressively described as "a Wharton School economist who favors Democrats, and who tweeted withering commentary on the list of 132" — they’re not proper economists at all, being as they are outside the "consensus." "I’ve never in my professional life seen the disjunction between the political debate about economics and the consensus of economists be as large as it is today," Professor Wolfers told Mr Keller. Point taken! So it only remains for the latter to account for the fact that anyone at all listens to these outside-the-consensus so-called economists recruited by the Republicans. And he believes that the credulity of those without the benefit of top-tier guidance is owing to a "dilution of authority" that the top-tier sorts would once have enjoyed, a dilution mirrored in the aforesaid "democratization of media" which "has diminished the authority once held — and sometimes abused — by a few big newspapers and broadcasters." Like, as it happens, The New York Times.

A handsome admission, that "and sometimes abused," I think you will agree. Too bad he didn’t have room to specify any examples of such abuse. Had he done so, he might have started with his own column and its subtle appeal to that same, admittedly diminished authority of big media. For he is writing, apparently without knowing it himself, of the politicization of the social sciences in general and of the economics profession in particular but without a sufficient degree of self-awareness to see that his lucubrations are a part of the same process. A bald re-assertion like this of the rights of the top tier, whether of academia or the media, to be implicitly trusted with the authority of "science" is as good an indication as you will find that both science and the media have been corrupted by politics — a fact which is by now so obvious that Mr Keller and some other champions of the "consensus" have to keep instructing us to ignore it.

Others just get on with the process of exploiting that corruption. "Does government regulation really kill jobs?" asked The Washington Post with almost comic disingenuousness not long ago. "Economists say overall effect minimal." Actually only one economist was quoted by the article’s author, Jia Lynn Yang, as saying anything like "overall effect minimal." This was Richard D. Morgenstern (Ph.D. in economics from the University of Michigan with post-doctoral studies at Columbia Business School) who told Ms Yang that "there’s not much evidence that EPA regulations are causing major job losses or major job gains." Dr. Morgenstern is described as "a senior fellow at the nonpartisan think tank Resources for the Future." Now Resources for the Future is exactly as non-partisan as all the other 501(c)(3) think tanks in Washington — which is to say not non-partisan at all. Just like the not non-partisan media. But the polite fiction that they are non-partisan is adhered to on both sides of the political divide, at least with respect to the think tanks, for tax reasons — also so that when some partisan journalist quotes one of the partisan think tankers she can describe his parent organization as being, like the journalist herself, officially "nonpartisan."

A couple of weeks later, Ms Yang was at it again in an article headed "GOP takes aim at process of crafting regulations" in which she cited her own earlier article as her evidence that the Republican anti-regulatory effort was being undertaken in the teeth of the fact that "economists who have studied the impact of regulations have concluded that the overall effect on jobs is minimal." I’ll bet they come from the top-tier too, those economists, though we’re not told who they are. In both articles she mentions that "Only 0.3 percent of layoffs in 2010 were caused by government regulations, according to the Bureau of Labor Statistics." But even if this is true, the number of layoffs directly traceable to government regulations by a government agency is not at all the same thing as "the overall effect on jobs" of those regulations. The difference is the difference noticed by the once authoritative economist Frédéric Bastiat between "What is Seen and What is Not Seen" in his classic essay of that title.

As I have often noticed in these pages in the last six or seven years, both the allegedly non-partisan think tanks and the allegedly non-partisan media have lately grown much more careless about concealing their biases. Presumably they know that no one believes in their non-partisanship anyway, so that the pretense of it has become merely pro forma. No one but already discredited right-wingers ever points out the contradiction anyway, so that the media in particular feel free to indulge a zest for political campaigning hardly to be distinguished from that of their avowedly Democratic allies. Lately this tendency has taken the form of seemingly endless articles about "income inequality" which nicely jibes with the Obama administration’s and the Democrats’ campaign to "spread the wealth around" through raising taxes on the rich.

Here, too, the media have a job to do, and Mr Keller’s paper is getting right on it with reports like that of Sabrina Tavernise on how "Middle-Class Areas Shrink as Income Gap Grows, New Report Finds." If you’re someone used to living in a "middle-class area" — and who isn’t? — that sounds ominous. What’s happening to those middle class people like oneself? Are they being silently disposed of somehow, that their "areas" are said to be shrinking? "The portion of American families living in middle-income neighborhoods," writes Ms Tavernise, "has declined significantly since 1970, according to a new study, as rising income inequality left a growing share of families in neighborhoods that are mostly low-income or mostly affluent." A moment’s thought will tell us that this phenomenon is a statistical artefact. The middle must by definition be in the middle and so can only be shrinking by a redefinition of the categories of those below and above it. Lop off a few here for inclusion with "the rich", lop off a few more there for relegation among "the poor" and, lo, you have a shrinking middle, even though they remain just where they were — in the middle.

The study that Ms Tavernise’s report refers to measures housing trends between 1970 and 2007 — the last year of the boom. It can therefore tell us nothing about current trends in any case, since these must have been affected by the economic contraction. What it describes is a long term trend towards greater economic self-segregation that fits in with the even longer term tendency I have twice before written about in these pages (see here and here) towards greater political, social and cultural self-segregation. I might add the self-segregation of the media into mutually exclusive left and right enclaves. But, economically speaking, this process does not mean, as Ms Tavernise says, that, "put simply, there are fewer people in the middle." The people who used to be in the middle must still be in the middle unless they have experienced a marked change of fortune for good or ill. And about this, the study would have nothing to tell us even if its closing date of 2007 did not rule out any connection to current economic trends. The rich getting richer — and the poor, therefore, getting "poorer" relative to the rich — is inevitably, tautologically a feature of economic expansion. The only way to narrow the "income gap" without a massive social-engineering project (or even, I suspect, with one) is for everybody to get poorer, which is more or less what’s happened in the years since 2007.

But articles like Ms Tavernise’s lend some urgency to the left’s mantra about the richer rich and the poorer poor, since this widening gap — if it were still widening, which it’s not — might otherwise be, politically speaking, a matter of indifference both ways for the much larger number of those in the middle. These must be galvanized by the suggestion that the same insidious process is coming for them — that is for those whom the British Labour leader, Ed Miliband, has taken to calling in an award-winning bit of political rhetoric, "the squeezed middle." Statistically, of course, those in the middle are inevitably, tautologically "squeezed" between those above them and those below them, but in hard times they also feel squeezed as everyone does, again tautologically, between rising prices and stagnant or falling incomes — or the threat of unemployment. The brilliance of the conceit of "the squeezed middle" is to assimilate the one kind of squeezing to the other and thus to cater to people’s willingness to believe that somebody else must be doing the squeezing. Somebody else, most likely somebody better off than they are, must be responsible for their misfortunes.

According to Stephan Shakespeare of the polling firm YouGov, writing in The Daily Telegraph,

The Oxford English Dictionary has given the accolade of "word of the year" to a phrase coined by Miliband because of the way it defines our current state of existence. Some have attacked "the squeezed middle" for being too vague to be meaningful, but that is exactly what makes it work so brilliantly: nearly everyone feels they belong in Miliband’s hard-pressed group. When pushed to say who was and who was not in this worthy, harassed demographic, he answered: "Not those on benefits, not those on six-figure salaries, but the broad middle class who find themselves financially hard-pressed."

Well, the "word of the year" is three words, but why should the OED be any more precise than Mr Miliband? As Mr Shakespeare says, "Language is not always about cold precision, but just as often inclusive emotion. At least with this broad but still meaningful phrase, Ed Miliband has hit the right note." The word "right," you will observe, has nothing to do with the truth content, if any, of the Miliband motto. In the pollster’s terminology, it is "the right note" if it strikes an emotional chord with the electorate, and he is as hopeful as the OED’s word-of-the-year judges that it has.

To Andrew Martin of The Guardian, however, "the squeezed middle" is "a toneless sort of phrase" which makes him think of gastric bands rather than economic struggle. He wishes that Labour would go for "something trenchant: the language of, or associated with, Karl Marx. Now there was a phrase-maker." And, as it happens,

there’s one Marxian concept that seems to encapsulate the life of the majority of Britons whatever they be collectively called. I refer to that feeling of working ever harder for ever less, at the mercy of giant, probably foreign corporations run by people who earn more in an hour than you do in a week, and then coming home and seeing Simon Cowell on TV. It’s called alienation. I’ve looked up the symptoms in my Marxist dictionary, and I definitely have it. How about you?

Although Mr Martin professes to believe that Marx’s philosophy "may be workable in practice because it sure looks good on the page, especially in our present times," his point is not that it does work but that it provides a catchy vocabulary to "encapsulate" people’s feelings of hardship and hopelessness. Like the Occupy Wall Streeters with their nonsensical claim to be "the 99 per cent" — which, according to Brian Stelter of The New York Times they "have succeeded in implanting. . .into the cultural and political lexicon" — he acknowledges that the left’s struggle today is not the prospective class war of Marx’s day, which never really happened, but a struggle of phrase-makers, a public relations battle to find the slogan that will help one brand to come out on top over another. No wonder he is so bitter against "the ruling class" and their "capitalist lackeys"! Politics itself has been turned into a matter of competing marketing efforts, and he’s writing ad copy or he’s not in the game.

That, of course, is where the media come in. Now on both sides of the Atlantic, even when political reporting is straightforward and (relatively) non-partisan, it rarely amounts to more than psephological speculation of the sort to be found in Richard W. Stevenson’s New York Times piece headed "Democrats and G.O.P. Seize on Competing Narratives." I wonder if it ever occurs to anyone on the Times’s editorial staff that this could be the headline to many if not most of the political stories the paper has run in the last twenty years? Where’s the news in this wrestle for PR advantage? I mean the news as it was in the days of big media’s authority — and prosperity. Pointing out that a drop in the unemployment rate in October from 9.0 per cent to 8.6 per cent was being spun one way by Mitt Romney (who "blasted out a statement noting that unemployment had remained above 8 percent throughout the 34 months of President Obama’s tenure in office, ‘the longest such spell since the Great Depression’") and quite another by President Obama himself ("Despite some strong headwinds this year, the American economy has now created, in the private sector, jobs for the past 21 months in a row"), Mr Stevenson noted that

the differing responses highlight a big question as the primary seasons draws near: Which is more politically powerful, a positive trend in job growth or the absolute level of unemployment? The ability of the two parties to persuade voters to look at the situation their way — for Democrats, that the country is making progress and the economic medicine is working, for Republicans that no incremental improvements can eradicate the failure of Mr. Obama’s economic leadership — is now shaping up as central to the 2012 campaign.

Stop the presses! But of course stories like these are a necessary counterpart to laments for the squeezed middle or attacks on Republican economic theories. The media have their own role to play in guiding their readers and viewers to the right "narrative," but they can perform it more effectively if they can continue to lay claim to some of that lost authority mentioned by Bill Keller. They do this by constructing a narrative of their own in which they are to be found standing apart from the struggle and reporting exclusively on the political horse-race as those competing narratives come thundering down the stretch. What Bill Keller is regretting is that fewer and fewer people seem willing to believe they themselves don’t have a horse in the race.




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