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Home Publications Blogs Beat the Press Deficit and Jobs: The Battle of the Washington Philosophers

Deficit and Jobs: The Battle of the Washington Philosophers

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Saturday, 04 June 2011 08:06

The NYT continues to operate under the bizarre illusion that Congress is filled with philosophers. It headlined a piece today on the stalemate over budget and economic policy, "War of Ideas on U.S. Budget Overshadows Job Struggle." Of course Congress is actually composed of politicians who get their office by appealing to important interest groups.

If the debate were actually one of ideas, as claimed in this article, then it would be possible to use evidence. For example, the article tells readers:

"Republicans said the slow pace of hiring in May underscored the need for sharp cuts in federal spending and regulation to spur corporate investment. ...

"They argue that Democratic efforts to revive growth through public spending programs have failed as the economy remained weak and unemployment high almost two years after the end of the recession.

"'You talk to job creators around the country like we have,' House Speaker John A. Boehner said Friday. 'They’ll tell you the overtaxing, overregulating and overspending that’s going on here in Washington is creating uncertainty and holding them back.'"

There are several specific testable claims in these assertions. For example, Mr. Boehner claims that overtaxing and overregulating are big problems for businesses. It would have been appropriate to ask him what he is talking about.

Taxes are actually lower today than they were in the late 90s when the economy was growing rapidly and adding 250,000 jobs a month. If Mr. Boehner's view is that taxes are preventing firms from adding jobs, then he must have a good reason for believing that the lower tax rates of 2011 are a bigger problem that the higher tax rates of 1996-2000. The NYT deprived its readers of Mr. Boehner's thoughts on this key issue.

It would also have been helpful to identify the regulations that Mr. Boehner considers to be major obstacles to hiring. There have been relatively few major increases in regulation since President Obama took office. The most important concern health care and these will have relatively little effect until 2014.

It is not plausible that a regulation that does not take effect for another 2 and 1/2 years would discourage hiring today, especially since turnover in most businesses is rapid enough that firms can easily shed through attrition any workers that prove to be unprofitable in a context of the new health care regulations. And of course, firms could always just increase average hours and hire temps, neither of which they are doing. This suggests that the problem is lack of demand, not regulations.

There is also research on the impact of President Obama's stimulus package on jobs. If the NYT is going to feature the political battle as a war of ideas it should present evidence on which ideas are right. (NYT reporters have time to find this evidence, its readers generally do not.) For example, a study of the stimulus's employment impact by two Dartmouth professors found that it likely had a larger employment effect than expected. The problem was that the stimulus was far too small, leading to a net expansion (federal stimulus minus state and local cutbacks) of government spending and tax cuts of around $150 billion a year against a contraction in annual demand in the private sector due to the collapse of the housing bubble of close to $1.2 trillion.

This is the sort of discussion that would appear in a genuine discussion of a battle of ideas. Of course, it is silly to imagine that members of Congress are really arguing about ideas. They are trying to position themselves for re-election. Battles of ideas take place in college philosophy departments, not between elected officials.

Comments (8)Add Comment
...
written by denim, June 04, 2011 11:24
All the evidence that one with the mind of a Randite is that the idea "sounds good" to them, i.e., it does not conflict with any opinions currently held as dear. Facts do not matter. They reject any that don't "sound good" to them.
Typo?
written by fuller schmidt, June 04, 2011 11:56
I couldn't make out what the sentence in the 9th paragraph was supposed to be saying, Dean. I would really like to know what you meant there. I apologize in advance if I'm just being a dunce.
Yes this NYT article was poor
written by david smith, June 04, 2011 12:22
I read it, and just could not believe that these two differing views on economics were treated equitably, when one is fact-based and the other isn't.

Shame on Obama for treating the deficit like an emergency.
corrected type
written by Dean, June 04, 2011 12:23
Thanks Fuller -- i fixed it.
"NYT deprived its readers of Mr. Boehner's thoughts"
written by Paul, June 05, 2011 1:32
Ha, Ha, good one Dr. Baker!

Boehner's "thoughts" on economic matters are about as coherent as Palin's thoughts on Paul Revere. The NYT did its readers a favor by not asking Boehner for an explanation of his talking points.
...
written by S.D. Jeffries, June 06, 2011 1:35
Paul;
You have to admit though, asking for Boehner to explain his statements would have been entertaining. I know the NYT is supposed to be informative rather than entertaining, but unfortunately in the case of this piece, it was neither.
...
written by kharris, June 14, 2011 12:16
"Battles of ideas take place in college philosophy departments, not between elected officials."

Beg to differ. I understand you have been taking reporters to task for calling differences of position in politics "philosophical differences", as well you should. However, you may have gotten yourself in a rut.

An idea need not be true to be an idea. An idea need not be believed in order to be an idea. The battleground for a battle of ideas is not always proponents of the various sides. Sometimes, and particularly in the case of politics and propaganda, the battleground is the uncommitted minds being recruited. Politicians are not philosophers, by and large, but they do sell ideas. Rarely do they have ideas outside of how to get re-elected, but they sell them like salesmen on a used car lot.
...
written by kharris, June 14, 2011 12:23
Just for fun:

"“The kind of man who wants government to adopt and enforce his ideas is always the kind of man whose ideas are idiotic”" -- H. L. Mencken

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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