5/25/10 11:31 AMCan We Please Shut the Washington Post Down Today? I Really Can't See It Doing Anybody Any Good... - Grasping Reality with Both Hands

Page 1 of 4http://delong.typepad.com/sdj/2010/05/can-we-please-shut-the-washington-post-down-today-i-cans-see-it-doing-anybody-any-good.html

Grasping Reality with Both HandsThe Semi-Daily Journal of Economist J. Bradford DeLong: Fair, Balanced, Reality-Based, and Even-HandedDepartment of Economics, U.C. Berkeley #3880, Berkeley, CA 94720-3880; 925 708 0467; delong@econ.berkeley.edu.

Economics 210aWeblog ArchivesDeLong Hot on GoogleDeLong Hot on Google BlogsearchMay 24, 2010

Can We Please Shut the Washington Post Down Today? I Really Can't See It Doing

Anybody Any Good...

Why oh why can't we have a better press corps?

Larry Summers opens his speech at Johns Hopkins today:

Reflections on Fiscal Policy and Economic Strategy: [T]he observation that the economy is again ascending does not meanthat we are out of a very deep valley.... [W]e are nearly 8 million jobs short of normal... $1 trillion [a year] – or $10,000 perfamily [per year] – short of the economy’s potential output... recent events in Europe have introduced uncertainty....Shortfalls in output and employment stunt the economy’s future potential as investment projects are put off and as theskills and work habits of the unemployed atrophy. This last point is especially important... for the first time since theSecond World War the typical unemployed worker has already been out of work for more than six months. And behindthese statistics lie millions of stories of Americans who have seen the basic foundations of their economic security erode. Beyond the economic projections and equations we economists make lie the struggles of communities devastated by theimpact of this recession. Whatever the judgments of groups of economists about the official parameters of the recessionand the growing signs of recovery, for millions of Americans the economic emergency grinds on...

Writing for the fake newspaper that is the Washington Post, Dana Milbank covers Larry Summers. His opening:

Summers needs to take Explaining Econ 101: Millions of Americans are out of work, the budget deficit is in the trillionsand Europe is flirting with economic collapse. Fear not, says Larry Summers, the chief economic adviser to PresidentObama. It is merely a "fluctuation." Summers delivered this dismissive judgment during a speech Monday morning to theJohns Hopkins School of Advanced International Studies. In a Q&A session afterward, a man in the audience asked aboutthe debt crisis in Europe -- and the former Treasury secretary and Harvard president answered in a most curious way.

[M]y guess is that most of you, unless prompted, would not mention the move from a G-7 towards the G-20 as one ofthe most important things that happened last year," Summers said. "But I suspect that when historians look back atthis time, after the precise details of this economic fluctuation have been forgotten, the establishment of a global forumthat really does embody all the major economies in the world will be remembered as an important aspect of thismoment.

It was vintage Summers: smart, esoteric -- and utterly unhelpful. Maybe he's correct, in an academic sense, that this era willcome to be known not as a period of economic misery and human suffering but as the time when the Group of 20 largeeconomies came to replace the Group of Seven (G-8, actually). Still, is that the message the White House wants to beputting out now? The Summers speech, SAIS Dean Jessica Einhorn told the students in her introduction, was arranged on"short notice" and would be "a most timely presentation." This hinted at big news.

What he delivered instead was a lot of econo-speak that could only baffle Americans worried about finding or keeping a job.He spoke of "the multiplier process" and "a range of catalyzing investments." He invoked the "liquidity trap" and "tailrisks." He alluded to the "width of the confidence interval" and the need to "achieve the sustainability criterion." It was thelanguage of the PhD thesis: "Conditions for fiscal policy to have an expansionary impact are especially likely to obtain...considerations militating in favor of sustainable budgets... the ultimate consequences of stimulus for indebtedness dependcritically on the macroeconomic conditions"...

I don't know lots of things.

I don't know why Dana Milbank decided to misrepresent what Summers said so egregiously.

I don't know why Dana Milbank thinks that an address to the students and faculty of something that calls itself an advanced

school cannot use big phrases like "liquidity trap" and "multiplier process" (which are the meat and fish of first-semesterfreshman macroeconomics) or "confidence interval" (freshman statistics) or "tail risks" (introductory finance). I don't know whyMilbank thinks it is offensive every time Summers's vocabulary crosses the twelfth-grade level. (I would give him "a range ofcatalyzing investments," "achieve the sustainability criterion," and "conditions for fiscal policy to have an expansionary impactare especially likely to obtain... considerations militating in favor of sustainable budgets... the ultimate consequences of stimulusfor indebtedness depend critically on the macroeconomic conditions"--if not for the fact that this is an audience of graduatestudents and their teachers.)

I don't know why Stanley Kaplan Test Prep Daily in its current incarnation is still publishing.

Dashboard Blog Stats Edit Post

5/25/10 11:31 AMCan We Please Shut the Washington Post Down Today? I Really Can't See It Doing Anybody Any Good... - Grasping Reality with Both Hands

Page 2 of 4http://delong.typepad.com/sdj/2010/05/can-we-please-shut-the-washington-post-down-today-i-cans-see-it-doing-anybody-any-good.html

I do know that over at the real newspaper--the Financial Times--we can find Ed Luce and James Politi covering the samespeech:

Obama adviser calls for new ‘mini-stimulus’: The Obama administration made a strong plea to Congress on Monday to gritits teeth and pass a new set of spending measures – dubbed the “second stimulus” by some economists – in order to helpdig the economy “out of a deep valley”. The call for action, which was made by Lawrence Summers, Barack Obama’s senioreconomic adviser, who urged Congress to pass up to $200bn (£138.9bn) in spending measures, came at the same time asMr Obama asked Capitol Hill to grant him powers to cut “unnecessary spending”.

The combined announcements was made amid rising concern that centrist Democrats, or those representing marginaldistricts, might vote against the spending measures, which include more loans for small businesses, an extension ofunemployment insurance and aid to states to prevent hundreds of thousands more teachers from being laid off. It alsocomes at a time when last year’s $787bn stimulus is wearing off. Mr Summers argued that it would be a premature move atthis stage in the cycle to move to fiscal discipline. “I cannot agree with those who suggest that it somehow threatens thefuture to provide truly temporary, high-bang-for-the-buck jobs and growth measures,” he said. “Spurring growth, if we canachieve it, is by far the best way to improve our fiscal position.”

Taken together, Mr Summers’s speech and Mr Obama’s announcement show an administration walking a fine line betweenthe need to signal strong medium-term fiscal discipline and not jeopardising what they fear may be a fragile recovery. “Theobservation that the economy is again ascending does not mean that we are out of a very deep valley,” said Mr Summers...

Brad DeLong on May 24, 2010 at 06:37 PM in Economics, Economics: Fiscal Policy, Information: Better PressCorps/Journamalism, Obama Administration | Permalink

Reblog (0) |

Favorite

| Digg This | Save to del.icio.us | Tweet This!

TrackBack

TrackBack URL for this entry:http://www.typepad.com/services/trackback/6a00e551f0800388340133ee687e6c970bListed below are links to weblogs that reference Can We Please Shut the Washington Post Down Today? I Really Can't See It DoingAnybody Any Good...:

Comments

Richard Green said...Larry Summers needs to reach beyond his audience at Hopkins. As Milbank points out, Obama's policies are working, but theadministration is losing the communications battle to right-wing sound bites about socialism. Clinton was brilliant at explainingsubtle ideas to a wide audience, and Obama is quite capable of the same thing. But right now, the administration is not doing agood enough job of explaining why it is doing a good job. Pointing out that college freshman should understand confidenceintervals is not going to get us where we want to go.

Reply May 24, 2010 at 07:05 PMFirionel said...For once I'm not sure I want to blame the press for the messed up explanation. Sure, Summers makes a coherent argument, andMilbank apparently didn't get it. And he may not be the greatest journalist alive, but sure as hell he's smarter than the medianvoter. So maybe a three-sentence explanation using only short words would be what is called for here. And truth be told, I'm notat all sure I am exaggerating.

Unless of course one is willing to assume malice on Milbank's part. In that case, well, screw them. But I'm not ready to go therejust yet.

Reply May 24, 2010 at 07:09 PMIrregardless said...Firionel and Richard, The issue here is not that Milbank did not get it, the issue is that he completely changed the meaning ofwhat Summers said. What Milbank conveyed at the Washington Post could in no way be derived from Summers speech. Theresult is so bad that I think Dana knew exactly what he was doing when he penned that column.

Furthermore, why is Milbank asking, "Still, is that the message the White House wants to be putting out now?" Isn't Milbanksjob to actually present the news to his readers in a simple manner?

If Summers were giving a speech to voters or an interview on CNN, I might have a different opinion. This is an academic, givingan academic speech to a bunch of academics in an academic setting.

Why cant we have a better press corps?

Reply May 24, 2010 at 07:40 PMsfguy said...Irregardless, Larry Summers is not an academic, he's the senior economic member of the Obama economic team, and hiscomments will be interpreted thusly.

Reply May 25, 2010 at 05:59 AMkharris said...While on the topic of Summers, anybody making book on his future at the White House? EP (David Warsh) is speculating thatSummers will head back to Harvard before the calendar runs out on his leave. EP is generally very level-headed, though in thiscase he is playing the DC cocktail game, and that doesn't mix so good with level-headed.

http://www.economicprincipals.com/

5/25/10 11:31 AMCan We Please Shut the Washington Post Down Today? I Really Can't See It Doing Anybody Any Good... - Grasping Reality with Both Hands

Page 3 of 4http://delong.typepad.com/sdj/2010/05/can-we-please-shut-the-washington-post-down-today-i-cans-see-it-doing-anybody-any-good.html

Me: Economists:

Paul KrugmanMark ThomaCowen andTabarrokChinn andHamiltonBrad Setser

Juicebox Mafia:

Ezra KleinMatthew YglesiasSpencer AckermanDana GoldsteinDan Froomkin

Moral

Philosophers:

Hilzoy and FriendsCrooked Timber ofHumanityMark Kleiman andFriendsEric Rauchwayand FriendsJohn Holbo andFriends

Reply May 25, 2010 at 07:43 AMComment below or sign in with TypePad Facebook Twitter and more...

Post Preview

Will Democrats Steal Your 401(k)?The Atlantic - May 12, 2010She may or may not have been the first major economics blogger, depending onwhether we are allowed to throw outlying variables such as Brad Delong out of ...Related Articles » « Previous Next »

economics DeLong

5/25/10 11:31 AMCan We Please Shut the Washington Post Down Today? I Really Can't See It Doing Anybody Any Good... - Grasping Reality with Both Hands

Page 4 of 4http://delong.typepad.com/sdj/2010/05/can-we-please-shut-the-washington-post-down-today-i-cans-see-it-doing-anybody-any-good.html