If you, like me, spend more time yelling at /The New York Times/ or
/Washington Post/ than it takes to read them...
...you might have interest in the following resource.
It spots the errors of fact or interpretative biases/assumptions in
these two newspapers' reporting on economic issues.
It's called the Economic Reporting Review, a weekly service of FAIR
(Fairness and Accuracy in Reporting, which has been supplying
analysis, fact-checking, and bias-checking of media content since
1986) and The Preamble Center (a DC-based research center whose main
interest is the economic problems confronting working families).
The Economic Reporting Review is authored by Dean Baker. Here's one
item from this week's review, so you can get a flavor of it. The
format presents the title, author, and source of the article in
question, and then Baker's critique.
"Inflation? It Just Doesn't Add Up"
New York Times, August 22, 1999, Section 3 page 1
This article examines the factors that have helped to keep inflation
low during this expansion. While much of the analysis is insightful,
it includes several
statements that are inaccurate or misleading.
For example, at one point it contrasts the current period of stable
low inflation with the "bad old days, when upwardly spiraling prices
seemed as inevitable as the
sunrise." This description of the bad old days really refers to just
two periods: the gradual acceleration of inflation in the late '60s,
which was associated with the
escalation of the Vietnam War, and the oil shock driven inflation of
the '70s. The '80s were characterized by declining and then stable
inflation and the '50s by
generally low inflation. Examined against the backdrop of the entire
post-war period, the experience of the '90s does not stand out as
The article also asserts that increased competition due to the
deregulation of industries such as airlines, railroads and
telecommunications has been a major
factor in keeping prices down. This claim seems dubious, since
corporations have managed to increase their profit margins
considerably in the last two
decades. In 1978, at the profit peak of the late '70s business cycle,
the capital share (profits plus interest) of corporate income was
19.1 percent. By comparison
in 1997, the profit peak in the current cycle, the profit share of
corporate income had risen by more than two and a half percentage
points to 21.6 percent. The fact
that firms have been able to significantly increase their profit
margins seems inconsistent with the claim that they are feeling
greater competitive pressures.
The article also comments on the high human costs associated with
prior recessions which were induced to control inflation. It asserts
that the memory of these recessions help keep inflation at bay.
Although the Federal Reserve Board did use unemployment to control
inflation in the '70s and '80s, it does not follow that this was the
only possible way to control inflation. Nor is it obviously the case,
that in the absence of the extraordinary events of the '60s and
'70s-a major war and an effective oil cartel-that the United States
economy faces the prospect of anything other than a minor
acceleration in the rate of inflation.
There are two small errors in the article that are worth noting. The
article notes a comment from Northwestern University Professor Robert
Gordon, that declining
computer prices have reduced the annual rate of inflation by half a
percentage point. While this comment is accurate, it refers to the
inflation rate measured by
the GDP deflator. The inflation rate measured by the consumer price
index (CPI) is the main focus of the article. The impact of falling
computer prices has been
to lower the rate of inflation measured by the CPI by approximately
0.05 percentage points since 1998. Prior to 1998 the impact of
falling computer prices on the CPI inflation rate was considerably
The other error is a graph accompanying the article which is labeled
as the "four-quarter moving average of the medical care component of
Index." The graph actually shows the difference between the inflation
rate shown by medical care component and the overall Consumer Price
SOURCE: Dean Baker, the Economic Reporting Review,
Reading Baker's critiques is also a wonderful exercise in learning to
do media criticism. You can subscribe to a mailing list of these
reviews, as well.
PS--on the item above (990830.html), scroll down and check out the
item "Solidarity and the Price of Apricots." It says that a new
regulation in France requires retail sellers of produce to display
the price given to the farmers of that produce; it was in the 8/21/99
Center for Integrated Ag Systems, UW-Madison
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on earth. And now you see the light--you stand up for your
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