Bill McBride wrote a very interesting article that I want to expand on, Using Nomimal GDP to Mislead: a Bogus Reagan Wikipedia Sentence. Here’s the sentence, “[Reagan’s] economic policies saw a reduction of inflation from 12.5% to 4.4%, and an average annual growth of GDP of 7.91%; while Reagan did enact cuts in domestic spending, military spending increased federal outlays overall, even after adjustment for inflation.” I’m not that up on this kind of stuff, but I bristled at this bit of propaganda. Two things are clearly wrong with it: (1) Reagan should not be given credit for the reduction in inflation; (2) the GDP growth rate is just wrong — not that I knew what it was, but the US has never seen that kind of growth in my lifetime — no advanced economy does.
McBride pointed out three things. First, the decrease in inflation was due to Paul Volcker at the Fed. It it important to remember that Volcker’s work at the Fed is also probably the reason that Carter didn’t get a second term as president, since his policies really hurt the economy in the second half of Carter’s term. Second, the GDP growth rate is given in nominal terms — not adjusted for inflation. The real growth rate was 3.4%, which happens to have been the same as Carter’s growth rate. Reagan was no magician.
And third, the whole end of the sentence is wrong. Reagan did indeed raise domestic spending even after adjustment for inflation. This has been one of the most annoying things of the Obama era. Always before, during recessions, the federal government increased spending. But the Republicans have stopped Obama from doing this. So last year, we saw 2.4% GDP growth — which looks bad until you consider the drastic decline in government spending, because the Republicans know that their only way to power is to destroy the economy.
McBride is a pretty well known guy, so I was curious to see what happened to Wikipedia. His article was published on Tuesday in the afternoon. By late that night, the passage had been change. It was then technically accurate, while still providing the same basic impression, “During Jimmy Carter’s last year in office (1980), inflation averaged 12.5%, compared with 4.4% during Reagan’s last year in office (1988)… and unadjusted GDP growth averaged 7.4% with a high of 12.2% growth in 1982.” They’ve actually made it worse by adding a deceptive and unnecessary comparison: Carter bad, Reagan good. And it left the largely meaningless unadjusted GDP growth rate, but at least it labeled it.
By this morning, the information was better, but not good, “During Jimmy Carter’s last year in office (1980), inflation averaged 12.5%, compared with 4.4% during Reagan’s last year in office (1988)… and real GDP growth averaged 3.44% with a high of 8.55% in 1983, while nominal GDP growth averaged 7.4%, and peaked at 12.2% in 1982.” So they left in the deceptive comparison to Carter and the nominal garbage data, but at least added the data on the real growth rate.
Notice how there is a reference to Carter regarding inflation, because it makes him look bad. But there is no reason to include Carter in this at all. It could just say, as McBride does, that inflation was 11.8% at the start of Reagan’s term and 4.5% at the end — still deceptive in that it gives Reagan credit for something that he didn’t do, but not too bad. Notice also that when mentioning Reagan’s GDP growth, the writers appear to have not thought it worth comparing to Carter — for obvious (very partisan) reasons.
I like Wikipedia a lot, but it is very prone to this kind of nonsense. Wikipedia provides a way for true believers to literally rewrite history. And they do. You may remember back in 2011, Sarah Palin said that Paul Revere “rang bells” while he was “warning the British” — apparently they were unaware that they were attacking. As a result, Palin fans went to the Paul Revere page and added the necessary new postmodern Sarah Palin history about the bells and who Revere was warning. A change would be made, the editors would take it out. And on and on. Eventually, the editors had to stop changes to the page for a while to let the “controversy” settle down.
That’s all we are seeing with the Reagan Wikipedia page. There are people who have deified Reagan. If they see that Wikipedia is saying that economic growth under Reagan was no better than under Carter, and that Reagan shouldn’t get much if any credit for decreased inflation, these people are going to change it. As much as I like Wikipedia, when it comes to people and issues like this, you really have to be careful.
I was crawling around
I hope you don’t mind if I waste a post by explaining to you why I don’t feel like writing anything. It’s funny. When I was out of town the other day, I was following the news on my phone. So I wrote up a whole schedule of articles for the next day in my notebook. Now, that’s notebook as in the thing that people from the 1950s would recognize. I still do a lot of writing by hand. But the point is that I wrote down what I was going to write once I got back home with all my standard tools like the keyboard I like, the trackball, and the computer set up the way that I like it.
Well isn’t this nice! Steve M at No More Mister Nice Blog wrote,
H-1B visas allow high tech companies to hire foreign workers when they just can’t find “qualified workers.” And I’ve been writing about this for a very long time, because it is a total scam. But in saying this, I don’t mean to put down the people who work under H-1B visas. I’ve worked with many of them and they are generally quite competent and I’ve considered a number of them friends. But H-1B visas are a scam for the high tech industry. They hurt high tech workers in America. And above all, they hurt the people working under them because they end up being limited kinds of slaves.
I am three days of posts ahead as I write this. Normally, I would have moved this one to the Wednesday 5:05 pm post. But as you may have noticed, we’ve been having some server problems around here. Mostly they don’t stop pages from displaying. But they cause the categories to go away and, I assume, no one can post comments. At least I know that I can’t write anything online. The database can only be read — not written to. But nonetheless, today is a very big day: Frankly Curious dropped into the
Sam Dean over at Five Thirty Eight pointed out a curious aspect of modern computing,
I’ve gotten into a kind of a work routine around here. In the morning, I get my tea and read through all my standard websites. Then I spend most of the day on my paying work — with plenty of breaks for tea drinking and the occasional food. Then I take a break, cook dinner, and spend the rest of the evening writing for Frankly Curious. It works pretty well, because it gives my subconscious the whole day to think about what I’m going to write. The old way could be frustrating with me thrashing around looking for something to write about.
I remember several years ago, Paul Krugman was in the UK debating a couple of conservatives on a television show there. At one point, Krugman said, “Well not everyone is going to start their own business.” And a female PM said, “Why not?” Krugman didn’t even respond because it was such a ridiculously stupid thing to say. But I noted at the time that if everyone went into business for themselves, there would be no businesses — just contractors everywhere. One can hardly imagine a more inefficient system. There would be no way to improve productivity by scaling up. But of course, conservatives like the idea of everyone starting their own business so they can label workers as less worthy than business owners.
Well, dear readers, I have started a new job of sorts. It is freelance writing — technical stuff with no byline. And it seems like it is going to be consistent work. But it has been getting in the way of my constant stream of frankly curious wisdom. Not that you would notice, because I haven’t missed any scheduled articles yet. But right now it is 5:30 pm on Saturday and I am just starting to write the last article for tomorrow. [Update: this was originally scheduled for Sunday evening, but got pushed back. -FM] Normally, I’m a bit further ahead than that. In fact, I prefer to stay two days ahead. And I hope to get another half a day’s writing in by the time I go to sleep. I can do that because I have nothing that anyone would mistake for a life.