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Economix Blog: Bernanke Says Better Days Lie Ahead

May 18, 2013 by Leave a Comment

Ben S. Bernanke is, of course, the chairman of the Federal Reserve, but he always seems most comfortable as an educator, a role he slips into for a commencement address on Saturday at Bard College at Simon’s Rock.

If you’re looking for news about monetary policy, read no further. Mr. Bernanke’s speech mentions not a word about his day job. (In 2009, he opened a commencement address by saying, “The business reporters should go get coffee or something, because I am not going to say anything about the markets or monetary policy.” This time, we had to read the whole thing to make sure that no hint of news was buried inside.)

No doubt the graduating class will be much relieved to have avoided a modern version of Paul Volcker’s commencement address at American University in 1984, dug up by Catherine Hollander of National Journal. One can only imagine the faces in that audience as Mr. Volcker announced, “I’d like to take advantage of your captive presence today, before you scatter into the real world, to reflect a bit on that uniqueness, on the justification for our special role and degree of independence within the government, and on the special responsibilities that independence implies.”

What Mr. Bernanke’s speech delivers, instead, is a brief and engaging sketch of the debate about the state of innovation.

Economic growth depends on innovation, and some see evidence we’re having less of it — or at least that the areas of ongoing innovation, like information technology, are making less difference in our lives. The economist Robert Gordon wrote last year that we’re no longer inventing anything as useful as indoor flushable toilets. The economist Tyler Cowen offered a fluid account of the same basic argument in a brief, important book with a long title: “The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick and Will (Eventually) Feel Better.”

Mr. Bernanke, describing this argument, compares the present moment with life in 1963, when he was 9 years old. “Though my memory may be selective, it doesn’t seem to me that the differences in daily life between then and now are all that large,” he says in the prepared text of the speech. “Heating, air conditioning, cooking, and sanitation in my childhood were not all that different from today. We had a dishwasher, a washing machine and a dryer. My family owned a comfortable car with air-conditioning and a radio, and the experience of commercial flight was much like today but without the long security lines. For entertainment, we did not have the Internet or video games, as I mentioned, but we had plenty of books, radio, musical recordings, and a color TV (although, I must acknowledge, the colors were garish and there were many fewer channels to choose from).”

But the real concern is about the future: What if life continues to resemble 1963? What if the Internet doesn’t change the world?

And on this count, Mr. Bernanke breaks with the bleak traditions of his dismal profession to declare himself a fundamental optimist.

He notes that pessimism also ran rampant in the 1930s; it is human nature to assume (and to predict) that current trends will persist. “It is common to hear people say that the epoch of enormous economic progress which characterized the 19th century is over; that the rapid improvement in the standard of life is now going to slow down,” John Maynard Keynes wrote at the time. Mr. Bernanke adds, “Sound familiar?”

Moreover, he says it is probably too soon to judge the impact of recent innovations.

And he sketches a world in which more people in more countries are pursuing innovations in competition for ever-greater rewards: “In short, both humanity’s capacity to innovate and the incentives to innovate are greater today than at any other time in history.”

So cheer up, graduates! It’s a difficult time to be young but, as this blog notes frequently, you’ve just taken the single most important step to improve your own prospects: You earned a college degree. Now do the rest of us a favor and innovate.

Article source: http://economix.blogs.nytimes.com/2013/05/18/bernanke-says-better-days-lie-ahea/?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

U.S. Secretly Obtains Two Months of A.P. Phone Records

May 13, 2013 by Leave a Comment

WASHINGTON (AP) — The Justice Department secretly obtained two months of telephone records of reporters and editors for The Associated Press in what the news cooperative’s top executive called a “massive and unprecedented intrusion” into how news organizations gather the news.

The records obtained by the Justice Department listed outgoing calls for the work and personal phone numbers of individual reporters, for general AP office numbers in New York, Washington and Hartford, Conn., and for the main number for the AP in the House of Representatives press gallery, according to attorneys for the AP. It was not clear if the records also included incoming calls or the duration of the calls.

In all, the government seized the records for more than 20 separate telephone lines assigned to AP and its journalists in April and May of 2012. The exact number of journalists who used the phone lines during that period is unknown, but more than 100 journalists work in the offices where phone records were targeted, on a wide array of stories about government and other matters.

In a letter of protest sent to Attorney General Eric Holder on Monday, AP President and Chief Executive Officer Gary Pruitt said the government sought and obtained information far beyond anything that could be justified by any specific investigation. He demanded the return of the phone records and destruction of all copies.

“There can be no possible justification for such an overbroad collection of the telephone communications of The Associated Press and its reporters. These records potentially reveal communications with confidential sources across all of the newsgathering activities undertaken by the AP during a two-month period, provide a road map to AP’s newsgathering operations and disclose information about AP’s activities and operations that the government has no conceivable right to know,” Pruitt said.

The government would not say why it sought the records. Officials have previously said in public testimony that the U.S. attorney in Washington is conducting a criminal investigation into who may have provided information contained in a May 7, 2012, AP story about a foiled terror plot. The story disclosed details of a CIA operation in Yemen that stopped an al-Qaida plot in the spring of 2012 to detonate a bomb on an airplane bound for the United States.

In testimony in February, CIA Director John Brennan noted that the FBI had questioned him about whether he was AP’s source, which he denied. He called the release of the information to the media about the terror plot an “unauthorized and dangerous disclosure of classified information.”

Prosecutors have sought phone records from reporters before, but the seizure of records from such a wide array of AP offices, including general AP switchboards numbers and an office-wide shared fax line, is unusual.

In the letter notifying the AP, which was received Friday, the Justice Department offered no explanation for the seizure, according to Pruitt’s letter and attorneys for the AP. The records were presumably obtained from phone companies earlier this year although the government letter did not explain that. None of the information provided by the government to the AP suggested the actual phone conversations were monitored.

Among those whose phone numbers were obtained were five reporters and an editor who were involved in the May 7, 2012, story.

The Obama administration has aggressively investigated disclosures of classified information to the media and has brought six cases against people suspected of providing classified information, more than under all previous presidents combined.

The White House on Monday said that other than press reports it had no knowledge of Justice Department attempts to seek AP phone records.

“We are not involved in decisions made in connection with criminal investigations, as those matters are handled independently by the Justice Department,” spokesman Jay Carney said.

Article source: http://www.nytimes.com/aponline/2013/05/13/us/politics/ap-us-ap-phone-records-subpoena.html?partner=rss&emc=rss

Filed Under: Media Business Tagged With: , ,

Economix Blog: Flaws Are Cited in a Landmark Study on Debt and Growth

April 16, 2013 by Leave a Comment

Kenneth Rogoff and Carmen Reinhart at Ms. Reinhart’s Washington home in 2010, the year their study Mary F. Calvert for The New York Times Kenneth Rogoff and Carmen Reinhart at Ms. Reinhart’s Washington home in 2010, the year their study “Growth in a Time of Debt” was published.

An influential 2010 economics paper by Carmen Reinhart and Kenneth Rogoff showed that countries with high levels of debt experienced significantly slower rates of growth – and became a justification for many countries to adopt austerity budgets to hold down their debt loads. Now a provocative new paper is arguing that the paper was seriously flawed, in part because of basic calculation errors in a spreadsheet.

Because policy makers, economists and journalists have repeatedly cited the Reinhart-Rogoff paper in recent years, the new paper is causing a significant stir, with commentary from across the economics blogosphere.

We have reached out to the authors of the original paper to comment, and will update as soon as we hear from them. But in the meantime, here is a sense of the controversy.

In their path-breaking paper, “Growth in a Time of Debt,” based on 3,700 economic observations, Ms. Reinhart and Mr. Rogoff, now both at Harvard, found little relationship between growth and debt for countries with debt-to-economic output ratios of 90 percent or less. But for countries with debt loads equivalent to or above 90 percent of annual economic output, “median growth rates fall by one percent, and average growth falls considerably more.”

Since that paper came out, dozens of policy makers around the world have cited it as a reason for cutting budgets despite a down economy. Keep your debt below 90 percent of output, the logic went, and you would be rewarded with stronger growth in the future. (See, for instance, the House Republican budget.)

But some economists were skeptical of the results. Others wondered whether countries with heavy debts struggled to grow, or whether slow-growing countries ended up with heavy debts, for instance. And many noted how hard it could be to draw straight lines between debt and growth, given the panoply of factors at work.

Given the policy importance of the question, Thomas Herndon, Michael Ash and Robert Pollin of the University of Massachusetts, Amherst, decided to try to replicate the results. They could not do so with public data, and asked Mr. Rogoff and Ms. Reinhart for their data set.

Within it, they have seemingly discovered a few errors: some simple miscalculations or data exclusions that greatly alter the results. According to their re-running of the figures, “the average real G.D.P. growth rate for countries carrying a public debt-to-G.D.P. ratio of over 90 percent is actually 2.2 percent, not -0.1 percent,” they write.

If their analysis proves to be correct, it would significantly undercut the argument that economies need to keep their debt levels down to avoid a future growth slowdown. But other studies have found similar results to those found by Reinhart-Rogoff, and the two Harvard economists have published additional studies buttressing their results.

Moreover, the argument floating around that the Reinhart-Rogoff research altered any country’s policy course – the idea that we have austerity because of a spreadsheet mistake – is dubious at best. When the global recession hit, many members of the policy elites in Europe and in the United States already believed that budget discipline begat growth. And countries that adopted austerity budgets often had to do so because of the vicissitudes of the market and the financing constraints of groups like the International Monetary Fund and the European Commission.

Article source: http://economix.blogs.nytimes.com/2013/04/16/flaws-are-cited-in-a-landmark-study-on-debt-and-growth/?partner=rss&emc=rss

Filed Under: Economy News Tagged With: , ,

The Media Equation: Guns, Maps and Disturbing Data

January 13, 2013 by Leave a Comment

As a journalist, I am trained as an absolutist in matters of open data. Public records should be just that, public, and as agents of transparency, news media outlets should help cast sunlight on those records. In that context, data is not good or bad, right or wrong; it is information that should be there for the asking, taking or publishing.

That was my initial reflex after The Journal News in Westchester County, N.Y., decided, in the aftermath of the Newtown, Conn., shootings, to publish a map with the names and addresses of people who had applied for handgun permits in two suburban counties. I followed a simple logic: the records were open, the public interest was high and journalism that blends both those things makes sense.

But on reflection, was it really journalism? Not so much. The accompanying article was about whether gun permits should be public, but the newspaper seemed to have all but decided that debate by publishing the map. More problematic was the closeness in time to the Newtown massacre, which served to cast suspicion and guilt in tendentious ways. By dropping the records into the maelstrom of a mass shooting, was The Journal News merely putting data-driven link bait out there?

Publishing is a discrete act, separate from whether something is public or not. Our job as journalists is to draw attention, to point at things, and what we choose to highlight is defined as news. And then it is our job to create context, talk to sources who bring insight and provide analysis. Given that, simply pointing out that something is public as the sole reason for republishing it is not a sufficient justification.

It is one thing to have a public database available that lets me look up whether the neighbor I am feuding with might have a gun permit. It is quite another to publish the names and addresses of all my neighbors who own guns. The decision lacked a rationale. It was what we in the business call “b matter” in search of a lead.

”My first reaction was, why are they doing this? What is the purpose?“ asked Leonard Downie Jr., the former executive editor of The Washington Post who now teaches at Arizona State University’s Walter Cronkite School of Journalism and Mass Communication. “You have to have a very high standard when you publish the addresses of people to begin with, even though those are public.”

(The editor of The Journal News declined any further comment, but the paper’s publisher and president told my colleague Christine Haughney that she supported the publishing of the data.)

But if a public need is not being met, a public appetite certainly is. Newspapers and various Web sites are full of real estate records, crime reports and marriage applications, all of them public, and all of them published with an understanding that we are nosy looky-loos.

Entire print and Web businesses are built on the publication of mug shots, which may be unseemly, but is perfectly legitimate and, speaking from personal experience, very compelling content.

In fact, in trendy journalistic circles, data is all the rage. The last presidential election seemed to be all about the data, with battles breaking out over polls and projections as much as the policy issues. Much of it is exciting and creates transparency, but data needs to be looked after and shaped in the same way that news articles are.

HomicideWatch.org, an independent database of murders in our nation’s capital, has just announced a partnership with The Chicago Sun-Times. This fall, the Knight Foundation, a source of financing for journalistic innovation, put its money behind big data, supporting applications that use data to enhance maps, open up elections and make census results more accessible.

Developers from The Washington Post and The New York Times are working on a crowd-sourced database called Open Elections, intended to create a standardized, linked set of data about elections.

Meanwhile, news organizations are using data to report, to decide which stories to pursue and to discern which areas of coverage are attracting readers. We write stories about Big Brother infiltrating our lives, but sometimes we serve as his wingman.

“Even big, open-sourced data companies like Google make it harder to find your address or your phone number to protect your privacy, to some extent,” said Nate Silver, who runs the FiveThirtyEight blog at The Times. “If something is public in theory, like this database was, it will become public in practice eventually. But I still think that you have to think about the implications and social costs of publication.”

Another thing about data is that it doesn’t necessarily lie, but it doesn’t always tell the truth either. The data on gun permit holders was extracted from various historical records. It was a list of people who had applied for permits at a certain point in time who might or might not have followed up and obtained a gun.

“The United States Census is out of date on April 2, the day after it comes out,” said Matt Waite, a media professor who specializes in data at the University of Nebraska. “People die, people are born, people go to prison, but we still treat it as truth when actually it’s only as true as humans can make it.”

Like a lot of journalism professionals who make a practice of mining data, Mr. Waite said he was concerned that the criticism against The Journal News — there have been threats against people who work there — could actually hurt the cause of free speech, if it prompted officials to close off public records.

It will surprise no one to learn that the response to data disclosure depends a great deal on whose information is being made public. Since its founding more than three years ago, The Texas Tribune, a Web site in Austin, has made a mission of gathering the salary information of every public employee in Texas. That database has been wildly popular.

“From the very first day we started, we have believed in acquiring, cleaning up and presenting public information people need or want to know,” said Evan Smith, chief executive and editor of the site.

He says he gets livid calls from public employees or their spouses several times a week, but that he always reminds them that the benefits of being a public employee come with the knowledge that their salary is a matter of public record. (Mr. Smith’s salary of $315,000 a year is public because “we believe that sunlight and transparency is a great disinfectant.”)

This week, the site — which, speaking of disclosure, has a content partnership with The Times — will use a combination of public statements and its own reporting to publish a data application that will let visitors examine the personal financial interests of the 181 members of the Texas Legislature.

Plenty of people will be peeking in, partly out of prurience, but also because they want to know whose interests are being voted up or down in the coming session.

That exercise sounds very different from plopping a list of possible gun owners on a Web site. We live at a time when data of all kinds can be unleashed with very little friction; part of the value of the news business comes from making sense of it all. When we push the button on something, we expect people to pay attention. We should make sure we are pushing that button for the right reason.

Article source: http://www.nytimes.com/2013/01/14/business/media/guns-maps-and-disturbing-data.html?partner=rss&emc=rss

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