Market assumptions

Between yesterday's Dow surge and today's small drops, it is important to remember this little gem from Dan Gross about the stock market being a public policy quality assessment instrument:

The market is made up of all types of participants: rational, irrational, some focused on the past, some on the future, some obsessed with Washington, others with China. In October 2007, with the Dow at 14,000, did the market "know" a recession was about to start and that a financial tsunami was about to hit? Um, no. Of course, over time the market does respond to fundamentals like earnings and dividend payments. But in the past half-dozen months, the fundamentals have been fundamentally unsound. The S&P 500 could be at around 700 because Obama is a Commie who wants to destroy free enterprise. Or it could be at around 700 because that's roughly 15 times the index's estimated operating earnings per share.

And if anyone knows about the market, inside and out, it's Dan.

Embarrassing interviews have consequences

Jon Stewart's interview with Jim Cramer last Tuesday has, apparently, motivated a number of voices to call for change at CNBC. Sam Stein reports:

Building off of the momentum from last week, in which CNBC personality Jim Cramer was subjected to an embarrassing lecture by the Daily Show's Jon Stewart, the group is launching, alongside its letter, a website: http://fixcnbc.com/.

"Americans need CNBC to do strong, watchdog journalism -- asking tough questions to Wall Street, debunking lies, and reporting the truth," the letter reads. "Instead, CNBC has done PR for Wall Street. You've been so obsessed with getting 'access' to failed CEOs that you willfully passed on misinformation to the public for years, helping to get us into the economic crisis we face today. You screwed up badly. Don't apologize -- fix it!"

Considering that Cramer's show, in particular, went back to normal the day after the interview, this call may fall on deaf ears. I say "may" because, at the end of the day, I don't think Cramer was ever the problem (and the letter tacitly acknowledges this). In his show, Jim Cramer is not a journalist, he is a former hedge fund manager...an insider. CNBC, on ther other hand, touts itself as a news outlet. In other words, real change needs to occur in order for the network to fulfill this role in good faith, not on the set of Mad Money, but on that of the Squawk Box and The Call.

Newspaper filler

There is a difference between knowing something and talking like you know something. Some people are good at the latter. Andrew B. Hellinger shows us he is not one of them:

Initiatives to lure suburbia's residents into Miami's urban core need to be considered to maximize what development has already occurred and to prevent Miami from becoming an urban wasteland. Given the scarcity of local, state and federal funds, this will be a challenge for our civic leaders.

I emphasized the words above because they make the author sound like he is knowledgeable. I am going to say that its a bluff, because someone who actually knows about urban planning in Miami would know that something along those lines already exists. But there is nothing substantive in Hellinger's "view" about that plan, or Miami's Comp Plan, or the many, many other plans that are available to the public to read regarding Miami. If Herald editors are hard up for planning analysis, I'd suggest that they solicit fewer Hellingers and request more opinions from people in the know.

Cramer vs. Stewart

I don't like Troy Patterson's writing because I don't think it is very clear. As far as I am concerned, when someone name-checks Jürgen Habermas in a piece about "The Daily Show" it just alienates most people. Having said that, Patterson is pretty direct in describing John Stewart's argument from last night:

The notion was that the networks, being aware of a gap between image and reality that they had steadfastly refused to address in their coverage, had abdicated their journalistic responsibilities..."

I think that going any further than this wouldn't be helpful. It's easy for people on the left, like me, to suggest that CNBC had slipped into a propaganda outfit. It's easy to cynically assert that they did this to better accomodate the advertisers that their company depends on. These points are arguable. That they stopped serving as a good faith provider of news is not and that's damning enough.

VerSteeg's bad analysis

Deputy Editor of the Post Editorial Page, Jac Wilder VerSteeg, writes:

The drumbeat of "worse than economists expected" negatively affects the nation's psyche and further depresses the economy. If economists had been better at predicting just how bad things were going to be, things wouldn't have gotten as bad as they have.

What the economy needs, obviously, is economists who will start expecting that the economy will be much worse than economists expect. Only then can we expect the economy to get better.

Seriously? Economics is a social science. As with all sciences, there are disputes. The disputes in some areas of economics are particularly difficult since you can't easily conduct experiments in many cases. This leads to the use of historical data, with the problem being that historical data might include some variables that you are under (or over) accounting for. Hence, the difficulty in agreeing upon controversies within the discipline.

Disagreements, however, are not resolved with this "throw the baby out" line of thinking. And they are definitely not improved by lazy columnists who complain about vague job titles (such as "economist") without explaining the differences that exist within the universe of opinions within those titles. The internet helps those of us in the public interested in learning more (hello Dean Baker, Dani Rodrik, and Brad Delong), but of course some Post Editors have a problem with bloggers too.

Bai on political science

Reporter Matt Bai wrote a review (reg. req.) of a book called "The Myth of Digital Democracy", by Matthew Hindman. Bai writes that thesis of the book is that, "[a]ccording to Hindman, American politics and media, far from being democratized in any way, are still controlled by a relative handful of activists and gatekeepers." Now, I haven't read this book so I can't speak how accurately Bai describes the main topic within the book. I would like to take a second to note some statements about differences between political journalists and political scientists.

Bai says:

Academics who study politics often consider those of us who write about the field to be superficial, simple-minded and–the greatest indictment of all– unscientific. We interview three people in an Iowa diner and act as if we have penetrated the very soul of America. (Such allegations are, sadly, true enough.) Hindman’s book is permeated by just this kind of mild contempt for political journalists, who, in his view, have mindlessly extolled the democratizing virtues of the Internet while not possessing the basic intellectual skills necessary to quantify their assertions.

On the other hand:

[P]olitical writers don’t think so much of political scientists, either, mostly because anyone who has ever actually worked in or covered politics can tell you that, whatever else it may be, a science isn’t one of them. Politics is, after all, the business of humans attempting to triumph over their own disorder, insecurity, competitiveness, arrogance, and infidelity; make all the equations you want, but a lot of politics is simply tactile and visual, rather than empirical. My dinnertime conversation with three Iowans may not add up to a reliable portrait of the national consensus, but it’s often more illuminating than the dissertations of academics whose idea of seeing America is a trip to the local Bed, Bath & Beyond.

I emphasized the two sections about because I think that they point out a key issue. A democracy is not a sporting event. We need to treat it as an important sociological reality as opposed to a narrative that reads well. Furthermore, even in sports, the turn towards quantitative analysis leads to an increase in successful outcomes. I am not sure what the benefits are of denying the value of statistics in political endeavors. I am sure that David Plouffe could enlighten you on the benefits of accepting the value of statistics, though.

Look, math is hard. Statistical analysis is hard. Doing these things well can result in complicated, nuanced understandings that may be difficult to adequately describe in a newspaper. Demonizing the math, though, only leads Americans down a roads in which we understand the dynamics less and we rely on the media elite more. If the internet democratized anything, it was the political media landscape. Today, we don't have to rely on editors dictating what we need to know on the basis of what they think will sell more newspapers. Any additions to that small group of, potentially conflicted, information providers, be they minimal additions or not, is a good thing.

Things left behind

(ht Yglesias)
One of the goals of this blog is to attempt to be evidence-based. It's very easy to make statements, it's harder to make statements that are supported by research. As with all goals, I'm sure that I will fail, but it's important to try to ground what I say in verifiable work.

With that said, this bit of research confirms what readers might have already known:

[A] content analysis of leading conservative magazines shows that most have preponderantly failed to take pro-liberty positions on sex, gambling, and drugs. Besides many anti-liberty commissions, the magazines may be criticized for anti-liberty omission—that is, failing to oppose anti-liberty policies. Magazines investigated include National Review, The Weekly Standard, The American Enterprise, and The American Spectator.

An interesting side note is that this research comes from George Mason University, which is not exactly a liberal institution.