August 31, 2007

Economic Reports Generally Good, Old Media’s Take Generally Dismal

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government — Tom @ 10:51 pm

The week had a gusher of economic news, and most of it was favorable:

  • Thursday, 2nd Quarter Gross Domestic Product (GDP) was revised sharply upward to 4.0% from July’s initial estimate of 3.4%; the final GDP number for the second quarter comes out in late September.
  • The most comprehensive quarterly housing report issued, from the government’s Office for Housing Enterprise Oversight (OFHEO), showed that home prices nationwide increased ever so slightly during the 2nd quarter, and were 3.19% higher than a year earlier. That year-over-year result is greater than inflation during the same period.
  • Factory orders (HT WoMD’s Blast) increased 3.7% in July.
  • Consumer spending rose by 0.4 percent in July (HT WoMD’s Blast), double the June increase, while incomes rose by 0.5 percent, the best showing in four months.
  • The only really bad news I can think of at the moment: Consumer confidence took a hit in two different reports during the week (here and here).

Well of course consumer confidence was due for a hit. With the press, especially Time Magazine, working overtime to make the housing situation look like the crisis of the century, it’s a wonder that anyone’s getting out of bed to face the day.

Martin “Yeah, But” Crutsinger of the Associated Press also dished out his usually doses of cold water in his report on consumer spending. Here are examples:

Consumers returned to the malls in July after taking a breather in June, although worries about the future could make the rebound short-lived.

….. However, economists cautioned that the July increases could be temporary given recent weakness in consumer confidence caused by a prolonged slump in housing and the past few weeks of financial market turbulence.

….. The worst slump in housing in 16 years has already slowed economic growth and the worry is that if the fallout becomes severe enough, it could push the country into a recession. Already economists are forecasting that overall growth, which rebounded to a strong 4 percent annual rate in the spring, will slow in the current quarter to around 2 percent and could fall below 2 percent in the final three months of the year.

….. The 0.5 percent increase in incomes in July was the best increase since a 0.8 percent jump in March. But there are worries that the slowing economy could hurt job creation in coming months.

….. The 0.4 percent rise in consumer spending was the best showing since a 0.6 percent gain in May. However, if incomes falter and confidence sags, those gains could quickly evaporate.

It’s hard not to think that there’s just a little bit of hope for bad times in Crutsinger’s prose.

Cross-posted at

ODP’s, and OSU’s, Thought Police, and Megan Pappada

Filed under: Education,Taxes & Government — Tom @ 4:51 pm

More Links Coming Later. Sept. 1 – Links and a few additional linked items, have been added to the original post.

There are a few things I’ve been meaning to say about the Megan Pappada situation.

First, Ms. Pappada probably didn’t write the headline for her OSU Lantern letter (“More Minorities Will Create Problems”). The headline doesn’t reflect the substance of her letter in any way shape, or form. The problems she wrote of were reverse discrimination, segregated minority housing, and, most importantly, the wide disparity in graduation rates. Take your pick — The Lantern headline writer was either ignorant, or deliberately provocative.

Second, I don’t recall it being mentioned or excerpted yet, but perhaps it has been: The disparity in graduation rates documented in the news item in the previous week’s OSU Lantern by Professor Boris Mityagin — the item that prompted Pappada to write her letter — was pretty stark:

Mityagin noted OSU’s graduation and retention rates. In 1999, he said, the six-year graduation rates for white students was 57.6 percent and for black students was 37.2 percent.

Mityagin said this data could mean blacks are being discriminated against by OSU instructors, so they succeed less in the classroom.

On the other hand, it could also mean the admission policies and practices at OSU give blacks an unfair advantage, thereby enrolling less qualified applicants whose lack of skills and preparation for college-level work translate into low graduation rates.

Nobody can reasonably believe that the discrimination option carries any validity on a college campus. If anything, it’s more likely that profs were at the time, and still are, giving minority students the benefit of the doubt. In certain instances I’ll allow that it’s understandable and defensible, as it is with anyone who tries to help a struggling student — but please, the discrimination card was bogus then, and it’s bogus now.

So there’s little doubt that the second option, which is saying that unqualified minority students were being admitted and set up for in essence a high probability of failure, is what was occurring then, and what is likely still occurring at schools throughout the country.

What’s striking — no, tragic — is that those who support more lenient minority admissions don’t seem to mind high minority failure rates as long as they meet their freshman admissions quotas. Tragic, because unprepared and underqualified minority students who were not ready for college were, and probably still are, being thrown into a high-challenge environment they are not ready for. Many of them would have been better off going either to a less challenging school or attempting to get through less rigorous two-year programs first.

What’s doubly tragic is that those who point out the obvious are tarred with the “R” word — as I suppose yours truly might be. But what’s more racist in result — advocating alternative methods for each person to reach their full potential, or setting up people for failure?

The bottom line: Pappada at age 18 was less than eloquent, but absolutely right about the implications of the graduation disparities. More qualified students were, and probably are, being shut out from their first choice(s), in favor of students who couldn’t cut it. Nationwide acceptance of this situation as the norm for a sufficiently long time is a recipe for societal mediocrity and stagnation.

Third, I have to assume that if what Ms. Pappada wrote at age 18 in a letter to a campus newspaper is sufficient to disqualify her from a position in the Ohio Democratic Party (ODP), then what Hillary Clinton did, said, and wrote at Wellesley, her commencement speech, and her role in “monitoring” the 1969 New Haven Nine trial, are all fair game when comprehensively evaluating her qualifications for the nation’s highest office. Right?

As to Todd Hoffman and the ODP, the fact that, as I understand it, Mr. Hoffman apparently remains an employee in good standing in light of his, uh, record and the harsh treatment of Ms. Pappada is beyond farce.


UPDATE, Sept. 1: Jill, if you’re out there — I agree that ODP should have gone Googling before making their hiring decision. But do you agree that Ms. Pappada deserved the boot?

UPDATE 2, Sept. 2: One who articulates the argument better than I is Walter “Black by Popular Demand” Williams. In early 2002, Williams cited nationwide evidence that closely reflects what Prof. Mityagin pointed to as the case at Ohio State, and how the passage of California’s Prop. 209 had made things better, not worse, for minority students –

From the evidence that I see, civil-rights leaders, white liberals and college administrators seem to be more concerned with black student enrollment rates and the heck with whether they graduate. Black students are simply tools to keep government agencies, black politicians and civil-rights organizations off their backs or to make them feel good.

You say, “What’s the evidence, Williams?” Nationally, only 35 percent of black freshmen, compared to 60 percent of white freshmen, graduate; moreover, those who do graduate have grade point averages considerably lower than their white peers.

….. University of San Diego law professor Gail Heriot sheds a bit of light on this issue in her article “The Politics of Admissions in California” in the Fall 2001 issue of Academic Questions. California’s Proposition 209 ended racial admissions quotas. As a result, minority student admissions at UC Berkeley, California’s flagship university, fell. What went unnoticed in all the hand-wringing was that at less prestigious, but respectable, California universities minority enrollment posted impressive gains. Black students were simply being admitted to universities where their academic credentials were more in line with their fellow students. For example, at UC San Diego, in the year before Proposition 209′s implementation, only one black freshman had a GPA of 3.5 or better — a single black honor student in a class of 3,268 — in contrast to 20 percent of white students with a 3.5 GPA.

Was this because there were no black students capable of doing honors work at UC San Diego? Certainly not. Those who might have been on the honors list at UC San Diego had been recruited, and became failures, at California’s flagship universities: Berkeley, and UCLA. Proposition 209 has changed UC San Diego; no longer are black honor students a rarity. In 1998, a full 20 percent of black freshman could boast of a 3.5 GPA.

Somebody please explain to me why what Williams just described is not a gratifying result.

Porkopolis (Unfortunately) Vindicated: New Orleans Is a Disaster-Relief and Now Ongoing Quagmire

Filed under: Economy,MSM Biz/Other Bias,Taxes & Government — Tom @ 9:52 am

SOB Alliance member Porkopolis was surely among the first to predict that Katrina relief for New Orleans would be an unconscionable boondoggle. Go to his drop-down near the top right for the sad history contained in his plethora of posts.

Larry Kudlow has the eye-popping numbers, appropriately harsh sentiments, and an important implication (italics are his, bolds are mine):

….. everyone seems to be saying New Orleans needs more cash.

Here’s a pop quiz: How much money has Uncle Sam spent on New Orleans and the Gulf region since Hurricane Katrina ripped the place apart?

I’ll give you the answer because you’ll never guess it. The grand total is $127 billion (including tax relief).

….. Huh?

This is an outrage. The entire GDP of the state of Louisiana is only $141 billion, according to the U.S. Department of Commerce. So the cash spent there nearly matches the entire state gross GDP. That’s simply unbelievable. And to make matters worse, by all accounts New Orleans ain’t even fixed!

….. Perhaps all this money should’ve been directly deposited in the bank accounts of the 300,000 people living in New Orleans. All divvied up, that $127 billion would come to $425,000 per person!

….. Meanwhile, according to an article by Nicole Gelinas at the Manhattan Institute, New Orleans has earned the distinct honor of becoming the murder capital of the world. The murder rate is 40 percent higher than before Katrina, and twice as high as other dangerous cities like Detroit, Newark, and Washington, D.C.

Think of this: The idea of using federal money to rebuild cities is the quintessential liberal vision. And given the dreadful results in New Orleans, we can say that the government’s $127 billion check represents the quintessential failure of that liberal vision.

….. Right from the start, New Orleans should have been turned into a tax-free enterprise zone. No income taxes, no corporate taxes, no capital-gains taxes. The only tax would have been a sales tax paid on direct transactions. A tax-free New Orleans would have attracted tens of billions of dollars in business and real-estate investment. This in turn would have helped rebuild the cities, schools, and hospitals. Private-sector entrepreneurs would have succeeded where big-government bureaucrats and regulators have so abysmally failed.

This is the real New Orleans Katrina story. It’s a pity that the mainstream media isn’t writing about it.

What Old Media is writing instead is exemplified in this horrendously biased Financial Times article about how “the federal government has not fulfilled its promises.” Zheesh.

Kudlow hyperventilated a bit when he went into his $425,000 per-person rant, and areas outside of New Orleans were also devastated. Nevertheless, somebody, anybody, please tell me –

  • If what is surely an amount that is still over $100 grand per affected person (not household) isn’t enough, how much is?
  • When will state and local leadership in New Orleans and Louisiana start taking responsibility for completing the recovery?

Positivity: Great-granny becomes oldest to earn master’s

Filed under: Positivity — Tom @ 6:00 am

From Canberra Australia:

94-year-old Aussie who quit school at 12 earns degree in medical science
Updated: 10:34 a.m. ET Aug 2, 2007

A 94-year-old Australian great-great-grandmother who quit school at 12 is said to have become the world’s oldest person to earn a university master’s degree.

Medical Science Master’s Degree graduate Phyllis Turner, from Australia’s Adelaide University, began studying for her postgraduate degree at age 90 and received her award this week.

“I feel very very happy after five years of study, but sorry that I am just a little bit immobilized,” Turner, who uses a walking stick, told Australian papers.

Degree supervisor Professor Maciej Henneberg said he had been amazed by Turner’s energy and dedication to study.

‘A lively mind’

“Mentally she was like any other student. You couldn’t tell her thinking, her enthusiasm and her interests apart from somebody who was 25. She has a lively mind,” he told Reuters.

“She used to wake up at 5 a.m. in the morning and think about something, and then ring to say she wanted to check on it.”

Go here for the rest of the story.

August 30, 2007

OFHEO: 2nd Quarter Home Prices Up 0.08% during Quarter, 3.2% from Year-Ago Quarter

Filed under: Economy,Taxes & Government — Tom @ 12:54 pm

The latest Office of Federal Housing Enterprise Oversight (OFHEO; report for the second quarter of 2007 is out (very big PDF). It shows that nationwide home prices increased a puny 0.08% in the second quarter, and that they are up 3.19% nationwide from the second quarter of 2006.

Bubble, schmubble. For a bubble to exist, prices as a whole have to be going down — a lot. They’re not even, again as a whole, going down at all.

The second quarter’s 3.19% year-over-year (12-month) appreciation is greater than inflation during the same period of 2.7% (the result of dividing the CPI-U of 208.352 for June 2007 by 202.9 as of June 2006; go to the very bottom at this link). That 3.19% is higher than the following previous year-over-years since 1993 (see page 5 of the report):

  • 1997Q2 – 3.00%; 1997Q1 – 2.29%
  • 1996Q4 – 2.61%; 1996Q3 – 2.53%
  • 1995Q2 – 2.16%; 1995Q1 – 0.74% (!)
  • All four quarters in 1994 – 2.71%, 2.20%, 1.86%, and 0.84% (!)
  • All four quarters in 1993 – 1.06%, 2.13%, 1.71%, and 2.08%

Most of the above appreciation figures from 1993-1997 trailed inflation. From the same inflation link: December-to-December inflation was 2.7%, 2.7%, 2.5%, 3.3%, and 1.7% in 1993 through 1997, respectively. Some of these appreciation percentages trailed inflation by well over a point, in a couple cases by almost two.

Additionally, 2007′s admittedly tiny single-quarter nationwide appreciation of 0.08% during the second quarter is indeed the lowest since early 1994 — which was negative (-0.23%), as was the first quarter of 1993 (-0.11%).

The point of bringing up smaller numbers from the past is to get to this question: How many times during 1993 – 1997 did you hear about a nationwide housing “bubble,” “crisis,” or “meltdown”? So why are still-better numbers than we saw during those years leading to those characterizations?

That isn’t to deny that there aren’t some serious issues to deal with, but the bubble-crisis-meltdown talk in the face of numbers that are on the whole still positive makes me think that there are a lot of people who would like to succeed in talking the economy down, and are trying to capitalize on the housing-market situation to do just that.

Jumpin’ GDP: 2nd Quarter Growth at 4.0%

Filed under: Economy,Taxes & Government — Tom @ 9:23 am

That’s REALLY More Like It.

Here are excerpts from the BEA press release (bold is mine):

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 4.0 percent in the second quarter of 2007, according to preliminary estimates released by the Bureau of Economic Analysis.

….. The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE) for services, exports, nonresidential structures, federal government spending, state and local government spending, and equipment and software that were partly offset by a negative contribution from residential fixed investment. Imports, which are a subtraction in the calculation of GDP, decreased.

The acceleration in real GDP growth in the second quarter primarily reflected a downturn in imports, upturns in federal government spending and in private inventory investment, accelerations in exports and in nonresidential structures, and a smaller decrease in residential fixed investment that were partly offset by a notable deceleration in PCE.

The real change in private inventories added 0.21 percentage point to the second-quarter change in real GDP, after subtracting 0.65 percentage point from the first-quarter change.

The bolded items appear to reflect at least a bit of the inventory bounceback I was hoping for after last month’s 3.4% announcement.

Larry Kudlow’s clan almost called it two weeks ago:

Economists David Malpass and John Ryding at Bear Stearns believe second-quarter GDP will be revised up from 3.4 percent to over 4 percent.

Well, they don’t have the “over” part in place yet. But one revision remains.

Keep in mind that the overall economy grew at 4% during the second quarter despite the residential construction drag (down 11.6% on an annualized basis during the quarter). It’s not unreasonable to characterize the rest of the economy as “on fire.” Nonresidential construction (up 27.7%) is going bananas, and I have heard real-world anecdotes to back that up.

Positivity: Girl meets heroes who saved her life 10 years ago

Filed under: Positivity — Tom @ 5:59 am

From Brampton, Ontario, Canada:

With a smile and a huge slab of cake, 10-year-old Taylor Nicole Webb finally got to meet the heroes who tickled her feet and saved her life.

Taylor was just three weeks old in January 1997 when she stopped breathing and a 911 call for help by her mom Lori Ottaviano brought four Brampton firefighters into their lives.

Capt. Bert Jeffries, and firefighters Luis Emibio, Dan Rowland and Brian Drake, who retired three years ago, worked together to revive Taylor and kept her alert until Peel medics arrived on scene to apply their expertise to keep the tiny heart beating on its own.

With a red firefighter’s helmet and a white icing cake saying “A special thanks to my heroes,” Taylor offered her thanks in the shy way a kid would, but her mom shed tears, emotional as she recalled what could have been if the four didn’t answer the call.


“I just wanted you guys to meet Taylor,” Ottaviano told Jeffries, Rowland and Emibio. “This is a living, breathing example of what you guys do on a regular basis and I can’t thank you enough.”

“Anytime we can save a life, it’s very special, very rewarding.” Jeffries said.

“It’s nice to see you smiling,” he said to Taylor.

He said it was the first time in his 29 years on the job someone sought him out to say thanks. “That I enjoy very much,” Jeffries said.

Go here for the rest of the story.

August 29, 2007

Patrick Poole’s Must-Read on Megan Pappada and Todd Hoffman

Filed under: Economy,Privacy/ID Theft,Taxes & Government — Tom @ 2:34 pm

The SOB Alliance’s newest member, who in addition to running Central Ohioans Against Terrorism, is also a writer, has penned the definitive piece on the PC Police/Ohio Democratic Party ouster of Megan Pappada.

I’m late to this one (unlike RAB), and there’s not much more to say. Nevertheless, there are a few overlooked items I will comment on tomorrow Friday.

A Convenient First Two-Paragraph Rewrite for David Cay Johnston’s August 21 New York Times Report on ‘Income Growth’

Now that it is only available behind the said-to-be-crumbling TimeSelect firewall, David Cay Johnston’s error-laden report on income growth is no longer visible to much of the outside world.

The abstract that remains is interesting, to say the least:

DISPLAYING ABSTRACT – Government data show that Americans earned smaller average income in 2005 than in 2000; average income was $55,238, nearly 1 percent less than $55,714 in 2000; total adjusted gross income was $7.43 trillion, up 3.1 percent in 2000 and 5.8 percent from 2004; Citizens for Tax Justice says policies favor rich, citing calculations that show 28 percent of investment tax cut savings went to those who made $10 million or more

As stated numerous times already, “what Americans earned” is quite often quite a bit more than what they report on their tax returns as adjusted gross income (which as also stated numerous times already, is really the IRS’s “Adjusted Gross Income Less Deficit”). The abstract leaves the impression that the $55,000-plus figures above represent gross pay. Of course, they don’t.

More basically, and as a public service for future researchers, yours truly has chosen to rewrite Mr. Johnston’s first two paragraphs to more accurately convey the reality of what the IRS data, imperfect as it is for this intended purpose, tell us, and to provide a helpful chart to support the revision:

(Johnston’s original)

Americans earned a smaller average income in 2005 than in 2000, the fifth consecutive year that they had to make ends meet with less money than at the peak of the last economic expansion, new government data shows.

While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1 percent less than the $55,714 in 2000, after adjusting for inflation, analysis of new tax statistics show.

(BizzyBlog revision)

New tax statistics released by the Internal Revenue Service show that Americans had more money left after paying federal income taxes (FIT) in 2005 than in 2004. 2005 was also the first year in which the average US taxpayer had more money to pay other income taxes and to otherwise make ends meet than in 2000, the peak of the last economic expansion.

Those results were obtained by subtracting federal income taxes from what the IRS refers to as “Adjusted Gross Income Less Deficit.” After falling 7% on an inflation-adjusted basis during 2001 and 2002, the money the average US taxpayer had after FIT, but before paying Social Security and state and local income taxes, rose 10% during 2003-2005, reaching an all-time high in real terms:


That wasn’t so difficult, was it? Yes, the first two paragraphs are about 50 words longer than Johnston’s first two. But he could have eliminated 50 words of painful minutiae later in his report, and we wouldn’t have missed a thing.


UPDATE: At least the abstract from the Times borders on being coherent. Here’s the ProQuest abstract (not available without library card access) of Johnston’s report:

The White House noted that during the same five years, income tax rates have been cut under a series of laws sponsored by President [Bush]. Mr. Bush has delivered a steady stream of upbeat assessments of the economy, saying last fall, for example, “I’m pleased with the economic progress we’re making.”

He said the tax savings at the top, combined with lower average incomes after five years, “shows that trickle down doesn’t work.”

Yikes. The abstract clearly indicates that “he” is President Bush (who else could “he” be?) saying something totally contradictory. The trouble is that “he” is really Robert S. McIntyre, the director of Citizens for Tax Justice. Library archive researchers are clearly being poorly served.


Previous posts:

  • August 28 — Updates: David Cay Johnston’s New York Times “Income Growth” Story
  • August 27 — In Case You Missed Yesterday’s Post on Last Week’s NYT Income Growth Article
  • August 26 — Top Six Errors Committed by David Cay Johnston and/or the New York Times in Their Income Growth Report
  • August 25 — Update: New David Cay Johnston Comment at Tuesday’s Post on His NYT Report
  • August 21 — New York Times Twists Data to Make Great Personal Income News Appear Awful
  • August 21 — Source Data Update Post

Positivity: A Family Celebrates the Life of a Kidney

Filed under: Positivity — Tom @ 5:58 am

From Ventura, County, California:

Sunday, August 26, 2007

Denice Lombard is 53. Her kidney will turn 79 in October. That’s because, when Lombard was 13, her then-38-year-old dad saved her life by donating one of his kidneys.

“I’ve now had his kidney longer than he had it,” Denice said.

On Thursday, Lombard and her dad, Ted Lombard of Ventura, celebrate the 40th anniversary of the transplant that saved her life.

“That’s wonderful,” said Dr. Gabriel Danovitch, director of the kidney transplantation program at UCLA Medical Center. “At 40 years, that’s probably one of the longest-functioning (transplanted) kidneys in the country.”

Denice lives in Washington, D.C., now, so Ted will travel to the East Coast to be with his daughter and his other kidney for the anniversary.

Ted, who shares Denice’s blood type, donated his kidney to Denice in 1967 to save her from her twin’s fate. Denice’s twin, Diane, died in 1961 at age 7 from a congenital kidney disease that Denice also inherited.

“I don’t care how many people are around you,” said the twins’ mother, Anne Lombard, 73. “It’s still a lonely journey when you lose somebody you love.”

Ted and Anne still are brought to tears over the ordeal that led up to the organ donation that has so far given Denice 40 more quality years of life.

“By all means, I’d do it again,” Ted said, trying to steady his voice over tears. …..

Go here for the rest of the story.

August 28, 2007

Couldn’t Help But Notice (082807)

Last week the Congressional Budget Office’s forecasters said what Brian Wesbury (related link has been removed) and BizzyBlog (near the end of this post) have been saying for a while:

The deficit for the budget year that ends Sept. 30 will be about $158 billion, or $90 billion less than the deficit recorded for 2006, the nonpartisan agency reported.

….. Higher-than-expected tax revenues are the main reason for the improved numbers, the office said.


James Lewis, at American Thinker, on last week’s Rove resignation reax, and much more, including a related history lesson:

Rove was quoted in the Wall Street Journal as saying, “I’m not going to stay or leave based on whether it pleases the mob.”

Not just one, but two separate Washington Post staffers split the peaceful summer night with howls of outrage. Eugene Robinson and Monica Hesse tore at Mr. Rove’s flesh in two WaPo columns, just for using that little word, “mob.”

Their united outrage proved his point: They are a mob. Funny, because the Media Mob commonly describes itself in just those terms: as “sharks” looking for “blood in the water” to start a “feeding frenzy.” “What bleeds, leads.” Sounds like a classic lynch mob, doesn’t it? But the victims aren’t supposed to answer back. They must hemorrhage silently, while the drooling newshounds bay at the moon to celebrate yet another kill. Well, Mr. Rove didn’t play along this time.

In 1991, Supreme Court Justice-to-be Clarence Thomas struck back with the words “high-tech lynching” to describe the smears hurled at him by the liberal media to kill his chances at the Senate Judiciary Committee. For a few days the white Media Mob froze in its tracks. Perhaps at that magic moment it recognized itself as a mob in a Black man’s eyes. Because Justice Thomas was born in the Jim Crow South, and he knew exactly what he was talking about when it came to lynch mobs. Clarence Thomas’ nomination passed the Committee within days of his verbal counter-attack. Then the Media Mob just fell back into its old ways.

The Big Media are a mob. That should be Politics 101. They are a tiny, unchecked power elite, locked into life-long careers in the remnant of a crumbling monopoly over America’s national conversation.

Interesting. When I saw the quote, I thought “the mob” was the left-wing blog fringe, not Old Media. Maybe they’re one and the same now.


Ohio not-secret ballotThis is very weak.


Aw geez, not this stuff again:

Sarkozy still popular after 100 days as French economic woes loom
PARIS, Aug 22, 2007 (AFP) – French President Nicolas Sarkozy completes his first 100 days in office on Thursday still riding high in opinion polls despite disappointing figures on the economic front as he prepares to rev up reforms.

Earth to AFP: The French people are smart enough to know that Sarkozy’s budget and economy responsibility hasn’t started yet. So are you. Stop posturing.

Updates: David Cay Johnston’s New York Times ‘Income Growth’ Story (082807)

Income Schmincome: If you go to Randall Hoven’s American Thinker post that I discuss in the item following this one, you will see that he used the correct term found in the underlying IRS spreadsheets — “Adjusted Gross Income Less Deficit.” Those spreadsheets are the foundation for New York Times reporter David Cay Johnston’s August 21 report on ‘income growth.’

Hoven recognizes that “Adjusted Gross Income Less Deficit” is not the same as “Adjusted Gross Income.” I assume Johnston does, yet he managed not to include the correct term even once in his 800-word article.

Beyond that, he only used “adjusted gross income” once in the third paragraph, while using “income” or incomes,” by my count, at least 17 other times (not including the occasions where he properly described “investment income” and “income tax” in proper context).

Now listen up: Even aside from using a technically incorrect term, there’s little doubt that Johnston’s lead sentence, which begins with “Americans earned a smaller average income,” along with his use of “income” and “incomes” five separate times in the first three paragraphs of his report before introducing the term “adjusted gross income,” causes the average reader to think that the report is about “gross income” — what most people understand as gross pay (“earnings” or “wages” on many pay stubs). Among many other things, “gross pay” is before any 401(k), pretax IRA, and other pretax retirement plan contributions, and before pre-tax medical premium deductions. “Gross pay” is a far, far cry from “adjusted gross income,” with or without the “less deficit.”

Additionally, Johnston does not describe the $55,000-plus average annual amounts from 2000 and 2005, the ones that form the basis for the story’s headline (“2005 Incomes, on Average, Still Below 2000 Peak”) as “adjusted gross income.” In fact, those numbers are called “average income” in the report’s second paragraph, before readers ever see the term “adjusted gross income” employed. People who read Johnston’s third paragraph, where he finally uses the term “adjusted gross income” to report total AGI of all taxpayers ($7.43 trillion), might come to understand that the entire article is about “adjusted gross income.” But having been conditioned with “earned” in the first sentence and “income” or “incomes” five times previous to the first appearance of “adjusted gross income,” there’s a fairly good chance that they will not, seeing the $7.43 trillion as an aside (telling themselves “he used ‘income’ up to this point, and just invoked ‘adjusted gross income’ — so this $7.43 trillion must be something different from what he’s been talking about thus far.”). Readers who don’t get past the second paragraph won’t have a clue that the article is about AGI unless they are in that very small group of people with specific knowledge of nationwide average gross incomes and AGIs.

The failure to clearly convey the basis of average annual “income” used in Johnston’s report is a serious enough communication breach that I’m going to name it Error #7, adding it to the list of the six previously identified on Sunday morning. This breach clearly goes way beyond the failure to invoke “Adjusted Gross Income Less Deficit” instead of “Adjusted Gross Income,” which was flagged as Error #4 on Sunday.

Oh, in case you’re wondering, I have plenty of other errors in Johnston’s report that I could catalog. They are on reserve in case I feel the need to call on them and have the time.


Following the Progression: Randall Hove at American Thinker went into a separate criticism of Johnston, the. Hoven looked at average rates of tax paid on “Adjusted Gross Income Less Deficit” in various income ranges, found that the tax system is indeed “progressive” until you get to the the tippy-tippy top $5 million-plus and $10 million-plus categories, and added a bit of needed perspective:

If anyone should be complaining, it should those making between $1 million and $2 million complaining about those making more than $10 million. I’ll let that 0.2% of all tax filers fight that out among themselves.


Shameless Plug 1: Tom Finnigan at Heritage Foundation’s Policy Weblog noted yours truly’s post, and also questioned the use of AGI as the basis for comparing incomes.


Shameless Plug 2, with qualification: The Boston Herald had a brief editorial on the NY Times story that included a reference to yours truly’s post. I e-mailed the Herald and informed them that, as briefly described here (in the “10 PM, August 25″ paragraph) and incorporated into the original August 21 post, the original $170 Earned Income Tax Credit effect is best seen as a $132 effect caused by the EITC and other available credits. The rest of the editorial is just fine.


Cricket-Chirp Report: Up to and including Saturday evening, Mr. Johnston sent me five e-mails relevant to the matter at hand. In one of them, he characterized as “egregious” my $170-per-filer error (which, because of offsets, has since been reduced to $38 per filer), along with my incorrect recall as to what tax credit was liberalized when.

I know full well that at my “Top Six Errors” post on Sunday morning, I put down the ground rule that Mr. Johnston couldn’t post a comment at BizzyBlog until he could refute all six errors. Perhaps that was intemperate and snippy, but forgive me for taking umbrage to Johnston’s e-mail dare (spelling error corrected) to:

Show some integrity and forthrightly tell your readers the truth: that your numbers and facts were wrong (not to mention utterly irrelevant to my report).

Six, and now seven, quite relevant errors later, I have indeed told my readers the truth, thank you very much.

Regardless, early Sunday afternoon, I noted at the post that the e-mail box remains open for cherry-picking if Mr. Johnston to attempt refute his (and his paper’s) errors one by one.

I have not received an e-mail from Mr. Johnston since Saturday evening. If he wants to call the game trailing 7-2, that’s fine by me, and quite understandable (this assumes that all errors are created equal, which they are not; collectively, Johnston’s are humdingers that undermine and refute his entire report). If he wants to get credit for the his paper’s correction of $7.43 billion to $7.43 trillion (even though it should have been rounded to $7.42 trillion), then I get credit for my “I was wrong; I am sorry” statements on my errors. Fine — Now Johnston’s trailing 6-to-zip.

Anyway, given the batters I have in reserve, I’m afraid we’d have to invoke the “mercy” rule should we continue.

Positivity: Boy Honored for Heroic Rescue

Filed under: Positivity — Tom @ 6:54 am

From Baltimore County, Maryland:

He saved young neighbor from drowning; ‘He was our guardian angel’
8:54 PM EDT, August 24, 2007

When his neighbors spotted him in the pool without his life jacket and without his parents, 2-year-old Max Woods was thrashing in the water and headed toward the deep end.

Pamela Boyle dropped a bowl she had been holding, and started screaming, “Oh my God. Go get him.”

Patrick Boyle hopped over the fence, rushed through the gate to his neighbor’s pool and jumped in with his clothes on to grab the toddler — just in time.

The rescue earned Patrick a hero pin Friday from Baltimore County Executive James T. Smith Jr. The quick thinking and bravery would be extraordinary in anyone, Smith noted.

But the thing about Patrick is that he’s 10 years old.

“There aren’t words,” said a still-emotional Jennifer Woods, mother of Max, during the ceremony Friday in Towson. “He was our guardian angel.”

Patrick wasn’t supposed to be swimming that June day because he had an ear infection. But he was outside his Parkville home, with his 9-year-old brother, Shawn, and 7-year-old sister, Mikayla, who were swimming in their above-ground pool, which gives them a view of the neighbor’s in-ground pool.

Shawn first noticed Max in the pool, without his parents, and began yelling to his mom, Pamela Boyle. But Patrick had hopped the fence by the time she got out of the house, screaming, “Get Maxie.”

Go here for the rest of the story.

August 27, 2007

Non-Posting Alert

Filed under: General — Tom @ 5:49 am

A business priority dictates that there will be no more posts today. I also will have little, if any, time to check out or review comments.

In Case You Missed Yesterday’s Post on Last Week’s NYT Income Growth Article ….

….. This one will paint the picture (yesterday’s post is here):

Here are the “Adjusted Gross Income” (AGI) numbers that form the basis for what David Cay Johnston of the New York Times reported on August 21 (the article is now entitled “2005 Incomes, on Average, Still Below 2000 Peak”):


Those numbers really are technically not Adjusted Gross Income. Instead, they are what the IRS calls “Adjusted Gross Income Less Deficit.” See the previous posts listed below for a discussion of the terms. See the Update below for a link to an IRS publication containing much more detail.

Now here is a year-by-year record of average incomes after subtracting Federal Income Tax (FIT) and the Alternative Minimum Tax (AMT):


Yesterday’s post specifically shows how “‘Average AGI Less Deficit’ Minus FIT & AMT” were calculated for 2000, 2004 and 2005. The calculations were done the same way for other years shown. I did not subtract the Earned Income Tax Credit, though I defensibly could have.

The bottom line is this: The core contention that leads Johnston’s report, namely that “Americans earned a smaller average income in 2005 than in 2000, the fifth consecutive year that they had to make ends meet with less money than at the peak of the last economic expansion….” is false. The second chart deals more closely with what “they had to make ends meet,” and shows “Disposable Income” (*) as $1,116 (about 2.4%) higher in 2005 than it was in 2000 — $48,163 vs. $47,047. The first chart, based as it is on “Adjusted Gross Income before Deficit,” reaches a false conclusion that Americans’ disposable incomes (what Americans “had to make ends meet) were $477 lower in real terms in 2005 than they were in 2000, because it did not deal with the vast differences in income taxes paid in the various years, and thus does not directly relate to “what (Americans) …. had to make ends meet.”


(*) – “Disposable income” is in quotes because Social Security and state/local income taxes should also be subtracted. Because these taxes have not gone up that much in real terms (certainly not by enough to wipe out the $1,116 “disposable income” difference above between 2005 and 2000), doing so would not affect the overall conclusion.


The false conclusion, and the use of “AGI Less Deficit” instead of a measure more closely approximating after-tax (i.e., disposable) income, are just two of six errors in Mr. Johnston’s report I noted yesterday. There are other substantive errors that I didn’t have time to detail.

There is much more at these previous posts:

  • August 26 — Top Six Errors Committed by David Cay Johnston and/or the New York Times in Their Income Growth Report
  • August 25 — Update: New David Cay Johnston Comment at Tuesday’s Post on His NYT Report
  • August 21 — New York Times Twists Data to Make Great Personal Income News Appear Awful
  • August 21 — Source Data Update Post


UPDATE: For those wondering about some (but by no means all) of the other “substantive errors” in Johnston’s report, the IRS publication apparently entitled “Individual Returns 2005″ (a very large PDF that I have uploaded to my host for convenient reader access) contains a rundown of and a great deal of explanation behind what the IRS includes in “Adjusted Gross Income Less Deficit” at pages 14-20. My cursory review of this info indicates that there are at least several very significant not-included income items that should be added in if one really intends to report, as Johnston’s Times story did, on year-over-year changes in comprehensive incomes earned or received by Americans.