Budget: The Financial Times's Sloppiness
We should expect politicians to lie, or at least to make misleading statements, whenever they can get away with it. But we would normally expect the Financial Times to be careful with information (which is why I have been an addict to this newspaper for most of my life). An exception is their story of yesterday on president Joe Biden’s proposed budget (“Biden Proposes Big Tax Rises in Budget to Shave $3tn off US Deficit,” March 9, 2023):
According to the economic assumptions underpinning the budget, the White House expects the consumer price index to fall to 4.3 per cent in 2023 and 2.4 per cent in 2024 — a significant step down from its current 6.4 per cent level. The unemployment rate, meanwhile, is projected to rise to 4.3 per cent in 2023 and climb another 0.3 per cent in 2024 to peak at 4.6 per cent.
There was still no erratum or correction at 10:48 Eastern Time today, nearly 24 hours after the original publication online
The first sentence is simply false, or totally nonsensical. The consumer price index (CPI) is an index of the general price level. The index stood at at 296.797 in December 2022. It can never ever be 4.3% or 2.4% (contrary to the unemployment rate, reported in the second sentence, which is a percentage by definition). What the Financial Times means is that the consumer price index is expected to continue increasing by (a change) 4.3% in 2023 and 2.4% in 2024, but at a slower rate than the increase of 6.4% from January 2022 to January 2023. These percentages are the inflation rates of the CPI level. (More technically and precisely, they are the inflation rates as estimated by the changes in the CPI level.)
The Wall Street Journal did not commit this elementary error.
We should discount the possibility that the Financial Times journalists or their editor don’t know the difference between a level and a change, between the value of a variable and its first difference. Is it just very sloppy writing or editing, then? Note that replacing “to” with “by” in the first sentence is still incorrect, for inflation will continue to increase according to the government’s own assumptions. Errare humanum est, of course, but the Financial Times has accustomed its readers to higher standards.
I cannot find the same error in the government’s actual budget documents. So the Financial Times can probably not pretend that they just reproduced a government’s blurb without quotation marks, which would be at least as inexcusable anyway.
The elementary confusion between a variable’s level and its change often leads to more consequential problems and is a choice means of governments’ subliminal propaganda. For example, a budget deficit corresponds to an increase (a change) in the level of the public debt. When Biden writes that his budget is “lowering deficits by nearly $3 trillion over the next decade,” he means that the otherwise forecasted accumulated deficits of $19.9 trillion over the coming 10 years are now forecasted to be reduced by $2.9 trillion (largely through his tax increases). But this means that the accumulated deficits will have added $17 trillion (a change) to the public debt level over that period. Upon reflection, the title of the Financial Times story is also misleading.
Especially on the first error, the only other excuse I imagine the Financial Times could find is to claim that its readers are sophisticated enough know all this; and that it can consequently afford impressionistic writing. Risky assumption! And if it had a strong connection to reality, what would be the use of analysis? Why doesn’t the Financial Times just publish quotes from the government budget documents along with a few tables (notably Table S-9 on “Economic Assumptions”)? Or even better, simply give a link to the White House budget web pages?
Mar 10 2023 at 12:12pm
I’m not convinced that ‘shaving off the deficit’ is misleading. It’s perfectly valid to talk about reducing a 2nd or higher order variable. I wouldn’t consider it misleading to say a speed bump shaved x mph off your car’s velocity (which after all is the rate of change of position; does this phrase misleadingly imply the car os now going backwards?); or to say it shaved x mph^2 off the car’s rate of acceleration. It would take a careless reader to infer that this meant the car was now slowing down.
Mar 10 2023 at 2:57pm
Mark: Thanks for your comment. This was not the main point of my post, but only “upon [further] reflection”… I would not have criticized that if the title (or subtitle) had said “future accumulated deficits” or if the article itself had been clear about the fact that the public debt was still forecasted to increase. Your car example is interesting, but note that there is no stock of speed that accumulates over time.
Mar 10 2023 at 2:42pm
There’s actually an additional piece of sloppiness in the second sentence of your quotation (my emphasis):
Of course, the unemployment rate is not projected to climb “another 0.3 per cent” but by “0.3 percentage points.”
Mar 10 2023 at 3:06pm
Thanks, Ryan. Good catch! I must confess that I missed that. Sloppiness overflow! I hope that my distraction was because I only added this second sentence in the quoted text to further illustrate the contrast between the CPI and the unemployment rate. Fortunately, we have readers who are more perceptive.
Mar 10 2023 at 3:18pm
I think that works because now its the unemployment RATE, no?
Mar 10 2023 at 8:35pm
No. It’s a percantage point change, not a percent change.
Mar 11 2023 at 5:21pm
Ah, thanks, interestingly speaking of interest rates one will often speak in terms of basis points, but that is never applied to unemployment rate or inflation rate as far as I’ve seen.
Mar 10 2023 at 4:16pm
Pierre, I just checked and the passage that you quote is not in the article published in Friday’s issue of the newspaper (hard copy).
Mar 10 2023 at 6:11pm
Mark: Interesting. The online story was signed by Lauren Fedor and Colby Smith. The newspaper scan you sent me (thanks!) is signed by James Politi and Lauren Fedor and bears a different title. It appears to be a heavily edited and shorter version of the online version, with some paragraphs unchanged, others added, and some deleted. As you noticed, the paragraph I quoted above is not in the paper version. We can hope that the copy editor, before giving his OK for the presses to roll, saw that it did not make sense.
At this time (17:58 ET on Friday), the online version stands as I saw (and copied) it, with only a light edit (as far as I can see with a rapid look) to take account that yesterday afternoon’s Philadelphia speech by Biden has been held. Also, “Joe” has been added to “Biden” in the title. But it contains the same nonsensical paragraph, unchanged.
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