On Tuesday last week the government (Census Bureau) came out with new 2015 numbers for income and poverty in the United States; and on Wednesday morning, as I discussed in this post that day, the Census release was the lead story on the front pages of both the New York Times and Wall Street Journal. The Census Bureau numbers were obviously and transparently fake. Supposedly, in a year when GDP increased by a meager 2.4%, median household income had jumped more than 5%, and the number of people "in poverty" had declined almost 10%. The reported changes in income and poverty could not possibly be real if the GDP numbers were also real, and could only have resulted from a methodological change that was carefully buried. No remotely competent economic journalist could fail to spot something so obvious. Nonetheless, both the NYT and WSJ fell for it hook, line and sinker.
(As I noted in an update to Wednesday's post, John Crudele of the New York Post promptly spotted the methodological revisions that were likely to have driven the income and poverty changes. In my view the new methodology, while still terrible, is actually preferable to the old. In the old numbers, income was greatly understated and poverty greatly overstated. Now, income is somewhat less greatly understated, and poverty somewhat less greatly overstated. But meanwhile, the reported "changes" to income and poverty in 2015 have next-to-nothing to do with real changes, and derive substantially if not entirely from the changed methodology.)
So then yesterday I received my weekly copy of The Economist magazine. (Actually, they call themselves a "newspaper.") Surely they are the high end of sophisticated economic journalism. Here is their article on the Census income/poverty release. And yes, they also fell for the Census release hook, line and sinker:
THE median real household income grew by a whacking 5.2%, or $2,800, in 2015, according to figures released on September 13th. . . . Bucking recent trends, the wallets of the poor and least-educated swelled the most. Income at the twentieth percentile (meaning the level at which exactly one-fifth of the population earns less) grew by over 6%. . . . That also helps to explain a fall in the poverty rate from 14.8% to 13.5%—the largest annual percentage-point drop in poverty since 1999.
The article contains no skepticism at all as to how this could be consistent with 2.4% GDP growth, and zero curiosity as to whether methodology was changed to obtain convenient numbers for an election.
Seeing that The Economist too could be so easily duped, my curiosity was piqued to look around the web at some other major sources. Sure enough, with the exception of Crudele at the NY Post and John HInderaker at PowerLine, all the major sources got duped. For example, see the Washington Post, with headline "Middle class incomes had their fastest growth on record last year":
Real median household income was $56,500 in 2015, the bureau reported, up from $53,700 in 2014. That 5.2 percent increase was the largest, in percentage terms, recorded by the bureau since it began tracking median income statistics in the 1960s. In addition, the poverty rate fell by 1.2 percentage points, the steepest decline since 1968. There were 43.1 million Americans in poverty on the year, 3.5 million fewer than in 2014.
Or try Bloomberg News, "Four Charts Show How Much Poverty and Income Have Improved in the U.S.":
According to new data from the U.S. Census Bureau, last year saw poverty in the U.S. decline the most in 16 years. The report released on Tuesday morning shows the official poverty rate in the United States declined to 13.5 percent in 2015, a 1.2 percentage drop from 2014. That is the largest drop seen on a year-over-year basis since 1998 and 1999.
CNN? Their headline is "The middle class gets a big raise . . . finally!"
Median household income rose to $56,516 in 2015, up 5.2% from a year earlier, according to data released by the U.S. Census Bureau Tuesday. It marks the first increase in median income since 2007, the year before the Great Recession started. Also, the poverty rate ticked down to 13.5% in 2015, from 14.8% a year earlier.
Hook, line, and sinker. They all just regurgitate the Census press release without a hint of critical thinking. The only real question is, are they just that dumb, or are they all part of the Hillary campaign? Or, it could be both.