Understanding the Economy: What’s Behind the Numbers

Right From the Start

In the early 1900’s, as modern journalism was taking form, there was a significant debate between Walter Lippman and John Dewey as to the appropriate role of journalism in regard to government. Mr. Lippman advocated that journalism’s role was to act as translator between the decisions of the elites of government and the populace. Mr. Lippman believed that the general public was incapable of understanding the intricacies of public policy or the rationale for political decisions and required the press to translate and reduce the discourse to a layman’s level of intelligence. In doing so Mr. Lippman placed himself amongst the elitists and a confidant of the politicians.

Mr. Dewey, on the other hand, believed that the populace was firmly capable of understanding all of the machinations of government and that the best decisions were made with public involvement and free debate after full disclosure. To that end, Mr. Dewey believed that journalism’s role was to facilitate the public discourse by delivering not just the opinion and actions of the government elites but also the information – all of the information – that effected those opinions and actions. In doing so, Mr. Dewey could be considered a “populist” and an advocate of “watchdog journalism.”

For the most part, at least with regard to the mainstream media, that debate ended by adopting both views. On the one hand, today’s modern newspapers claim to be the watchdogs of government while in practice they have routinely become the media conduits for the government elites. [A more sardonic writer might suggest they practice the former with regard to Republicans and the latter with regard to the Democrats.]

But it is that dichotomy that was on display recently in the pages of The Oregonian.

On Sunday, Oregonian reporter Betsy Hammond delivered a piece the lifted the skirt of the Portland Public School system’s claim to a dramatic improvement in the high school graduation rate as a result of their new “early intervention” initiative. The essence of the story was that most of the claimed “improvement” was due to changing the method of counting students and had nothing to do with the “early intervention” initiative. For years, Portland Public Schools have failed to track students who have left school before graduation because they have moved to private schools, moved to another state or returned to their native country. At the urging of Teil Jackson, the district manager for state reporting the schools mined their existing records and discovered that which was plainly in front of them, but ignored, for years – the fact that when a person did not show up on the graduation rolls of Portland Public Schools, it did not necessarily mean (s)he did not graduate from high school.

In researching and writing this story, Ms. Hammond served the role of “watchdog” and exposed a serious shortcoming in the record keeping and reporting of the Portland Public Schools and debunked a fraudulent claim of success by Portland’s public education elites. Ms. Hammond provided the public the information necessary upon which it can make its own determination of the truth and efficacy of the Portland Public Schools.

But then on Monday, Oregonian reporter Michelle Cole reported that the rolls of Oregonians receiving food stamps had topped 800,000 for the first time – a nearly six percent increase over the previous year. All of that is true but Ms. Cole then had to embellish the story with what can only be described as the clarion call of the political elites. Ms. Cole stated:

“But it does come at a time when Oregon has been seeing some encouraging economic signs, including an unemployment rate that finally dropped below 9 percent.

“Oregon started the year off with an 8.8 percent unemployment rate in January and the state reported 5,400 new jobs were created.”

Despite Ms. Cole’s assertion of “encouraging economic signs” there is virtually nothing that indicates that Oregon’s economy is improving. The drop of the unemployment rate to 8.8 percent reflects not the number of people working, or even the number of people not working – it reflects the number of people receiving welfare payments in the form of unemployment compensation. The rise and fall of that number today is more impacted by the number of people who give up looking for work or exhaust their unemployment benefits than by the number of people actually finding jobs. The number of people receiving unemployment benefits dropped by 2,811 from 179,114 in December to 176,303 in January.

The “5,400 new jobs” reported by Ms. Cole is based on the Oregon Department of Employment’s press release and its number is based upon a “polling” of businesses and an estimation of the number of jobs created. To put that number into context, the Department of Employment previously reported that the number of jobs increased by 5,317 between October and November and by another 1,690 between November and December, Both numbers were false and have been subsequently revised downward to show that the number of jobs actually decreased between October and November by 1,200 and decreased another 300 between November and December. The alleged increase between December and January should be viewed with skepticism based on the fudging of the previous months reporting.

All of this information was available to Ms. Cole and the Oregonian. The fact that the number of people receiving food stamps reached an all time high should have triggered doubt as to the assertion of “encouraging economic signs.” In choosing to transmit uncritically information delivered by the political elites, Ms. Cole and the Oregonian chose to follow the Walter Lippman model and assume that the public was incapable of understanding the intricacies of public policy and the truth and veracity of the political elites.

For my part, I prefer the John Dewey model. The advent of the internet and the sophisticated search engines designed by Yahoo, Google, and Bing have democratized the delivery of information and, in essence, fulfilled Mr. Dewey’s view of the proper responsibility of journalism. The continued adherence to the Lippman model by the mainstream press is the primary reason for its rapidly advancing demise.