How the Economic News is Spun

From CounterPunch, another essay by the conservative former Assistant Secretary of the Treasury under Reagan, Paul Craig Roberts:

When the US Department of Labor, for example, releases the monthly payroll jobs data, the press release will put the best spin on the data. The focus is on the aggregate number of new jobs created the previous month, for example, 150,000 new jobs. That sounds good. News reporters report the press release. They do not look into the data to see what kinds of jobs have been created and what kinds are being lost. They do not look back in time and provide a net job creation number over a longer period of time.

This is why the American public is unaware that higher paid jobs in export and import-competitive industries are being phased out along with engineering and other professional "knowledge jobs" and replaced with lower paid jobs in domestic services. The replacement of higher paid jobs with lower paid jobs is one reason for the decline in median household income over the past five years. It is not a large decline, but it is a decline. How can it be possible for the economy to be doing well when median household income is not growing and when economic growth is based on increased consumer indebtedness?

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The above excerpt is but one example of the rhetorical playground known as "economics." The long and the short of this is that, even though economics as a field of study has a great deal of social value, economic pronouncements most certainly do not have the same kind of credibility behind them that real sciences do--economics, like psychology, depends on way too many assumptions to come to any clear and concrete conclusions. Nonetheless, politicians and the news media behave as though the economic conventional wisdom is as authoritative as science. Compounding this problem is that the field, when compared to physics or chemistry, is extraordinarily undisciplined in that there is no objective standard for fact-checking. That is, in a real science, if one scientist issues a fantastical statement about how the universe works, hundreds of other scientists then try to recreate whatever experiment led the first scientist to his fantastical conclusion in the first place. If it checks out, then it's no longer fantastical; if not, that scientist is a crackpot. While economists can recreate statistical studies, there is no way to really do the same thing with ideas about what those numbers mean; there are better and worse arguments, of course, but, ultimately, interpreting economic data is usually very subjective, and because most Americans are unaware of the field's lack of objectivity, there is very little skepticism when the oracles of Wall Street speak. Obviously, people with power and agendas take great advantage of the confusion. Consequently, Americans continue to struggle to stay afloat, often slipping under, even though "the economy improves."

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