Another Dubious Fact Check

June 6th, 2012 at 5:43 pm

Important Update: I mistakenly wrote that PolitiFact rated this as “mostly true” when their actual rating was “half true,” so they were a bit more critical than I thought.  MY BAD.  Still, it should have been rated “mostly false.”

As I’ve said before, I’m all for these fact checkers taking a close look at the claims of politicians and their proxies, particularly around election time.  There’s an ocean of mis-information out there, and we need skilled life guards if we are to avoid drowning in spin.

But it’s unsettling when the fact checkers themselves get it wrong, as occurred in this PolitiFact review of the claim the median incomes rose $5,500 while Mitt Romney was governor of MA.  PolitiFact grades this claim as half true, when it is mostly false.

Median income in the state rose, 2002-06, in nominal terms, i.e., before accounting for inflation.  The review points this out, but downplays its significance, when in reality what matters to households is the real income trend, not the nominal one.  That’s what determines buying power and living standards.

And once you factor in inflation, as I do in the figure below, median income declines over these years in MA. 

If your income goes up 5% and inflation goes up by the same amount, you’re no better off in real terms, which is why economic statistics like this are always cited in real terms.  Take GDP, for example.  I just Googled “US GDP growth” and clicked through as many articles as I could stand.  Not one cited nominal GDP growth.  Same with the Census’s own income reports—and the news stories they generate—on income growth.  The headline is always the real, inflation-adjusted values.

There was legitimate analysis in the PolitiFact review about whether governors or presidents should get credit or blame for economic trends over their watch.  And the nominal data are not “wrong.”  But they’re clearly not what should be cited in this context.  PolitiFact got themselves a bit spun on this one.

Source: Census Bureau

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11 comments in reply to "Another Dubious Fact Check"

  1. NP says:

    Politifact have been shown to be the corporate tools that they are after they decided people calling Paul Ryan’s health care plan “The End of Medicare” was the Lie Of The Year for 2011. Just because Ryan called his voucher scheme “Medicare” does not make it the same system. To base their “Lie Of The Year’ on such specious semantics is an insult to all the verifiable real political lies out there.

  2. wkj says:

    You say “If your income goes up 5% and inflation goes up by the same amount, you’re no better off in real terms…” You could be better off with 5% inflation if your assets (house) go up in value and your debts (mortgage) do not.

    • NP says:

      He was talking about income, not assets. The reasons you stated are why Krugman et al call for some inflation so that the overhang of mortgage debt is eroded away and everybody’s standard of living increases.

  3. perplexed says:

    This seems to be an error that easily lends itself to manipulation and wastes a lot of time (for those who are trying to read through an article and determine if real or nominal rates were used so they can determine whether or not they are being misled). It seems this would be easily remedied by the use of a standardized notation for real or nominal data. Is there a reason why the field of economics has not established such standard notations to eliminate this confusion and not just rely on writers to follow the “conventions” and readers to assume they have been properly followed?

    This reminds me in a way of showing pie charts purportedly displaying government distributions of payments and “entitlements” that don’t include tax distributions, monopoly profits, and other forms of corporate welfare. This unnecessary lack of clarity seems designed to promote obfuscation and deception rather than to support clear communication.

  4. Joan Null says:

    Your blogs continually have got much of really up to date info. Where do you come up with this? Just saying you are very innovative. Thanks again

  5. Chris G says:

    IIRC, housing prices were running up here in MA – particularly in metro Boston – during Romney’s term as Governor. Are ‘real’ numbers determined using a national multiplier or a local multiplier? (I’m guessing the former.) It would be interesting to see real median income vs time in metro Boston as adjusted for local CPI. My guess is that housing inflation would drive it down relative to the chart shown – but maybe not.

  6. Molly Moorhead says:

    I wrote this piece for PolitiFact, which was rated Half True not Mostly True as you say above. Gillespie cited a true statistic from the census but used it to paint a skewed picture of what happened to incomes during Romney’s tenure in Massachusetts. Just like you, we pointed out the real income figures, and included analysis from several experts — an economist, two college professors and a former reporter who covered Romney’s gubernatorial term. Gillespie’s claim boiled down to an accurate number put in an inaccurate context. That meets our definition of Half True. We’re certainly not above criticism, but it’s no less unsettling when ideologically driven commentators get their criticism wrong.

    • Jared Bernstein says:

      My bad–and I fixed this prominently. But it’s not half true–it’s mostly false. You still were a bit spun on this and there’s no ideology about it. I challenge you to find a newspaper article on Census income releases that highlights the nominal numbers…OK, you might be able to find a few…but you’ll find that the vast majority don’t even mention the nominal changes–they all adjust for inflation.

      This is neither controversial nor ideological. You guys got it wrong. I did too, but I’ve fixed it.

      When are you going to fix your mistake?

    • perplexed says:

      Half true, kinda pregnant, he said – she said, ad-hominem attacks. The conclusions the article infers are entirely based on the false premise created by exploiting the lack of an exact definition and using one outside of the conventional one with an intent to deceive the reader. Why not just state it? Is there not enough entertainment value in that option?

  7. David R. says:

    You need to get away from even discussing Fact Checkers, for this reason.

    Instead of checking facts, they have become judgmental, which is why they use terms like mostly true or half true. The very nature of a fact checker is that a fact is either true or false.

    These self appointed people don’t want to anger the powerful in all parties, so they do not do what they claim to do, ie, check facts. Until they start to make decisions that something is either true or not true they should just be avoided.

    What does it mean for a fact to be ‘partly true’ anyway?

    Your point, it is true that nominal income rose in Massachusetts, it is false that real income rose. There are no “half truths” involved here.

    Here is what is going on from The Dismal Political Economist.

    “PolitiFact has the challenge in their minds of rating claims of blame and credit. No, that is not what they are supposed to do, in fact it was not what they originally were doing.

    ‘In our first couple of years, we treated many of those claims very literally. If someone said jobs had gone up since a governor was in office, and we found the numbers backed it up, the statement earned a True.

    So what changed, well PolitiFact decided that their job was to make a value judgement on the claim, a subjective judgment involving nuance and intent.

    ‘we began rating those types of claims as compound statements. We not only checked whether the numbers were accurate, we checked whether economists believed an office holder’s policies were much of a factor in the increase or decrease.

    We give a lot of Half True ratings because the numbers are often right, but experts repeatedly tell us that the policies of a single executive have a relatively small impact in a big and complex economy.’

    Look, there is no body of “expert” economists. There is no consensus. You can find prominent economists to support any position. Nobel prise winners disagree. There is no way to interpret subjectively what the person is saying or to run it by a panel of experts and get their opinion on the subliminal meaning. That is not fact checking, that is garbage.”

    • Jared Bernstein says:

      I hear you and plan to write something about this soon. Note that the person from PolitiFact claimed (in comments) that I was ideologically motivated by insisting that they use real, inflation adjusted numbers in discussing household income trends (which is about the only way this is done by people who know what they’re doing). This is scary.

      On the other hand, as you say, facts and facts and I like the idea of watchdogs in that regard. But I agree–what do you mean, half true, mostly true, half false, etc…??!!