MarketWatch Is More Right Than the WaPo Factchecker Says It Is

May 29th, 2012 at 4:16 pm

I often find the Washington Post fact checker to provide a very useful service, but on occasion they mess things up, usually by hitting an innocent party with too many Pinocchios in the interest of seeming balanced.

This was the case in their assignment of three (out of four) Pinocchios to the recent MarketWatch column on President Obama’s actual spending record.  The Post makes one important correction to the MarketWatch analysis, but that doesn’t change the qualitative result that relative to past presidents, Obama has been anything but a big spender.  And given the outlandishly loud rhetoric from conservatives to the contrary, I’m not sure even one Pinocchio is warranted.  (Note that rated the MarketWatch column as “mostly true.”)

In case you’ve missed this scintillating discussion, the issue here is the rate of spending under President Obama’s tenure.  MarketWatch (MW) came up with 1.4% per year, 2009-13; the WaPo gets 3.3%.  I’ll explain the difference in a moment, but even if you go with the WaPo, President Obama’s spending record is still the lowest annual rate since Eisenhower (and “no,” I’m not saying that’s great either—no wonder we’re stuck in slog mode—but that’s not for his lack of trying to pass more job creation measures).

The difference mostly comes from how you decide to assign different spending programs in 2009.  That year’s spending was inflated by a lot of stuff related to the Great Recession and financial rescue, so it’s a high base, but it’s still the completely legitimate base since the budget signed by the President doesn’t take over until 2010 (and MW assigns 2009 stimulus spending and some other approps from that year to Obama).

The WaPo gets their 3.3%, 2009-13 by re-assigning some of the 2009 TARP spending to Obama, a slightly peculiar choice given that this was clearly a Bush program, and again, the 2009 base is the base.  Still, WaPo has a point in that a) the 2009 TARP estimate turned out to be too high (giving President Obama a high spending perch to come down from) , and b) later budgets’ adjustments to the TARP took the spending down as estimates began to reflect far fewer bank losses than expected.  That said, MW’s using official budget numbers and by those numbers, the Obama administration legitimately gets credit for effective management of the TARP.  That is not the stuff of Pinocchios!

On the other hand, the WaPo is correct that MW’s endpoint in 2013 is biased down, since MW uses the CBO “current law” outlays for that year instead of CBO’s score of the President’s actual budget request.

When you plug that in, instead of MW’s 1.4% spending growth per year, you get 2.4%.  Again, no big whoop in historical terms.

Finally, as the WaPo suggests, a more accurate way to do all of the above is to adjust for inflation and population growth.  I did so since Reagan and the historical results don’t change (though now Obama ties Clinton for lowest real spending).  But as the figure shows, after the ramp up 2008-09, real spending declines 0.5% per year!  That’s austerity folks, imposed by conservatives’ refusal to adapt measures like the American Jobs Act.

Note: I used MW’s nominal budget numbers for 2008-12, and the WaPo’s # for 2013 (see text).

I’ve tried to give the WaPo credit where it’s due here, but they should realize that they’ve graded this far too harshly.  You wanna go with 1P, go ahead—you’re right about the endpoint.  But given the facts of the case, even under your own measure, and especially amidst the clamoring rhetoric to the contrary claiming the President is the biggest spender ever, 3P’s has no credibility.

I respectfully request that they revisit this one.

(H/t’s: RK, KM)

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9 comments in reply to "MarketWatch Is More Right Than the WaPo Factchecker Says It Is"

  1. davesnyd says:

    I think the supposed “liberal media bias” doesn’t really exist– if anything, it is quite the opposite. Perhaps, as you allege, from a desire to seem even handed. Perhaps, as the Occupy types often claim, because they are mostly owned by billionaires and large corporations. Perhaps, as I’ve heard others state, because most of the “successful” media members are themselves financially successful and so sympathetic to their own class.

    Any way you slice it– they seem to have been much less generous to Obama and Clinton before him than they have been to the Bushes and Reagans. And they seem determined to overlook Governor Romney’s issues and treat him like an honest and fair campaigner (see Halperin’s Time interview if you want to view the source of my frustration on that issue).

  2. procopius says:

    You’re writing as if the WaPo was somehow an honest player in these games, or at least an impartial reporter. On the contrary, the WaPo has been a right-wing rag since at least the mid-1980s, and specifically a neo-conservative propaganda organ since 1994. They don’t even make a pretense of confining their propaganda activities to the editorial pages. Their news stories, especially on Page One, are rife with editorializing and slanted reporting, when not downright lying. They have rightly become known as “Fox on Fifteenth Street.”

    • Fred Donaldson says:

      Their fact-checking allows Fiscal Times pieces to run without explaining what that organization advocates and who founded it.

      The Post is often so inside the elite beltway, it can’t see the forest for the trees that it pulps to make the paper it covers with austerity messages and cries for spending slices for the poor and tax hacks for the rich.

  3. tecwrite says:

    Jared left off the graph that shows the national debt.

    Government spending as a percent of GDP has been historically around 20%. Obama increased that to 24% and has not only left it there but plans on maintaining it there for the next 10 years.

    His ‘plan’ is raise taxes on the rich. Some say that won’t work because it will slow the economy. I do not know about that. I do know that he will take the money raised and give to the union goons and Solyndra style backers that fund his campaigns. That is what he does. It will not reduce the debt.

    • Michael says:

      Obama didn’t increase spending so much as the economy is in the, ah, bathroom.

    • Michael says:

      The purpose of “fact-checking” is to catapult right-wing lies under the guise of refereeing. Politifact made this abundantly clear, when they named a completely true statement “lie of the year” because it made Republicans look bad.

    • Mike says:

      tecwrite, spending as a percentage of GDP has two variables, spending and GDP. If spending stays the same but GDP drops, the ratio looks worse. So it isn’t entirely accurate to criticize spending using this metric.

  4. Mike says:

    The argument against these numbers that I usually run into center around the actual amount of spending that Obama has done. In his first term, he’s projected to spend somewhere around $13trillion. As best I can tell that’s the most 4 year amount of any president in history, accounting for inflation of course.

    The folks who point this out don’t care that Obama took office in the middle of the second worst financial crisis in history, with huge unemployment, two wars, a crush of people retiring and beginning to utilize Medicare and Social Security.

    My question is how much of Obama’s spending was on things he had no control over and how much of it was truly discretionary? Anyone have a handy way to figure those numbers?

  5. Misaki says:

    Maybe forgot to add in taxes. Less people might be complaining if taxes had gone up to match spending without affecting unemployment.

    Job creation without government spending, inflation, or trade barriers: