How do you access unbiased expertise: follow the money?

Anyone can claim to be an expert nowadays. How do we tell real experts from fake experts, and what does that even mean? And even with real experts, how do we tell which are the ones we can trust and which are telling you what they are paid to tell you? These are big questions, but I want to look at what seems like an increasingly popular method of judging whether expertise is biased, and that is to look at who funds the experts.

There are clearly occasions when this method makes sense. A medic who promotes a drug who receives income from the company that produces the drug, for example. You would also be right to be suspicious about any think tank that is not transparent about the sources of its funding, such as Adam Smith Institute, Centre for Policy Studies, Centre for Social Justice, Civitas, Institute of Economic Affairs, Policy Exchange or the TaxPayers’ Alliance. It is not clear to me why the broadcast media gives a platform to think tanks that do not disclose who funds them.

However when various academics and research institutions produced analysis suggesting negative long term effects from Brexit, some suggested that we should treat this finding with suspicion because they received EU research funds. I have also seen the IFS described as tainted by the fact that it receives some corporate income. In fact the IFS can be accused of being in hoc to all kinds of vested interests. When it published a report estimating that Brexit could lead to a increased budget deficit of £20-40bn, Vote Leave dismissed the IFS as a “paid-up propaganda arm of the European commission” because it received funding from the European Research Council (ERC). But it actually receives more funds from the Economic and Social Research Council (ESRC), which is funded by the UK government, so by the same logic it is a ‘paid up propaganda arm’ of the UK government.

The IFS example shows the danger of taking a naive approach to linking funding to positions taken. The idea that funding from the ERC or ESRC should influence the position taken by the IFS is absurd. Government research funding is dispersed through organisations like the ESRC in part to ensure that money is given to researchers on their merits (as judged by other academics) rather than because researchers might please the current government. Because the IFS is essentially an academic research institute there is no way that who funds any research (directly or indirectly) would influence the outcome of that research. If that started happening, the IFS would begin to lose its academic reputation and therefore its core funding from the ESRC.

This point is also true of academia as a whole. However being part of academia or a professional body does not preclude a pecuniary influence on any particular academic or groups of academic’s opinions, as our example of a medic funded by a drug company illustrates. When it comes to economics an even greater problem than money may be ideological or political bias. That means, unfortunately, that you cannot rely on every academic economist to give you a reasonable idea of where the consensus or plurality of opinion lies. And you cannot rely on finding some monetary link to indicate how much you can trust a particular academic economist.

So how do the public tell when views from economists can be trusted as genuine results of expertise and research untainted by bias due to money or ideology? It is a question that is increasingly asked, but I remain surprised that more people do not point to an obvious answer.

The solution to this problem is to use polls of experts to find out if a consensus on an issue exists. There are already some regular polls of selected academic economists (interest declaration: I am part of the CFM surveys of macroeconomists). Here is the latest IGM poll showing that not a single one of the 40+ panel members think imposing new US tariffs on steel and aluminum will improve Americans’ welfare. These polls are one reason I can claim that most economists do not support austerity. (Guess who was the only IGM panel member that did not think the Obama stimulus reduced unemployment.)

Invaluable though these polls are, they are selective, and a journalist or member of the public cannot be sure that the selection method did not bias the result. I have argued in the past that it would be in the profession’s interest for professional national bodies like the Royal Economics Society (RES) or AEA (American Economics Association) to conduct polls of its own members themselves. The pre-referendum Brexit poll is an excellent example of what could be done, but it was commissioned by the Observer newspaper and not the RES. I remain unclear whether this thought has occurred to either institution, and if it has why it has not led to action. Until it is done, the absence of such polls as a resource means academics cannot really complain when individual overworked journalists take insufficient account of true expertise. [1]

[1] An important caveat here. The existence of such polls is a necessary but not sufficient condition for journalists to acknowledge expertise: see the BBC's treatment of Patrick Minford's Brexit analysis, and ignoring the polls that already exist on issues like austerity and Brexit.  

When the media is biased against the facts

When I write about what I call mediamacro, which includes bad reporting of macroeconomic issues by the media, I often receive comments suggesting that the importance of the media’s bias against Labour is exaggerated, and anyway there is nothing that can be done about it. Now of course the print media is biased against Labour, and what evidence we have also suggested a BBC bias against Labour under Miliband. But most of the time when I complain about BBC and other non-partisan media reporting on macroeconomic issues, it is not a bias against Labour that concerns me, but a bias against the facts.

Take the proposition that austerity was required because Labour borrowed too much. That proposition is simply false. The increase in the government’s deficit occurred in 2008/9 and 2009/10 as a result of the recession caused by the global financial crisis. As I noted most recently here, the Labour government before the recession was clearly not profligate in the normal meaning of that term. So when Conservatives constantly talk about having to clear up the mess Labour left, and this goes unchallenged in the media, that has the effect of legitimising a false statement.

What we have in this case is a variation on what they call in the US a ‘shape of the earth: views differ’ style of reporting. In that case one side claims the earth is flat and the other side says it is round, and the media in an effort not to appear politically biased report it as a disputed fact. If you think that example is too wild, think about climate change, or maybe wait until the US election where Trump is one of the two candidates. Was Obama a US citizen: views differ.

What we get as a result is a bias against the facts. In the case of Labour and the deficit, because Labour chose fatefully not to challenge the Conservatives on this, the media takes this as confirmation that it must be true rather than checking the facts themselves, or shy away from presenting the facts because that would be seen as ‘too political’. Myth then becomes a fact that even some Labour MPs start believing, and when someone actually stands up for the facts they are assumed to be dishonest or a slightly mad professor. So the BBC fails in its mission, which is to inform and educate as well as entertain.

I was going to advertise my talk in Bristol at this point, which will also explain how this failure played a major role in the 2015 election, but I see that it is now sold out. If there is sufficient demand I will write up what I say and publish it here. 

Policy Based Evidence Making

I had not heard this corruption of ‘evidence based policy making’ until I read this post by John Springford discussing the Gerard Lyons (economic advisor to London Mayor Boris Johnson) report on the costs and benefits of the UK leaving the EU. The idea is very simple. Policy makers know a policy is right, not because of any evidence, but because they just know it is right. However they feel that they need to create the impression that their policy is evidence based, if only because those who oppose the policy keep quoting evidence. So they go about concocting some evidence that supports their policy.

So how do people (including journalists) who are not experts tell whether evidence is genuine or manufactured? There is no foolproof way of doing this, but here are some indicators that should make you at least suspicious that you are looking at policy based evidence making.

1) Who commissioned the research? The reasons for suspicion here are obvious, but this - like all the indicators discussed here - is not always decisive on its own. For example the UK government in 2003 commissioned extensive research on its 5 tests for joining the EU, but that evidence showed no sign of bias in favour of the eventual decision. In that particular case none of the following indicators were present.

2) Who did the research? I know I’ll get it in the neck for saying this, but if the analysis is done by academics you can be relatively confident that the analysis is of a reasonable quality and not overtly biased. In contrast, work commissioned from, say, an economic consultancy is less trustworthy. This follows from the incentives either group faces. 

What about work done in house by a ‘think-tank’? Not all think tanks are the same, of course. Some that are sometimes called this are really more like branches of academia: in economics UK examples are the Institute for Fiscal Studies (IFS) or the National Institute (NIESR), and Brookings is the obvious US example. They have longstanding reputations for producing unbiased and objective analysis. There are others that are more political, with clear sympathies to the left or right (or for a stance on a particular issue), but that alone does not preclude quality analysis that can be fairly objective. An indicator that I have found useful in practice is whether the think tank is open about its funding sources (i.e. a variant of (1).) If it is not, what are they trying to hide?

3) Where do key numbers come from? If numbers come from some model or analysis that is not included in the report or is unpublished you should be suspicious. See, for example, modelling the revenue raised by the bedroom tax that I discussed here. Be even more suspicious if numbers seem to have no connection to evidence of any kind, as in the case of some of the benefits assumed for Scottish independence that I discussed here.

4) Is the analysis comprehensive, or does it only consider the policy’s strong points. For example, does the analysis of a cut in taxes on petrol ignore the additional pollution, congestion and carbon costs caused by extra car usage (see this study)? If analysis is partial, are there good reasons for this (apart from getting the answer you want), and how clearly do the conclusions of the study point out the consequential bias?

A variant of this is where analysis is made to appear comprehensive by either assuming something clearly unrealistic, or by simply making up numbers. For example, a study may assume that the revenue lost from cutting a particular tax is made up by raising a lump sum tax, even though lump sum taxes do not exist. Alternatively tax cuts may be financed by unspecified spending cuts - sometimes called a ‘magic asterisk budget’.

5) What is the counterfactual? By which I mean, what is the policy compared to? Is the counterfactual realistic? An example might be an analysis of the macroeconomic impact of austerity. It would be unrealistic to compare austerity with a policy where the path for debt was unsustainable. Equally it would be pointless to look at the costs and benefits of delaying austerity if constraints on monetary policy are ignored. (Delaying austerity until after the liquidity trap is over is useful because its impact on output can be offset by easier monetary policy.)

Any further suggestions on how to spot policy based evidence making? 

The media, the market and truth

I read with interest a recent article by Greg Mankiw about media bias (HT Mark Thoma). It discussed research by Gentzkow and Shapiro on the US newspaper industry. They find that a newspaper’s political slant is governed by the politics of its readership rather than the politics of its owner. Of course television and radio are different from newspapers, and the UK newspaper industry is rather different from that in the US. But what interested me were Mankiw’s own closing remarks:

“These findings speak well of the marketplace. In the market for news, as in most other markets, Adam Smith’s invisible hand leads producers to cater to consumers. But the findings also raise a more troubling question about the media’s role as a democratic institution. How likely is it that we as citizens will change our minds, or reach compromise with those who have differing views, if all of us are getting our news from sources that reinforce the opinions we start with?”

Now even raising this question sounds rather radical, and potentially paternalistic. Should we stop people reading what they want to read, because we think it would be good for them to read something else?

The problem with political bias is that it covers a multitude of sins. At its most innocent, it can simply be presenting facts within a political or ideological context that matches that of the reader. In the UK, a lot of the reporting in the Guardian, or Telegraph, is of this kind. Where it gets more difficult is when this bias determines which facts get reported.

Take this report in the Daily Mail about the UK food banks run by the charity the Trussell Trust. (Or, as some government sources apparently like to describe the Trust, as a ‘business’ seeking publicity.) It is written as an expose, designed to give you the impression that the numbers of people using the Trust (almost a million) should not be taken at face value. It might just work, for someone who wants to avoid the implications of such a large increase in the use of UK food banks. Anyone with a different perspective would either laugh or get angry. (When the article was highlighted on twitter, donations to the charity increased.) You can spot one or two untruths: a headline says their reporter got three days of food ‘no questions asked’, when the article makes clear questions were asked. But mainly this article is biased because of its highly selective choice of facts presented.

(In reality a large part of the increase in demand at UK food banks seems to reflect mistakes made as a result of government changes to welfare, as this Economist article explains, or as John McDermott reports in this excellent piece of journalism. So the bias in this Mail report is not only in the ‘slant’, but the deliberate absence of key facts considered by the Economist and FT.)

At its most extreme bias can involve making things up. At the beginning of this year rules on Bulgarian and Romanian workers coming to work in the UK were relaxed.  Here is a report in the Daily Mail online, indicating a rush of workers taking advantage of this relaxation. As this comprehensive discussion makes clear, the report was essentially a work of fiction. As this report shows, the costs to the newspaper of making things up in this case were minimal. (We have just had the figures for the first quarter: employment of Bulgarians and Romanians went down compared to the previous quarter.)

The traditional view is that slanting news and a highly selective choice of facts is tolerable, but making things up is not. The idea here is that people read newspapers on the understanding that they are based on facts rather than fiction, so including news stories that are made up is the equivalent of misreporting the sugar content on the packaging of some food. So the only thing that should worry us here is that whereas the manufacturer of a food product would presumably be subject to a large fine and damaging publicity if it got its food labelling wrong, a newspaper can effectively get away with it.

Yet this distinction does not address Greg Mankiw’s concern. If people are only told the facts that they are comfortable with, they will never change their minds. And as Paul Krugman observes (via Mark Thoma), if it is only the media read by your political opponents who will cry foul, politicians who just want to ‘play to the base’ are tempted to also distort or manufacture evidence, perhaps leading to descent into a world of fantasy.

Does this selection of facts actually influence people? Fewer people in the US think climate change is a major threat to their country than almost anywhere else (HT George Monbiot). The figure for the UK is also unusually low. This is particularly ironic as a good deal of the science telling us it is a major threat is done in these two countries. A major reason (pdf) why people in the US and UK think this way is that they are allowed the freedom to not to be told about the science, or to be given the opinions of skeptics as if they carried equal or more weight than the vast majority of scientists. (I look at other evidence of influence here.)

So this is an important issue. But can Mankiw be rescued from the charge of paternalism? (No, I never expected to write that line either.) I just want to raise two final thoughts. First, do we know that people are happy not to be told important facts that they might find challenging? If they had a choice between a newspaper that presented all the facts from their own ideological perspective, and another identical paper which only gave them the facts they wanted to hear, would they really choose the latter? Perhaps people do not get that choice. Second, even if they might sometimes choose the latter option, do they want that option? Perhaps it is a bit like being on a diet. We know we might be tempted never to be confronted with facts that challenge our priors, but we know we really should be. So just as those on a diet would rather not be constantly faced with the choice of lots of fattening foods, so perhaps people would not object if they did not have the option of just hearing what they wanted to hear. 

It’s the economics, not the politics

A reflection on rereading an old paper

Regular readers will have noticed that I’m not a great fan of the current government’s economic policies, or its Chancellor (with the very important exception of setting up the OBR). Some will assume that this reflects a political bias - indeed those who are political animals often cannot conceive that everything is not politically driven. If you are looking for evidence either way, this post is about that.

Yesterday I received an email advertising ‘The Economics of Austerity’, which is a collection of essays published by Edward Elgar and chosen by Suzanne Konzelmann. There are 47 in all, but as this includes pieces by Hume, Smith, Ricardo and Mill, you can see that this collection aims to give a historical perspective on the subject. To be honest the email might have got lost in my in-tray if I hadn’t noticed it started ‘Dear Contributor’. Sure enough, in the eight essays dealing with the period after the financial crisis, there was my name alongside others, including some guy named Krugman.

I should have been flattered, but instead my heart sank. The selected paper was originally published in OXREP in 2010, and I remember it now as being hopelessly optimistic. It was written before the Euro crisis, so before austerity became almost universal. Little over a year later I wrote a paper with the title ‘Lessons from failure: fiscal policy, indulgence and ideology’, which seems much more appropriate in the current environment. Yet I thought I ought to reread my OXREP article, to confirm just how dated it had become.

Actually it really is not that bad. The key points are still things I believe. The financial crisis was primarily a crisis involving financial regulation rather than monetary policy or global imbalances. The idea that the Great Moderation was due to improved monetary policy was sound, but it always came with a caveat involving large negative shocks, because of the zero lower bound (ZLB). The ZLB could be mitigated using what I now call a ‘forward commitment’ to higher future inflation, but time inconsistency would make central banks reluctant to pursue that. The obvious alternative was expansionary fiscal policy. If concerns over debt where a constraint, then an effective measure was balanced budget increases in government spending.

This last point is so important, yet it can get lost in the debate. If you want to plug a demand gap at the ZLB, temporary increases in government spending financed by temporary increases in taxes work, because a lot of the tax increase comes out of saving rather than consumption. As the tax increase is temporary and only happens while there is widespread unemployment, concerns about the incentive effects of higher taxes on labour supply are at worst irrelevant. This is basic macroeconomics. But then I wrote this:

“The main problem with fiscal measures to expand the economy which do not raise debt is political. Higher government spending, even if it is temporary, raises taxes and temporarily increases the size of the state, which is unpopular on the right of the political spectrum. Fiscal transfers that move money from unconstrained savers to those who are credit constrained also tend to involve transfers from the rich to the poor. Although useful from the point of view of stimulating effective demand, they may not be politically acceptable.”

Quite. What was missing was an equivalent paragraph saying that, even if there was no economic problem with raising debt, debt financed fiscal expansion might be resisted for political reasons. However, I now want to return to where I started. The OXREP paper was written before the current coalition was elected. It set out how I saw the macroeconomics. At the ZLB you could use unconventional monetary policy, but in addition you should use fiscal stimulus, whether debt was a constraint or not.

It was politics - and ideology - that got in the way of good macroeconomics, which is why the UK and global recession has been so prolonged. And it is that tendency that is personified by George Osborne. Even if debt was erroneously thought to be a constraint, we should have had tax financed increases in public investment rather than cuts. This extra investment could have been on politically neutral things, like flood defences.

Unfortunately austerity turns out to be part of a pattern. There is another example from the OXREP paper. When talking about an environment of low real interest rates, I noted the danger of housing bubbles, but also how specific fiscal instruments could be effective (relative to raising interest rates) in dampening these bubbles. A corollary, of course, is that these same instruments used in reverse can be used to make bubbles much worse, or indeed to initiate them, as in Help to Buy. House prices are now above their previous 2008 (bubble?) peak. Maybe this is good politics, but it is lousy economics.

So I do not think the complaint of political bias stands up. What you could perhaps argue is that I’m being politically naive: that all Chancellors maximise political advantage at the expense of national economic interest. The fact that Gordon Brown’s scorecard seems much better (including resisting Blair to stay out of the Euro) could just reflect opportunities and circumstances rather than anything else. It is certainly true that the position George Osborne inherited, as a result of the financial crash, was much more difficult than Brown’s inheritance. But go back to the time I wrote the OXREP article. At the end of 2008 Labour did undertake fiscal expansion, and it was opposed by Cameron and Osborne. As I noted here, Osborne in April 2009 argued that monetary policy should “bear the strain of stimulating demand”, seemingly oblivious to interest rates being as low as they could go. So Labour’s policy was consistent with the arguments in my OXREP article (which in turn reflected basic macroeconomics), while Conservative policy just ignored them. 

So thank you Dr. Konzelmann, for including me in such good company. But also thank you for making me reread the paper and revise my memory of it. [1]

[1] I fear I cannot also thank the publishers, who tell me that unfortunately I cannot have a complimentary copy, because of the large number of contributors. I’ll leave it to Hume, Smith, Ricardo and Mill to complain directly. I guess Keynes, who has 5 essays in the book, probably got a copy!

Behaving like Luddites

The Luddites were 19th-century English textile artisans who protested against newly developed labour-saving machinery from 1811 to 1817. Activists smashed Heathcote's lacemaking machine in Loughborough in 1816. At the time, the BBC said that the increase in employment that would result from destroying the machinery “was of course good news”, but there was a concern that output might fall as a result. But some experts proclaimed that, thanks to the Luddites, we should celebrate that Britain was now leading the way in employment creation. A prominent politician that supported the Luddites accused the BBC of being hopelessly biased, and “peeing all over British workers”. The BBC Trust subsequently held a seminar on impartiality and economics reporting.

OK, the first two sentences come from Wikipedia, and the rest is nonsense. The idea that the BBC might describe additional employment that resulted from not using labour saving machinery as good news is surely unthinkable. If a journalist pointed out that these actions were problematic because productivity would fall, it must be inconceivable that any serious politician would accuse that journalist of bias. Unfortunately, if you follow the links, you will see that I made very little of that paragraph up, but just transposed things that happened a year ago back another 200 years.

There is one sense in which my transposition may be slightly unfair. In a recession, low productivity growth means that unemployment is lower. So I would have no problem with a line that went: “Of course the growth in UK employment, given flat output, is bad news. However, if this slowdown in productivity growth is temporary, and we catch up in terms of productivity levels later on, it may have a silver lining. Low productivity growth means that unemployment is lower, so that the pain of the recession is being more evenly spread by (nearly) everyone receiving lower real wages.” In a car crash, it is good when things like seat belts mean that people escape with minor injuries. But no one should describe the car crash itself as good news. [1]

At the seminar that the BBC Trust did hold in November 2012, there was disagreement over “whether BBC coverage should reflect a consensus view, in areas where there is one, or whether instead it must reflect the range of opinions even if parts of that range are minority views.” I would suggest that the overwhelming view today is that high productivity growth is beneficial, and that low productivity growth is a serious cause for concern, even if it might in the short term keep unemployment low. Do we really want the media to portray this as just ‘one perspective’, and then give equal time to the ‘opposing view’ that strong employment growth and low productivity growth is simply good news. In the case of the BBC and UK productivity, the BBC currently follows the 'opinions on shape of the earth differ' approach, and is then accused of bias for even mentioning that low productivity growth might be a concern.

It is vital that the media does not let politicians dictate how facts are interpreted. In George Osborne’s Orwellian nightmare, support for his handling of the economy is growing, and opposition to austerity is crumbling, whereas in the real world the case for austerity has never been weaker. It was always obvious that when the economy started recovering, this would be proclaimed as proof that the government’s policies are working, whereas what it really tells us is how used we have become to a no-growth economy.

Now if politicians want to be Luddites that is of course their choice. We trust in the system to quickly find them out, so that they do not get to hold positions of responsibility. Yet how is that supposed to happen, when the media insists on giving the Luddites equal space. As the opinion poll results presented by Professor Schifferes to the Trust showed, many people follow economics news closely, but remain confused by it. They rely on the media not just to present the news, but to put that news into context. Reporting that says one day ‘output growth low: bad’ and the next ‘employment growth high: good’, without putting the two together, is bad reporting.

Tim Harford has a recent post that pokes fun at some of the common misperceptions that the UK public has, such as crime is rising, a third of the population was born overseas, or that teenage pregnancy is widespread. What Tim does not ask is where these incorrect perceptions come from. He does note that they often do not come from direct experience: “people generally believe that their own area is closer to the way they like it with lower crime, lower unemployment, better policing, fewer immigrants. It’s the rest of the country they worry about.” So where do these perceptions about the rest of the country come from, if they do not come from the official statistics? The answer is pretty obvious - they come from the media.

There is a large part of the media, in the UK and elsewhere, that would regard the perceptions Tim quotes as indications of success rather than failure. It is not a coincidence that these misperceptions all tend to encourage a rather illiberal political agenda. However these perceptions should be a source of deep concern for organisations like the BBC, whose mission is “To enrich people's lives with programmes and services that inform, educate and entertain.”

Of course the ‘two sides’ approach has its place. It is not clear, for example, how much of the productivity slowdown in the UK is the government’s fault. However given what we know about output, the strong growth in UK employment is self-evidently bad news. As the coincident slow growth in UK wages shows, we are (nearly) all significantly worse off as a result. It is time the UK media recognised that the Luddites were wrong, and update its reporting accordingly.

[1] In the US in particular, monthly employment numbers are used as an indicator of what is happening to output, which is something completely different. Here I am talking about commentary that at least has the potential to compare what is happening to employment and output.

Must we live with a post-truth media?

Something odd but familiar was going on when I wrote this post on Labour’s economic record. The Labour leader and shadow chancellor both made speeches that had apparently been months in the making, and which were (I think intentionally) spun as trying to convince voters that they could trust a future Labour government with fiscal management.

Why odd? Because it presumes that there is some real problem to solve. It presumes that the last Labour government managed the nation’s fiscal affairs very badly, and so today’s politicians have to show they would be different. Yet the paper I wrote tells a very different story. The previous Labour government set up fiscal rules that were both responsible and better than rules subsequently adopted elsewhere. Until the financial crisis, they kept to those rules. Here is the basic data: the top line is the debt to GDP ratio, the bottom line a scaled up current balance to GDP ratio.

Labour Government's Fiscal Record: source OBR

Of course it is possible to find fault, and I do. In hindsight it would have been better if the debt to GDP ratio had been kept nearer 30% of GDP, or even reduced further. But debt to GDP was lower before the recession than when Labour took office, and the current balance was almost zero. Hardly a profligate government. Indeed one of the faults I find, over optimism in Treasury forecasts, has been fixed, to the Conservative party’s credit, with the creation of the OBR.

With the financial crisis everything changed, because this produced the Great Recession. Deficits go up in recessions. There was a small contribution from the government’s attempt to reduce the impact of the recession, an attempt which analysis suggests was successful, so they should take credit for that. It is pretty obvious that you cannot use the fact that the deficit rose in the recession to argue that Labour cannot be trusted with the public finances. Again, the data speaks - look at when the deficit rose in the past.

Of course you could say that the Great Recession was the government’s fault. It should have foreseen the financial crisis coming. It should have known that levels of GDP in 2007 were going to be interpreted, five years later, as a massive economic boom rather than as they appeared at the time as something close to trend. It should have known this, despite the advice it was getting to the contrary from the Bank of England, the IMF, OECD, most economists …. and Her Majesty’s opposition! You can take that idealist view - but not if you were agreeing with all this advice at the time.

So the idea that the last Labour government seriously mismanaged the nation’s finances is a myth. What is more, unlike older myths like the earth is flat, as these charts show it is not something that is generated by perception and which requires expertise to unravel. Unless you are completely naive about the impact of recessions on deficits, a quick look at the data tells the true story. So it is a manufactured myth that distorts what the numbers appear to show. The problem with myths is that after a time, even otherwise good journalists at good places like the Financial Times start believing them.

Now we all know who manufactured the myth. Yet I think most people believe that if a political party started telling a story that was clearly at variance with the facts, it would be found out. In short, people expect journalists and economic commentators to confront politicians who attempt to create and perpetuate myths. In this case they did not. Its also pretty obvious why they did not. The incentive for organisations like the BBC is to stay out of trouble. And who has been making most noise about bias in economic reporting - the government. As any economist will tell you, its all about incentives.

So it really is the duty of academics to speak to truth, as loudly as they can, when it is being ignored by the media. On this topic, the media in general and the BBC in particular have been hopelessly biased in allowing the government to get away with this myth. They have some serious explaining to do.