Well, just like that, with this blog post, Heritage has now changed its forecast for the unemployment rate under the Ryan budget.

The new numbers are linked to in the post — the PDF is here.

An interesting 24-hour period, to be sure.

Adding: Heritage went out of its way (here) to defend its methodology — strongly implying to me that they saw no reason to change it.  Yet change it they did.

We used the same economic model that is employed by leading government agencies (Energy, Treasury, Labor, Office of Management and Budget) and the Congressional Budget Office (CBO). The model is the Global Insight U.S. Macroeconomic Model, which has been in widespread use among government agencies and Fortune 500 companies for over 40 years. Its commercial success is a measure of its award-winning accuracy.

Someone capture that page before it, too, makes its way down the memory hole.  This smells just a bit scandalous.

Category: Current Affairs, Economy, Employment, Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

38 Responses to “Inconvenient Numbers? Change ‘em.”

  1. Orange14 says:

    As far as I can tell they don’t explain where the 2.8% unemployment rate of the original calculation came from (maybe an LSD dream or a perhaps a seance with Milton Friedman). They also don’t explain why with the House resolution unemployment drops more than without. I can see nothing in the proposed resolution that will lead middle class folks to spend any more money than they are already (maybe they should save a heck of a lot more since they will be paying big time when they hit Medicare age and have to find health insurance). I’m not an economist (just a savvy investor) but certainly can see all the holes in this moth-eaten cloth.

  2. Unsympathetic says:

    Just a bit? Barry, if this type of nonsense wasn’t par for the course for Republicans, it WOULD be scandalous. But hey, they’d rather cherry-pick bizarre numbers to fit the desired outcome, so it really doesn’t matter in the end.

    If I start by assuming a 0% unemployment rate.. just imagine the budget-deficit-cutting work I could do!

  3. DeDude says:

    One heck of a model they got there. You change the unemployment from 2.8 to 4.3% and nothing else changes. I want one of them – no give me a dozen.

    Invictus: That is spot-on. How can the unemployment rate go up from 2.8% to 4.3% and yet none of the other ~30 indicators are affected? If they have tweaked their model — as opposed to simply pulling numbers out of their collective arses — shouldn’t we see at least some modest changes in the other metrics? A massive crock of shite is what we’ve got here.

  4. DeDude says:

    “the Global Insight U.S. Macroeconomic Model”

    Was that the one that Bush II used to predict 10 trillion in surpluses, so he could justify his first round of tax-cuts for the rich.

  5. GeorgeBurnsWasRight says:

    Paging David Stockman . . .

  6. TDM says:

    The same model predicted that Pelosi’s stimulus would “create or save” millions
    of jobs and lower the unemployment rate. What would the model’s predicted unemployment rate be if we hade a “big enough” stimulus? I don’t like a model that tells me how happy it will make me to have the government take all my money and spend it for their own employee’s personal benefit becauseit will increase “aggregate demand”.

    But it is the leading Macro model and Heritage/Ryan cannot do any better than stuffing their policy into the best model.

  7. mark_gavagan says:

    RE: “Someone capture that page…” Jing http://www.techsmith.com/jing/ is a great tool for taking an image of whatever you see on your computer screen. They have a pro version, but the free one works fine for me. I have no relationship with this company, other than being a customer.

  8. TDM says:

    The Heritage link explains exactly what they did: “we are making an adjustment to one variable — the full-employment unemployment rate, which is one component of the equation for the overall unemployment rate.”

    How can the unemployment rate go up from 2.8% to 4.3% and yet none of the other ~30 indicators are affected? It is not their own macro model, they are using the same macro model as everyone else. If you want to know how changing one model parameter changes only one model output ask Global Insight.

  9. Invictus says:

    @TDM

    If you want to know how changing one model parameter changes only one model output ask Global Insight.

    Indeed. Apparently that’s been done, and this what Global Insight’s Nigel Gault had to say:

    Nigel Gault, the chief economist for Global Insight told the National Journal’s Tim Fernholz that he has no idea how Heritage came up with their conclusions.

    “I’m not quite sure what assumption … would deliver 2.8 percent unemployment,” Gault said.

    Thanks for playing.

  10. Andy T says:

    Invictus…

    You’re turning the The “Big Picture” Financial blog, which supposedly concerns itself with “Capital Markets, Economy, Technology and Digital Media,” into a Left Wing political “spin” blogs whose function is to combat material put out by the Right Wing political “spin” people.

    Seriously, who gives a SHIT about what the Heritage Foundation claims will be the unemployment rate through 2021.

    Nobody in their right friggin’ mind should believe any such “forecast” put out by either a left wing or right wing “foundation.” Ditto the CBO.

    Nobody really knows.

  11. holulu says:

    Biggest problem with most of these “Think Tanks” is that they do not have Intellectual Integrity.

  12. RW says:

    “But it is the leading Macro model and Heritage/Ryan cannot do any better than stuffing their policy into the best model.”

    Except it looks like they stuffed the model into their policy.

    The author of the Global Insight macro model claims he cannot understand how Heritage could get the numbers they did but that evades the larger point which is a model will generally accept the assumptions of those doing the modeling: When those assumptions are off base then you get crazy answers; i.e., GIGO.

    The bigger picture is that rejecting models when they don’t give desired answers but accepting them when they do is an argument that the model itself is wrong but, if that is true in this case, then Ryan’s results must be rejected exactly the same as Pelosi’s, immediately right out of the box because ‘bad’ models were used.

    If it is not true then the model is valid under some range of reasonable assumptions and somebody using it wasn’t reasonable; that somebody was pretty clearly Heritage in this case although it is not easy to tell because, unlike CBO, their methodology is not transparent (it is generally possible to track error and refine processes when methods are public which is why black box answers are so objectionable).

  13. wally says:

    I wonder why they changed it? Normally it is considered perfectly acceptable to lie if you are right-leaning.

  14. Fred C Dobbs says:

    Andy T is right. We have 2 classes of forecasters: Those who don’t know . . . and those who don’t know they don’t know. —John Kenneth Galbraith

  15. Mike in Nola says:

    Capturing the page doesn’t matter. You naively think these people would believe something one of their own published. The wingnuts will not believe anything inconsistent with their worldview even if it comes from one of their own, e.g. the surprise opinions at the global warming hearings, and the rational already know anything that comes from Ryan and/or Heritage is looney tunes.

  16. HarleyHoward says:

    They made a mistake and corrected it. What the hell is wrong with you guys? Isn’t the budget and deficit reduction the point of this exercise? What are the actual comparison numbers on spending between the Ryan plan and the Obama plan, or don’t you care?

  17. wally:
    They changed it because they got caught with their pants down. Heritage isn’t a place that deals with facts. They are a right-wing propaganda shop.

    Invictus:
    I am pretty sure that Dr. Krugman saved copies. He noticed the same thing as you. And he, like you, is always skeptical of Heritage information(or is it mis-information?).

  18. jd351 says:

    Well make no mistake, I am not poet.
    But Ryan’s Plan is such a sitch!!!,
    Another big give away to f***king rich,
    And for the rest of us, it’s a Bitch

    Enough said!!!!!

  19. Irwin Fletcher says:

    @HarleyHoward:
    You are correct and No, they don’t care.
    By picking at someone else’s assumptions on a meaningless future unemployment percentage they can avoid the real issues, and the real purpose and emphasis of the spending plan, which is deficit reduction. This has become a political hack comment blog rather than one willing to discuss ideas with the goal of finding the best one. That’s why they blitz the Heritage numbers, but no one will bring up the numbers and percentages that Obama throws around, like an unemployment rate under 8%. Neither of these is really important. But if we can call each other names, and generalize, then we never have to discuss real issues or debate real ideas honestly.

  20. Thor says:

    Hah, I love how pointing out the truth is considered Left Wing political “spin”

    The hubris is astonishing, and the be so willfully stupid to boot. Jesus.

    Invictus you are doing and excellent job, please keep up the good work.

  21. Bob A says:

    “We used the blah blah blah” …

    translation courtesy of Google Translate:

    We just made stuff up to fit with the propaganda we are paid to produce
    We don’t just do this for fun you know.
    We do this for a living and the people who pay us tell us
    that either we come up with the BS they want
    or they’ll find somebody else who will.

  22. CHB says:

    Edward Hugh was real expert at this play. Pop up an apocalytic prognosis backed by ‘data’. Commenter points out how he got his facts wrong, used the wrong data set, didn’t understand it anyway, etcetera… and he’d just change the whole section, orphaning the comment stream.

    Who cares? About one reader in a million actually takes the trouble to see if the argument holds water.

  23. Julia Chestnut says:

    Invictus, Honey, in order to be scandalized you have to have shame, and enough moral compass to recognize that what you have done violates some standard.

    Heritage? None of those criteria even remotely apply. It’s a particularly repugnant pr group, nothing more.

  24. “The ruling class has the schools and press under its thumb.
    This enables it to sway the emotions of the masses.”
    – Albert Einstein
    (1879-1955) Physicist and Professor, Nobel Prize 1921
    http://quotes.liberty-tree.ca/quote_blog/Albert.Einstein.Quote.58C0

    “I begin by taking.
    I shall find scholars later
    to demonstrate my perfect right.”
    – Frederick the Great
    (1712-1786) King of Prussia, Frederick II
    http://quotes.liberty-tree.ca/quote_blog/Frederick.the.Great.Quote.2700

    “The philosophy of the classroom today
    will be the philosophy of government tomorrow.”
    – Abraham Lincoln
    (1809-1865) 16th US President
    http://quotes.liberty-tree.ca/quote_blog/Abraham.Lincoln.Quote.4147

  25. rktbrkr says:

    Don’t raise the bridge, lower the river dept!

    The BLS tweaked their unemployment calc a few mos ago and knocked .4% off the unemployment rate, equal to a good stimulus package, a few more tweaks and we’ll be at full employment.

  26. [...] Heritage Foundation full of sh*t about their budget numbers, caught redhanded changing them.  (TBP) [...]

  27. grumpyoldvet says:

    Fred and Harley……..Thanks for playing. Now you can leave for some intelligent conversation over at National Review or Redstate

  28. Transor Z says:

    1) The stated purpose of TBP is to discuss “Macro Perspective on the . . . Economy… .” Topics don’t get much more “macro” than the budget of the U.S.

    2) The Ryan budget was allegedly presented to illustrate a way to reduce deficits over 10 years. That makes patently absurd out-year assumptions fair game for critique.

    3) The problem of bias induced by ideology and/or bad faith presented to the general public in the guise of “data-driven analysis” has been one of BR’s pet topics on this blog for quite some time now. Posts on this topic have addressed crap analysis from both left- and right-leaning sources. Questionable analyses put forth by Treasury under Obama and the Fed (Obama re-appointed BB) have been discussed here AT LEAST weekly, on average, since Obama was elected. Indeed, I seem to recall BR expressing concerns about Obama’s PRE-ELECTION involvement and policy signaling back in fall 2008.

    4) BR’s criticism of Obama’s closest economic advisors (Geithner, Summers) could fairly be described as “consistently savage,” especially Summers.

    The trolling is really nauseating.

  29. Irwin Fletcher says:

    Yep. No room for debate here. That’s for sure.
    Name calling. Nice!

  30. wally says:

    “No room for debate here.”
    That’s a stupid statement. You can’t debate somebody who won’t recognize facts.

  31. DeDude says:

    If they want us to take their “research” serious they first need to not only state what model they used, but also all of the assumptions they made. Then other people can take their data plug it into the same model and get the same results. Maybe they did not account for the fact that when the federal government make a “spending cut” by shifting an expense to the states, then the states have to raise taxes to cover it. Someone else may want to run the model taking into account that these types of spending cuts reduce consumption because of increased state taxes.

    Second they need to explain this strange change. What mistake was made and how did that mistake get fixed. Why did the “fix” only affect the Ryan data not the Obama data? Did they use the same assumptions when they ran the Ryan data as when they ran the Obama data? Lots of strange things leading suggesting that these people are not professional scientists but partisan hacks and amateurs – and you got to be an idiot to take their conclusions serious.

    Now if they actually were trying to foster honest fact-based debate they would automatically have done that. However, if their goal simply was to produce right wing talking points that Fox can throw at their unsophisticated viewers, then I guess they did their job.

  32. Transor Z has the best comment that accurately frames the discussion. Kudos.

    Here’s a question that hasn’t been addressed. Why would Ryan sidestep the CBO and let Heritage run his numbers? What would happen if Obama let ThinkProgress run the official numbers for the 2013 budget? We’d cut right through the details and say he’s an idiot, it’s embarassing, and not a sign of an elected official acting with the best interests of the office and the country in mind.

    Now, lets go back to the discussion about data and Heritage.

  33. Irwin Fletcher says:

    Good points. Shouldn’t sidestep the CBO.

    Let’s talk about cutting the spending. Its out of control.
    Bowles and Simpson must be pissed the way they have been dissed.
    Erskine Bowles is one of the smartest guys around and has more personal wealth than most.
    He took a year of his time to try to serve the country and it gets ignored. Ridiculous.

  34. Lugnut says:

    Well, shenanigans or not, unless they get to the point of negotiating lopping at least a trillion dollars off of the budge deficit in the current year, its all deck chairs on the Titanic that are being shuffled around.

    The fiscal iceberg is dead ahead, and our leaders are arguing over whether to turn the wheel 1/2 a degree to port, or 3/4 of a degree. Silly really.

  35. DeDude says:

    Actually it is not spending that is out of control. Our spending as a % of GDP is not that far away from the historical norm, especially when you take into account that we have had to work ourselves out of a financial crisis and the greatest recession since the 30’ies. The thing that is out of control is tax-cuts and deductions/exemptions. When you look at corporate tax collection as a % of GDP and to a lesser extend income tax collection as a % of GDP you will understand why we have such a huge deficit in the federal budget. The one part of spending that could be claimed to be out of control (both as % of GDP and compared to other countries) is national security and defense. However, neither Ryan nor Obama is taking any real steps to bring that down to a reasonable level.

  36. VennData says:

    Can somebody please look into the Heritage Foundation’s tax exempt status.

    Shouldn’t they be taxed at the same rate as the National Enquirer and the other tabloids?

    http://www.nationalenquirer.com/

  37. pekoe says:

    First look at the data presented:

    1. No one knows the actual unemployment rate, even in retrospect. Yet here we see it inscribed to four significant digits—i.e., out to 0.001% Wow. Whoever wrote this was a complete idiot who does not understand error and numbers. Pure propaganda.

    2. They then project this astonishing BS forward 10 years when the truth is they have no clue what unemployment will be next month.

    3. This is the same outfit that cannot even project the next year’s GDP within an error that distinguishes between modest growth and frank recession.

    Economists are just a more dishonest version of the old witch doctor. Really. Rich people and companies hire them to spew a line of BS designed to put their “invisible hand” into your pocket. Like bad religion.

  38. gman says:

    Anytime you see something from Heritage, remember their TWO big calls in the last decade 1. Iraq war, sure of WMD and that it would pay for itself! 2. Bush Tax cuts..also sure they would pay for themselves and ensure long term prosperity.

    Other than having the backing of a couple dozen oligarchs,why are they still taken seriously?