Friday, January 11, 2013

Wherein Joe Weisenthal Defines "A Lot"

Business Insider's  Joe Weisenthal steps up on the BI "lets have bigger government"pulpit for more statist propaganda from the organization.

Writes Weisenthal:
...the idea that the US pays a lot in taxes in objectively false on a global basis
Since  "a lot" is a subjective term and not an objective concept, how does Weisenthal reach this magical conclusion. He runs this chart, among others:

One problem with Weisenthal's logic is that just because others are doing more of something, doesn't mean those doing less are not still doing "a lot." Hitler and Stalin killed tens of millions, but that doesn't mean that Adam Lanza at Sandy Hook didn't kill "a lot." "A lot" is a subjective term. 

Indeed, if we look at Weisenthal's chart, it should be noted that Italy and France are on it, as bigger spenders than the US. But they both have had recent problems with their costs of raising money in the markets (though the problems fluctuate) because of the amount of government spending going on in these countries. Should spending be compared to these countries to determine policy? Should we really be saying, "Hey everything is cool because we are not spending as much as Italy?" On a personal level this would be like justifying spending binges by saying, "Hey, when Mike Tyson had money, he spent more percentage wise than me."

Spending isn't a comparison game, the way Weisenthal would like it to be. It's about the logic of the spending in the first place. And a very strong case can be made that US government spending is totally out of control at current levels. 

The other points raised by Weisenthal in his post are also headshakers. He writes:
Germany is usually considered a model of austerity and restraint, and it spends way more than the US does.
Again, we are running into the comparison fallacy. Germany is in a better financial situation than other eurozone countries, but there isn't a serious financial analyst who would look at Germany's financial situation and call it sound. Indeed, Germany has not been without some financial trembles of its own, already. LaTi reported in November 2011:

How could things get worse in Europe? Try this: Now Germany is having trouble finding investors to buy its bonds.
The German treasury could only sell about two-thirds of the $8.1 billion in 10-year bonds it wanted to issue on Wednesday, which sent market yields higher on German debt and across the Eurozone.
It isn’t unheard of for German bond sales to come up short. But at a time like this -- with investors already fleeing bonds of most other Eurozone countries -- the disappointing sale stoked fears that the continent’s debt crisis has reached a dangerous new tipping point.
Finally, here is Weisenthal's most absurd comment:
 The other thing that's surprising is that Japan is usually considered a model of reckless profligacy--and it spends less as a share of GDP than the US does.
Why is Weisenthal bringing up Japan's model of reckless profligacy as a surprise, just because its spending relative to GDP is low?  Japan's outstanding debt now equals 214% of its gross domestic product. Japan's debt is out of control. It is reckless. All that the low government spending relative to GDP and simultaneous high debt means is that relative to spending, Japan's taxes are very low (which is how they get the large debt, they borrow for spending as opposed to tax the citizens). In other words, in a post dedicated to showing that "objectively" US taxes payers don't pay "a lot," he includes Japanese data, even though the high debt (and lower spending) relative to GDP, means that Japan's comparative taxes relative to spending are lower than that of the US.

Bottom line: The only thing that can be said about Weisenthal's post is that there is "a lot" of confusion.


  1. So Weisenthal is doubling-down on an appeal to common practice fallacy with its entire basis pinned on a lousy, myopic, massively aggregated data metric?

    Thanks to EPJ for reminding me why I don't pay attention to Business Insider.

  2. His Twitter response to your post was "Weak argument." Seriously, he addressed nothing.