Budget: The Financial Times‘s Sloppiness

We should expect politicians to lie, or at least to make misleading statements, whenever they can get away with it. But we would normally expect the Financial Times to be careful with information (which is why I have been an addict to this newspaper for most of my life). An exception is their story of yesterday on president Joe Biden’s proposed budget (“Biden Proposes Big Tax Rises in Budget to Shave $3tn off US Deficit,” March 9, 2023):

According to the economic assumptions underpinning the budget, the White House expects the consumer price index to fall to 4.3 per cent in 2023 and 2.4 per cent in 2024 — a significant step down from its current 6.4 per cent level. The unemployment rate, meanwhile, is projected to rise to 4.3 per cent in 2023 and climb another 0.3 per cent in 2024 to peak at 4.6 per cent.

There was still no erratum or correction at 10:48 Eastern Time today, nearly 24 hours after the original publication online

The first sentence is simply false, or totally nonsensical. The consumer price index (CPI) is an index of the general price level. The index stood at at 296.797 in December 2022. It can never ever be 4.3% or 2.4% (contrary to the  unemployment rate, reported in the second sentence, which is a percentage by definition). What the Financial Times means is that the consumer price index is expected to continue increasing by (a change) 4.3% in 2023 and 2.4% in 2024, but at a slower rate than the increase of  6.4% from January 2022 to January 2023. These percentages are the inflation rates of the CPI level. (More technically and precisely, they are the inflation rates as estimated by the changes in the CPI level.)

The Wall Street Journal did not commit this elementary error.

We should discount the possibility that the Financial Times journalists or their editor don’t know the difference between a level and a change, between the value of a variable and its first difference. Is it just very sloppy writing or editing, then? Note that replacing “to” with “by” in the first sentence is still incorrect, for inflation will continue to increase according to the government’s own assumptions. Errare humanum est, of course, but the Financial Times has accustomed its readers to higher standards.

I cannot find the same error in the government’s actual budget documents. So the Financial Times can probably not pretend that they just reproduced a government’s blurb without quotation marks, which would be at least as inexcusable anyway.

The elementary confusion between a variable’s level and its change often leads to more consequential problems and is a choice means of governments’ subliminal propaganda. For example, a budget deficit corresponds to an increase (a change) in the level of the public debt. When Biden writes that his budget is “lowering deficits by nearly $3 trillion over the next decade,” he means that the otherwise forecasted accumulated deficits of $19.9 trillion over the coming 10 years are now forecasted to be reduced by $2.9 trillion (largely through his tax increases). But this means that the accumulated deficits will have added $17 trillion (a change) to the public debt level over that period. Upon reflection, the title of the Financial Times story is also misleading.

Especially on the first error, the only other excuse I imagine the Financial Times could find is to claim that its readers are sophisticated enough know all this; and that it can consequently afford impressionistic writing. Risky assumption! And if it had a strong connection to reality, what would be the use of analysis? Why doesn’t the Financial Times just publish quotes from the government budget documents along with a few tables (notably Table S-9 on “Economic Assumptions”)? Or even better, simply give a link the White House budget web pages?