## Richard A. Posner's Ethical Lapses

Richard Posner writes dishonestly about the Obama stimulus package. I count at least seven major ethical lapses in his piece.[2]

Richard A. Posner: [Council of Economic Advisers Chair Christina] Romer argues in her talk that by the end of the second quarter of this year, $100 billion of stimulus money had been spent. That is a suspiciously round number, and it is unclear how it was arrived at... But consider Mark Zandi: Mark Zandi was one of John McCain's most senior economic advisors last fall. Mark Zandi's estimates of stimulus spend-out are that it amounted to$89 billion as of the end of June--$2 billion in February,$7 billion in March, $13 billion in April,$32 billion in May, and $35 billion in June; with (so far) about 60% of the spend-out coming in the form of tax cuts and about 40% in the form of aid to states (with a trivial amount in direct federal government spending): ###### Source:Mark Zandi, http:/www.economy.com The number is "suspiciously round" because Christina Romer is rounding it: this is a talk, whereby the audience is supposed to take in information through its ears, and rounding things to one significant figure is something you do to make your talks informative. Posner's snide and sneering implication that Christina Romer is bulls---ing her audience is false--unless, of course he wants readers to also believe that long-time Republican Mark Zandi and many others as well are corrupt and in the pay of the Obama administration. If I were Richard Posner, I would under no circumstances publish this piece in Great Britain. Just saying. It gets worse. Posner goes on, demonstrating nothing either his lack of facility with arithmetic or his willingness to play intellectual three-card-monte: [Christina Romer] then argues that this small expenditure [of$100 billion]--about two-thirds of one percent of the Gross Domestic Product--is responsible for the fact that the decline in GDP fell (on an annualized basis) from 6.2 percent in the first quarter of the year to 1 percent in the second quarter (though the latter figure is likely to be readjusted upwards)...
Posner is trying to get his readers to compare the number 5 (the percentage-point swing in the growth rate between the first and the second quarter of 2009) to the number 2/3 (the percentage share of second-quarter stimulus expenditures to annual GDP). He hopes that they will conclude that Christina Romer's claims are wrong because the effect is disproportionate to the cause: $1 of stimulus could not reasonably be expected to produce$7.5 of boost within the same quarter. But the stimulus money spent in the second quarter was spent in one quarter, so the right yardstick to use to evaluate it is not annual but rather quarterly GDP--stimulus spending in the second quarter was not 2/3 of one percent but 2.6% percent. And the level of production in the economy in the first quarter was not 6% but rather 1.5% below its level in the fourth quarter--the 6% number is not the decline from one quarter to the next but rather the rate of decline, how much the decline would be after a year were it to go on for four quarters. So the right comparison is 1.5% to 2.6%[1].