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The New York Times published a very harsh correction today, based largely on FDL reporting about MIT professor Jonathan Gruber’s failure to disclose a financial relationship with the Obama Administration while writing op-eds and giving quotes for stories in support of key elements of health reform preferred by the White House. This is pretty strong language for a correction:
On July 12, the Op-Ed page published an article by Jonathan Gruber, a professor of economics at M.I.T., on health insurance and taxation. On Friday, Professor Gruber confirmed reports that he is a paid consultant to the Department of Health and Human Services, and that his contract was in effect when he published his article. The article did not disclose this relationship to readers.
Like other writers for the Op-Ed page, Professor Gruber signed a contract that obligated him to tell editors of such a relationship. Had editors been aware of Professor Gruber’s government ties, the Op-Ed page would have insisted on disclosure or not published his article. (emphasis mine)
So Gruber violated a signed contract by failing to disclose his financial relationship with HHS. And this is one of dozens, if not hundreds, of op-eds, articles and the like which Gruber either wrote or supplied a quote for between March 2009 and today, all while under contract.
The disclosure was selective; he apparently told a Boston Globe reporter last year that he was under contract, and the Globe has called him “an advisor to the Administration” in their stories, but Ron Brownstein, who wrote a prominent article featuring Gruber which the White House used to buttress their claims about cost control in the bill, had no idea about the contract. And now we know that the Times editors didn’t know about the HHS contract, either.
However, in the same paper that this correction appears, the Times runs an article by Steven Greenhouse about the excise tax on high-end insurance plans, and it quotes Gruber without disclosure.
Jonathan Gruber, a Massachusetts Institute of Technology economist, predicted the excise tax would raise workers’ wages from 2010 to 2019. “There are many academic studies showing that when health costs rise, wages fall,” he said. “In the mid- and late 1990s, when we got health costs under control, wages rose nicely.” But he added that other factors could have also lifted wages during that period.
Set aside the reverse-engineered, logically suspect argument that if wages fall when health costs rise, they must rise when health costs fall, the common one made by Gruber and other supporters of the excise tax. But this is really incredible. The New York Times issues a correction on failing to disclose Gruber’s financial relationship, and in the same paper they… fail to disclose Gruber’s financial relationship?
The editorial and news staffs need to have a powwow.
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“Hello Left Hand. My name is Right Hand”.
It goes without saying that MIT professors have research grant and contracts with the federal agencies that fund research in their area. It’s part of their job. Otherwise, they don’t get tenure. It’s expected of them. But technically such contracts are between MIT and the granting agency. The principal investigator is paid to work on those grants and contracts.
It is also expected that faculty will do consulting work that does not go through their university, just as a professor of surgery might also have a surgery practice.
I’m told that it has also long been public knowledge that Gruber did such consulting work for the Obama campaign and now works as a consultant for the White House. Per the Wikipedia:
It’s presumed that such academic consultants get paid, just as it is presumed that lawyers get paid.
Does Gruber’s contract with NYT require him to disclose things that are implicit in his Wikipedia entry?
Since when is wikipedia the standard for what is “common or public knowledge?”
I’ve been looking for the sites I visited yesterday of various writers who had interviewed Gruber without having a clue about the contract, and one in particular who delivered a mea culpa, saying he thought “everybody knew”, and now realized even most journalists he knew did not know.
Check out Marcy’s several posts yesterday; I’m sure I followed the links from there. And read some of the comments, too, showing the circularity of Administration shills quoting Gruber, as an independent authority, without acknowledging Gruber advised them.
Oh, and as for the “left hand” vs the “right hand” at the Times; I blame it on, among other things, the fact that newspapers having been cutting costs by reducing editor staff, as well as reporters. It’s obvious, if only in the egregious grammatical, spelling, and words-that-don’t-mean-what-the-writer-thiknks-they-mean in Times stories the last couple years.
Just like I have been saying all along. Money Gruber.
Given his economics, it’s hard to believe he could get a job teaching HS economics.
They frequently do, though less often than the WSJ pre-Bush Rupert Murdoch.
Not the first time the New York Times did not do their homework. Will probably not be the last. Just talk to those who have survived in Iraq about false NYT’s reporting.
Maybe the Guaranteed Healthcare Access Plan sounds too good to be true. How much more will it cost? It will not cost any more than we are paying today. By using a standard benefits package open to all Americans, there will be huge savings from reduced administrative costs to insurance companies.
The end of Medicaid, SCHIP, and coverage of state employees, will produce huge savings — decreasing state budgets by about a third. Similarly, phasing out of Medicare reduces federal taxes. When employers stop providing health insurance, workers’ wages will increase commensurately. Instead Americans would pay a dedicated Value Added Tax.” Sustainable Health Care Reform”,Ezekiel Emmanuel,July 24,2008-Huff Po
Emanuel: Sustainable Health Care ReformJul 24, 2008 … The special tax benefits related to employer based coverage will ….. excise them completely from the health care system in this country. …
http://www.huffingtonpost.com/zeke-emanuel/sustainable-health-care-r_b_114788.html – Cached – Similar
The claim that “everybody knew” as a rationale for Gruber not having to disclose his financial relationship with Camp Obama for each publication he submits to won’t wash. That applies to common knowledge things like whether someone is married or holds a doctorate, not to financial relationships that might pose conflicts.
Ed Whitacre doesn’t have to disclose that his views about GM are biased; he “runs” the place. A U of M business school professor would have to disclose paid consultancy work for GM. Otherwise, his or her comments would reasonably be taken as those of an objective outsider, whose biases are more likely to be indirect and institutional. (They would come via GM’s support for his or her university or faculty, or for SE Michigan in general).
Ditto for the good doctor in Cambridge. He knows it, too, and so does everybody involved, from the WH on down. That this is suddenly an own goal by Dr. Gruber suggests that the WH was happy as a clam, too, that he was taken for a disinterested researcher. That, in turn, suggests planning as much as it does forgetfulness.
eCAHN– Would you say that his oh-so-ver-complex-but-very-wonderful “model” that only-he can interpret/make work, is kinda parallel to the horribly complex, ridiculously risky, but completely incomprehensible “innovations” that brought the banks down (but for TARP and us)?
I’m thinking of it because I just got a job posting alert:
“The candidate will support the firm’s global derivatives business by…” [italics mine]
Oh, it’s — wait for it — Citibank. Multiple openings.
Guess they’re ramping up for the next phase.
Thanks, earl. And as I said in another place, it’s a sure thing the “average” reader of news with no personal experience of academics would in no way make such assumptions or “know” this alleged “public knowledge.”
Gruber’s model, from what I know about it (described in one of Marcy’s posts) seems to be the height of simplicity. He looked for a period that fit the outcome he wanted, aka data mining. That seems to be the long & short of it. Except for all the other unwarranted implications he draws from it, this being the most important one:
As for Citibank et al gearing up again, yesiree. They didn’t even pretend to do “reform” like they did after Enron. So off to the races again.
You could say that about quite a few economists, I think. The prominence of some seems to have more to do with how convenient the rich find their ideas than with how well thought out they are. The Chicago School comes to mind as an example.
Agreed.
Gruber did as Gruber was told by this administration, get used to it.
Didn’t the Times also know about secret wire-tapping and fail to disclose it until after the 2004 election? No goddamn wonder their newspaper is heading down the shitter.
I’ll quibble a bit on Chicago School. I think its founder, Milton Friedman, was sincere. The followers probably mostly did it for political expediency and fame.
” By using a standard benefits package open to all Americans, there will be huge savings from reduced administrative costs to insurance companies.”
___
There will likely be reduced access to actual health care in the aggregate.
Wow. The height of simplicity, indeed.
And I was working so hard to understand….
Certainly worth $364,000, eh?
LOL. Right up there with Gaussian Copula. Look what that gave us.
That quote would apply to a public insurer, whose remit is to provide a quality service at the lowest cost possible to taxpayers.
For insuresters (as with any big corporation) – who are often monopolists in the multiple markets into which the US is divided – the assumption that a cost reduction translates into lower prices instead of higher profits beggars belief. It is willful blindness.
“That quote would apply to a public insurer”
___
Precisely what our key
senatorsLords will disallow.See Krugman’s blog for his take on the earned demise of the freshwater Chicago school.
On the other hand, his recommendation that the excise tax is, “on balance, a good idea” is farcical. Though he claims it is based on basic economics, his conclusion that lower insurance premiums will generate higher wages doesn’t seem to fit today’s business model.
His claim that the delay in implementing it will allow labor to renegotiate their packages with management – and intended, desired outcome of this tax – also doesn’t seem to factor in the leverage lost by unions and rank and file labor. That is especially true with one recession in hand and another on the way. Jobs are harder to find and harder to keep. That always gives employers more leverage to Just.Say.No.
Ben smith has a useful article here. It contains a link to the actual contract as well as a response from Gruber.
“Jonathan Gruber, a Massachusetts Institute of Technology economist, predicted the excise tax would raise workers’ wages from 2010 to 2019. “There are many academic studies showing that when health costs rise, wages fall,” he said. “In the mid- and late 1990s, when we got health costs under control, wages rose nicely.” But he added that other factors could have also lifted wages during that period.”
(my bold and emphasis)
FWIW, in the mid- and late 1990′s, I worked for a major telecom company as a Distinguished Member of Ttechnical Staff, and received exactly zero raises or bonuses for a period of 5 years, as did all of my co-workers. And my company sponsored health insurance payments went up, up and away, as did my co-pays and out of pocket limits. During this same period, my company and many other telcom’s were laying off hundreds of thousands of workers. The CEO’s and other executives may have been getting raises and paying less for their insurance, but the lowly workers certainly were not. In my opinion, Gruber is dead wrong on both counts.
“The combination of economic and political power in the same hands is a sure recipe for tyranny.”
–Rose and Milton Friedman in ” Free to Choose”
Completely consistent, huh? Consistently wrong assumptions, consistently cherry-picking, consistently failing to see the real world (employers costs go down, wages go up? Riiiiiiight.)
You won’t get any argument from me there.
What I have been pondering is to whatdegree that Zeke Emmanuel’s views may have or may not have had similarities to Gruber’s findings.
I have posted several comments today about him (EE) over at EW’s thread “Gruber Did Not Disclose to WaPo”.
“There are many academic studies showing that when health costs rise, wages fall,” he said.
___
Yeah, my, my, how muthuhfucking scientific.
Y’know “Clinical Studies At The Ponds Institute” long ago “Proved” that putting some expensive goop on your face made you look younger. Some actor in a lab whitecoat told me so right there on the TeeVee.
“many studies” “show” whatever the fuck you want them to, artfully selected. Particularly “academic” ones.
Thanks for the Krugman link.
Krugman is a mixed picture. When he was here on 12/4/08, he thought Obama’s economics team was top notch, despite selise, Hugh and me triple-teaming him on it.
Choice quote.
Median wages in the U.S. rose in the late 1990s when the unemployment rate got in the neighborhood of 4%. Wages only rise in real terms when unemployment is so low that corps are forced to bid workers away from each other.
Sounds like he wants a place at the table.
It’s almost over:
The
SenateHouse of Lords will get its handsomely paid-for way.Welcome to GruberDogLake
After ignoring multiple questions, he finally defended himself by saying that he “knew” those people, he’d been in meetings with them, and he thought they were solid citizens, also reminding us that Bernanke was the one who hired him at Princeton. He never addressed the substance of our Qs about O’s team being the architects of the financial crash when they were in the Clinton Admin.
So no, I think he wasn’t saying that because he wanted a post (though he might), but rather because he has a genuine blind spot. As he does on the issue of wages rising if insurance benefits are taxed. JMO.
That’s funny. LOL.
I read a bit of Friedman’s stuff back in the day, and I suspect you’re right. In fact, what I remember of his writings about how regulators are inevitably controlled by the regulatees is something that influences my own thinking to this day. Anyway, I don’t think that matters – the important point is that if the opinion was useful, lots of folks with money would be happy to create endowments and grants so these folks can continue to work doing what they do.
Exactly.
As I mentioned in my Seminal diary that got posted at the same time as David’s article:
What every the workers lose now in terms of crappier health coverage will not be regained for many many years, if ever.
George Stigler is the one usually attributed with the capture theory of regulation.
Or FireGruberDogLake.
The best part about Krugman’s column today:
Right. We really don’t know. /snark
What I read was, as I remember now, from the popular press. Friedman was probably just repeating principles he’d learned from others. Still, he made a good case. Just not enough to convince me that all regulation was ultimately futile, which seemed to be his premise.
Gruber’s dog.
Regulation, if reasonably done, can act like a speed limit. It does not make people drive at or under the limit, but it does contribute to people driving more slowly than otherwise.
I now have 398 days to Medicare eligibility. Just stay healthy…
In fact, it’s looking like I may soon get my old job back (with our Medicare QIO, no less), after being laid off for almost 3 years (they called me in to interview). My compensation negotiation hole card will be to opt out of the health coverage (given that I’m now on my wife’s employer-based plan). A factor in my getting caught up in the 2007 10% staff RIF was my age and health coverage cost to them.
Yeah, I know, “Medicare ain’t perfect…” blah, blah, blah…
LOL! Priceless. Thanks for that.
Death Panels.
You’re so short you could parachute off a dime!
In one sense, he’s right. But we also know where the costs are, and can try to reduce the ones that are the most superfluous, like insurance.
707!
We gonna start that up again? Hah!
Yes, essentially it lowers or raises the average, depending on what we’re talking about. If the existence of violations were evidence of futility, we shouldn’t even have laws against murder.
Yep. He’s walking under the doors now.
Amazing what a little google can find.
Ha! Excellent rebuttal. I’m stealing it.
Not for nothing, the NYT staff could have cross-checked with the staff at the Boston Globe, seeing as how both papers are … owned by the same company.
Talk to whomever I stole it from.
Of course we know:
* We pay three times as much per pill as the rest of the industrialized world, which costs us an incremental $204 billion per year.
* We pay ten times as much for insurance (per dollar of care) as the rest of the industrialized world, which costs us another $202 billion per year.
* We pay six times as much for paperwork (per dollar of healthcare) as the rest of the industrialized world, which costs us another $620 billion per year.
That a trillion dollars per year that we’re being ripped off.
In that case, I’m very disappointed in him. But it’s not the first time.
‘Full disclosure’– what a concept: As stated in the correction, Gruber signed a contract that obligated him to tell editors his paid consultancy relationship w/ the HHS; this is happening across the media spectrum and is not just confined to daily newspaper op-ed.
The FTC has recently announced plans to require bloggers and celebrity
endorsers to disclose gifts or payments from vendors and others seeking
the bloggers’ positive comments online. Gruber is no different than conservative talk show hosts, bloggers, celebrity endorsers, Wall Street tipsters, etc. who’ve been discovered taking payments under-the-table for promoting and/or spinning stuff favorable to the payor.
This practice is wide-spread. And it would be nice to see the Feds display
the same zeal when they went after disc jockeys for taking payoffs for promoting and spinning tunes (I remember the good ol’ days when they threw DJ’s like the late Alan Freed in the slammer for payola).
Perhaps this is a job for Mssrs. Ralph Nadar and Elliot Spitzer (they both
have experience in busting money grubbing payola-takers)
Sic ‘em, boys–sic ‘em!
But that would mean they’d have to do actual research and journalism! /s
Not to mention, the health industry wages must be alot higher than the rest of the industrialized world. How else could we attract so many doctors and nurses from other nations including Canada? Nurses and doctors are recruited, and come for the big bucks. Maybe that’s the problem. Maybe other nation’s socialized professionals don’t follow the greed motto?
So with all the cutbacks at NYT, can we expect more fraudulent and plagiristic journalism scandals soon?
Like I said, the CEO’s and other execs were probably getting raises, and I would guess that all those 6 figure salaries going to 7 figures would move the median wage, especially when most of the 5 figure salaries were stagnant. The median wage may have increased, but I believe that hundreds of thousands of people did not see much of any wage increases in this time period. As you know, there are lies, damn lies, and statistics.
OCED data says otherwise. It says that the average wage (as a multiple of per-capita GDP) for U.S. healthcare workers is 1.4 compared to 1.3 for the average of the rest of the industrialized world (i.e., OCED nations). See “How Much Do Doctors in Other Countries Make?”, by Catherine Rampell, July 15, 2009, economix blog at New York Times
I have had lots of public-tit grifters tell me “everyone knows that” or “do you expect me to disclose that every time I write something or get quoted” when they were called on failing to disclose conflict of interest. I even hear it from two-bit grifters in community politics in LA or involved with transportation issues.
They know it is wrong.
You would think a Prof from MIT would come up with a better excuse than the ones used by small-time grifters.
Book Salon up at the Mothership with Ethan Brown’s Shake the Devil Off: A True Story of the Murder That Rocked New Orleans hosted by Suzanne
One of the first things I was taught during my limited time as a direct federal employee was that if it was the appearance of a conflict of a interest, it was, by definition, a conflict of interest.
That did not change when I became a support contractor.
this was classic PR astro-turfing by Rahm. He engaged Gruber to whore for the excise tax. Gruber did so. Rahm then turned around and cited it as big news after also arranging for Gruber to be fed as a source to folks like Brownstein.
Profs are whores for sale in many places. Their are so many of them at prominent places that if you are a devious, no-holds-barred player (who also thinks that he is smarter than everyone else) like say Cheney or Rahm or Rove, you can always find a prominent academic who will write a research paper that supports your policy.
That sounds like some of the stuff they tell us at work – it boils down to ‘if you don’t want people to see it on the front page of the newspaper, don’t do it‘. There are all kinds of rules about who we can talk to – it’s a corporation with regulated parts and unregulated parts, so it does matter, it gets into anti-trust and stuff like that.
That Gruber seems to be unaware of this sort of thing indicates to me that he might be genuinely stupid (unlikely), really ingenuous (improbable), badly advised (possible), or self-important to the point of believing that all those rules don’t apply to him.
there is another alternative; he knew it was wrong and that disclosing it would make him look bad.
it also wasnt part of the deal with Rahm.
i did not know that in economics at mit it is “expected that faculty will do consulting work that does not go through their university” and i did not know that he was being paid hundreds of thousands of dollars as a consultant by the administration at the same time he was advocating for the senate and house bills and i don’t think that info is “implicit in his wikipedia entry.”
on his reports in nov he only listed the mit affiliation (unless i’m blind and missing something). here’s one of his nov reports, maybe someone can point out to me what should have clued me in:
http://www.politico.com/static/PPM145_final_try.html
If I understand correctly, for people in “professional schools,” e.g., business (which often includes applied economics), engineering, medicine, outside practice is pretty much expected. It’s not at all uncommon in the sciences especially the applied biological sciences.
From what I know that’s a very large amount, depending on the length of the contract and whatever expenses he might incur.
Also, there is pressure on federal agencies to run such contracts through the university to support graduate students, postdocs, etc. In such a case nothing goes into the professors pocket over and above his normal salary, except that the contract can provide summer salary, etc.
What the Wikipedia says is:
I would not expect that he provides those estimates gratis.
Aluminum tubes.
but was it public knowledge? if it was public knowledge that he was now working as a consultant for the white house, wouldn’t you have know it without having to be told it was so?
mostly just guessing here… i didn’t think it was necessarily unusual, but i’m surprised to hear it’s expected since it doesn’t provide any benefit to the institution (mit in this case). in any event, i don’t think it’s widely known or fair to assume the reader of gruber’s reports should know it.
where i really disagree with you though is that “frequently” (per wikipedia) does not equal or imply “currently” and while i would assume he was paid for his time, i am astonished at the amount.
so, i do think he should have disclosed the association on his opeds and on his public reports that he sent to opinion makers (ezra klein, for example). to avoid doing so, does imo give the appearance of attempting to present his opinion as that of an independent specialist.
what makes the whole thing so frustrating to me is that i think his reports (the two i read) were so flawed (i thought that in nov when i read them).
I am inclined to agree with you.
I am curious as to whether Rahm’s NIH brother was influential in the selection of Gruber.
I posted several comments about said brother,Zeke Emmanuel, over at EW’s thread “Gruber did not Disclose Conflict to the WaPo”.
He answered “No.” in the Washington Post form about conflicts of interest. By your logic, his answer meant that the Wikipedia information is false.
But we all know the contract exists. So what is your opinion about his negative answer?
I stopped paying attention to the NYT when they helped cheerlead the Iraq Fiasco into being. and then there was that reporter that made up stories. They obviously haven’t improved since either failure to journalism.
From Urban Dictionary
“Keep yo daughtas way from dat chil… Dat boys a gruber!”
-Harriet Tubman