Free Market Project's Charles Simpson has just published a detailed fisking of Washington Post reporter Jonathan Weisman's partisan and skewed accounting of the success of the Bush tax cuts, particularly dividend tax cuts.
Of particular interest, Simpson notes that Weisman fell hook, line, and sinker for a flawed study by a handful of Federal Reserve economists. Portions in bold are my emphasis:
Weisman hyped a flawed report from the Federal Reserve Board to draw the conclusion that the earlier dividend tax cut package “had no real impact on the stock market and prompted ‘only muted gain in total corporate payouts.’
Weisman’s faith in that study was misplaced. According to a December 6 Wall Street Journal article, the Fed study had such a small “event window” that it can hardly be taken as conclusive. According to the Journal: “The economists tracked stock performance during a few days in early January, after the Bush Administration officially announced the tax cut proposal,” and on a couple of other arbitrary dates. Apparently, the $4 trillion growth of the market since 2003 didn’t factor into the conclusion. Much like Weisman’s story, the Fed “cherry picked” data for the study.
While Weisman did find comment from conservatives, he only offered them enough ink for vague talking points while hyping detailed numbers, studies, and analysis from liberal groups. Saying “Our economic policies have done the trick,” didn’t carry near the authority of a Federal Reserve Board study, even if that study was fundamentally unsound.