Sunday, September 14, 2008

Economics & Mathematics - Journalism essentials?

As a journalism major, I'm always interested in stories that have to do with journalists, their education, and their schools. Where is the major going? And what do experts have to say about it?

I recently read a blog that brought a large error to my attention. In the New York Times, there was an article about corporations not paying taxes. Go follow the link and head to the bottom of the page. You'll find a correction there - apparently their journalists (or editors, for this case) didn't know the difference between revenue and profit.

More in-depth information about the "why" behind this huge mistake can be found here . Here is an excerpt, offering background information on their mistake:

"Yesterday the New York Times ran a story on a study by the Government Accountability Office that was commissioned by Democratic Senators Carl Levin and Byron Dorgan. The study found that from 1998 to 2005, two out of three American corporations didn't pay any corporate income taxes. Levin and Dorgan trumpeted this finding as though it meant something.
As usual, the Democrats were preying on ignorance. As Levin and Dorgan undoubtedly know, most small businesses, and many large ones, don't pay federal income taxes because they don't make any money. Most companies, especially small ones, pay their employees, after which there is nothing left to report as profit. Those salaries, of course, are taxed as ordinary income. If the corporations are Subchapter S, any earnings are passed through to the owner(s) and taxed at that level. The idea that "corporations" represent some kind of magical money pot for the government to steal from is just one more Democratic Party fantasy. On the contrary, the United States has the second-highest corporate income tax rates in the world, a fact that hurts our economy badly. As dumb as the Levin-Dorgan press release was, however, it wasn't dumb enough for the New York Times. The paper got out its calculator, multiplied the gross revenues of the companies in the GAO study by 35%, and came up with this classic of economic ignorance: 'At a basic corporate tax rate of 35 percent, all the corporations covered in the study in theory owed $875 billion in federal income taxes.' In theory, a company pays 35% of its net income to the feds, not its gross receipts. That reporters and editors at the New York Times should be ignorant of this basic fact is shocking. How in the world can these people purport to instruct the rest of us on economic matters, when they lack the most fundamental understanding of how our tax system works?"

This whole ordeal really took me by surprise. I guess that as a journalism major, we tend to focus solely on the aspects of writing and reporting, as well as ethics. But how ethical is it to make such broad, hasty assumptions, like the ones made in the NY Times article? To state that corporations owed $875 billion in federal income taxes, when corporations are typically taxed on their profit (net income) rather than their revenue, is a major ethical issue.

I personally dislike mathematics and things that have to do with numbers. Many journalism majors probably do, considering the fact that they have chosen to devote their careers to the written word rather than number crunching. But I am convicted about my responsibility to stay educated in all matters that I may need to report on in the future - this includes history, political science, international affairs, and yes, economics.

Right now, the University of Florida School of Journalism requires an economics class of every student who wishes to graduate with a journalism degree. I think that is an awesome idea. I plan to take a basic economics class in the spring, but then if I have room in my schedule, I would definitely take more of them. Learning about the math behind our nation's economy is both beneficial and imperative for today's journalists.

For those interested, NewsUniversity offers an online class entitled "Math for Journalists." If you have some spare time, go through the course and let me know what you think. Hopefully I can join in on this class and use it as a mathematical refresher.


G.T. Wilder said...
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G.T. Wilder said...
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G.T. Wilder said...

Your right, Journalists have a responsibility to stay educated in the areas they report on.

The difference between net and gross income is probably unknown among many americans. Just because the average citizen is ignorant on certain issues is no excuse for writers to be ignorant as well.

Writers have to be able to lift readers up to a higher level of understanding by clearly presenting well thought out factual stories.

Madison said...

As a young child would say, "that is a big boo boo" for the New York Times.

The writers of the New York Times were ignorant in ignoring the reality that the United States would have chased the corporations if they owed $875 billion in debt. Although I am not a guru in economics, it seems illogical that such a financial blunder would exist. The IRS is smarter than that!

On another note, I agree that journalists should be well rounded, not only in different media sources (i.e. internet and video), but in subjects such as political science, economics, and international affairs. Knowledge is power, and having such basic knowledge can help a journalist get farther in the business.

Pillarmerech said...

I completely agree with you that journalists should know better then to blindly write about something they should know better on. I'm a journalism major as well, and I too hate math. However, even though I do not like math or learning about the economy I know that it's important to my education and understanding of how the world works. The job of a journalist is to report about everything, so our need to know enough about a lot of subjects is important to our careers. The fact that the journalists involved were so ready to write about a topic they knew nothing about and call it a big to do is shameful as a journalism major. You would think that before writing a story or publishing it that someone would have caught their mistake, right? But unfortunetly it is not the case and journalists take another blow in credibility because of a few ignorant beans in the bunch.

To switch gears, your blog post was very well written and timely. I think that reminding us, as journalists, to be careful can never go out of style. We must all remember to research our articles and make sure that we have the right information to back up what we say. Bravo on the topic find!

Joshua said...

Great analysis, Leah. Jack asked that I post a link to your article on his blog -

Josh Kaufmann
for Jack Hoogendyk
Candidate for U.S. Senate

Aleeyah D. said...

In news writing, accuracy is essential no matter the size of the story. However, Levin and Dorgan did the exact opposite by carelessly covering an issue that they thought would make news headline. If you are going to inform an audience about a subject which you have little knowledge of, it would be wise to research its topic before uttering nonsense.

adam90 said...

That is pretty scary that a big newspaper like the NY Times would put false info out there like that.

It just goes to show that you should always check and double check before putting something into print.

I am also a journalism major, and I know that I would be very embarrassed to have such a big foul-up like that on my record.

Therefore, I always try to verify things from multiple sources before I include it in an article or paper.

c.nolan said...
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c.nolan said...

They are called 527s. I don't know why they exist. Most likely because they are major contributors to political campaigns.