Does "lowest" mean something different in Georgia than it does in Texas?

Today PolitiFact National, posing as PolitiFact Georgia, called it "Mostly True" that Georgia has the lowest minimum wage in the United States.

Georgia law sets the minimum wage at $5.15 per hour, the same rate Wyoming uses, and the federal minimum wage of $7.25 applies to all but a very few Georgians. PolitiFact National Georgia hit Democrat Stacey Evans with a paltry "Mostly True" rating:

Evans said Georgia "has the lowest minimum wage in the country."

Georgia’s minimum wage of $5.15 per hour is the lowest in the nation, but Wyoming also has the same minimum wage.

Also, most of Georgia’s workers paid hourly rates earn the federal minimum of $7.25.

Evans’ statement is accurate but needs clarification or additional information. We rate it Mostly True.

Sounds good. No problem. Right?

Eh. Not so fast.

Why is it okay in Georgia for "lowest" to reasonably reflect a two-way tie with Wyoming, but in Texas using "lowest" where there's a three-way tie earns the speaker a "False" rating?

How did PolitiFact Texas justify the "False" rating it gave the Republican governor (bold emphasis added)?

Abbott tweeted: "The Texas unemployment rate is now the lowest it’s been in 40 years & Texas led the nation last month in new job creation."

The latest unemployment data posted when Abbott spoke showed Texas with a 4 percent unemployment rate in September 2017 though that didn't set a 40-year record. Rather, it tied the previous 40-year low set in two months of 2000.

Abbott didn’t provide nor did we find data showing jobs created in each state in October 2017.

Federal data otherwise indicate that Texas experienced a slight decrease in jobs from August to September 2017 though the state also was home to more jobs than a year earlier.

We rate this claim False.

 A tie goes to the Democrat, apparently.

We do not understand why it is not universally recognized that PolitiFact leans left.



Correction/clarification Feb. 5, 2018: Removed unneeded "to" from the second paragraph. And added a needed "to" to the next-to-last sentence.

PolitiFact Texas transparency update

In a post we titled "PolitiFact Texas unpublished" we described how PolitiFact Texas published an article declaring Gov. Greg Abbott broke his promise to provide leadership training for principals of Texas schools. PolitiFact Texas published that article on Jan. 4, 2018. On Jan. 9, 2018, PolitiFact Texas announced it had taken down (unpublished) the article.

We’ve taken down this @GregAbbott_TX promise update. An agency just provided fresh information we need to review. https://t.co/UkvwzuwmRp

— PolitiFact Texas (@PolitiFactTexas) January 9, 2018

We checked and the article was gone from the PolitiFact Texas website. It was still available, and remains available, at Austin American-Statesman website, one of PolitiFact's partners for PolitiFact Texas.

And on Jan. 11, 2018, PolitiFact republished the old version of the story along with an updated version on the same page. PolitiFact Texas' actions make the temporarily unpublished version of the story look like a normal update, albeit the careful reader may notice that the second update followed just one week after the first one.

We think that's goofy.

Why do we think it's goofy? If the unpublished version of the update was just a normal update later updated with new information, then why unpublish it in the first place? It makes no sense.

In its current form, the story offers readers no hint at all that PolitiFact Texas unpublished the story for two days. Instead, PolitiFact Texas offers its readers this explanation:

Back when he was campaigning to be governor of Texas, Greg Abbott called for training school principals to be better leaders.

Legislative proposals to get such trainings off the ground floundered, however, leading us to rate this Abbott vow a Promise Broken.

But that was before the Texas Education Agency alerted us to other efforts focused on bolstering school leaders.

We decided to look afresh at progress on this promise.

Does PolitiFact Texas downplay the timing of its two updates or what? PolitiFact Texas does mention the date in an editor's note (not labeled as an editor's note) as part of an introduction to the earlier update:

The Abbott-O-Meter update below was posted Jan. 4, 2018. It's eclipsed by the update above:

If it's in italics maybe it automatically counts as an editor's note?

The finished product shows PolitiFact Texas rating a fulfilled promise as broken about a week before reversing itself to declare the promise fulfilled. But with no admission of any error and an incomplete description of what occurred.

PolitiFact thought it had erred, but was mistaken to think so?

We don't quite buy that.

PolitiFact Texas unpublished (Updated x3)

It seems like only yesterday we were praising PolitiFact Texas and W. Gardner Selby for taking an important step toward full transparency by making its interviews of experts available to readers.

Now it has come to our attention that PolitiFact Texas has followed PolitiFact National's lead in unpublishing stories when it decides they are defective.

A publisher may have legitimate reasons for unpublishing a story. But in the interest of transparency organizations should not totally remove the defective work from public view. Organizations should archive the story and keep it available before and after the organization puts the needed changes into effect.

Lately PolitiFact disappears the entire story and only posts a link to the archived version after republishing a reworked version.

If there's a good excuse for that doughnut hole in transparency we are not aware of it.

We also disapprove of PolitiFact only communicating its decision to unpublish the item on Twitter. That's transparency only for the Twitterverse. Readers deserve better than that.

As a candidate, Greg Abbott called for school principal leadership trainings. On the Abbott-O-Meter in his 4th year as governor, it's a PROMISE BROKEN.https://t.co/gqMtBTpEh9

— PolitiFact Texas (@PolitiFactTexas) January 4, 2018

Update Jan. 10, 2018

We found what is apparently the original version of the Abbott-O-Meter ruling and archived it at the Internet Archive.

Update Nov. 28, 2024

A spike in traffic to this post led us to review it, and it turns out it's overdue for an update.

On Jan. 11, 2018, after we originally posted our Jan. 10, 2018 update, PolitiFact Texas published a new version of the story with the old version appended afterward.

PolitiFact Texas' approach addressed our concern about disappearing the defective version of the story. But PolitiFact left us ample room to continue our criticism based on its failure to use a correction notice. This is what passes for PolitiFact's mea culpa:

The Abbott-O-Meter update below was posted Jan. 4, 2018. It's eclipsed by the update above:

Ordinarily a PolitiFact promise meter features a number of updates, each superseding the earlier updates. Find an "Obameter" example with two entries here. But for whatever reason many of the PolitiFact Texas' "Abbott-O-Meter" promises have no assessments whatsoever. Without investigating, we'd assume that may have something to do with the dissolution of PolitiFact's relationship with the Austin American-Statesman.

PolitiFact, then, used something akin to its normal approach for updating a promise meter story but without acknowledging that its story was mistaken. There's no admission of error and no apology, even though it's apparent that the facts justifying the "Promise Kept" rating were in effect when PolitiFact Texas published its "Promise Broken" update.

Typically the story updates progress along the lines of "In the Works" toward either "Promise Kept," "Promise Broken" or "Compromise." Going from "Promise Broken" to "Promise Kept" in the space of a week or two doesn't really make sense.

PolitiFact made a mistake and failed to follow its corrections policy.

And while all this was happening, the International Fact-Checking Network was publishing as "verified" the claim that PolitiFact "scrupulously" follows its policy on corrections. That was a lie then and it's a lie now.

IFCN assessors don't look closely enough to find mistakes, and the IFCN intentionally keeps its assessors from readily accessing the complaints it receives from the public with virtually zero transparency.

The IFCN supposedly publishes an "annual" transparency report. The first and last such report was from 2020.

We follow Poynter’s corrections policy for our articles and any corrections can be found at this link.

For 2018, 2019, 2020, 2021 and 2022 State of the Fact-Checkers Reports please visit the links attached to the respective years.

Starting from 2020, IFCN publishes annual transparency reports on its Code of Principles. You can download the 2020 report here.

We judge it false that the IFCN publishes an annual transparency report. 

Oh, and of course the link for the 2020 report returns a 404 error.

What an embarrassment.

IFCN transparency means you might be able to find the 2020 report at the Internet Archive Wayback Machine.

There's a little tidbit about this author in that 2020 transparency report:

Durin [sic] 2020, a very significant amount of complaints have been submitted one [sic] single source against one specific verified signatory, therefore, encouraging us to explore how to navigate such overwhelming attempts without allowing the system to be abused while making sure legitimate complaints are recorded.

Apparently the IFCN settled on the strategy of ignoring my complaints regardless of their legitimacy. Another embarrassment for the IFCN.

Update Nov. 28, 2024: In truth, I should have simply provided a link to the followup story we published on Jan. 11, 2020.

But it was worth tying it in with the International Fact-Checking Network's facade of accountability.

'(PolitiFact's) rulings are based on when a statement was made and on the information available at that time'

PolitiFact Texas issued a "False" rating to Gov. Greg Abbott on Nov. 16, 2017, finding it "False" that Texas had experience its lowest unemployment rate in 40 years.

PolitiFact Texas was also rating Abbott's claim that Texas led the nation last month (September?) in job creation. But we will focus on the first part of the claim, for that rating centers on PolitiFact's principle that it bases its rulings on the timing of a statement:

Timing – Our rulings are based on when a statement was made and on the information available at that time.

Our interest in this item was piqued when we found it linked at PolitiFact's "Corrections and updates" page. We went looking for the correction and found this:

UPDATE, Nov. 17, 2017: Two days after Abbott tweeted his claim about the Texas jobless rate, the federal government reported that the state had a 41-year record low 3.9 percent jobless rate in October 2017.

The release of government statistics confirmed the accuracy of Abbott's claim if he was talking about October.

PolitiFact Texas' update reminded us of a PolitiFact rating from March 18, 2011. Actor Anne Hathaway said the majority of Americans support gay marriage. PolitiFact rated her claim "Mostly True" based on polling released after Hathaway made her claim. Note how PolitiFact foreshadowed its unprincipled decision (bold emphasis added):

(P)ublic opinion on gay marriage is shifting quickly. How quickly? Let's just say we're glad we waited a day to publish our item.

I covered PolitiFact's failure to follow its principles back when the incident happened. But in this case PolitiFact was consistent with its principles.

Or was it?

What information was available at the time?

When Hathaway made her claim, no poll unequivocally supported her claim, and we had no reason to think the actor was in any position to have insider pre-publication information about new polling. But upon reading PolitiFact Texas' fact check of Abbott, we were left wondering whether Abbott might know the government numbers before they were released to the public.

PolitiFact Texas did not address that issue, noting simply that the unemployment rates for October were not yet released. We infer that PolitiFact Texas presumed the BLS statistics were not available to government leaders in Texas. As for us, we had no idea whether the BLS made statistics available to state governments but thought it was worth exploring.

Our search quickly led us to a Nov. 17, 2017 article at the Austin American-Statesman. That's the same Austin American-Statesman that has long partnered with PolitiFact to publish content for PolitiFact Texas.

The article, by Dan Zehr, answered our question:

It’s common and appropriate for state workforce commissions to share “pre-release” data with governors’ offices and other officials, said Cheryl Abbot, regional economist at the Bureau of Labor Statistics Southwest regional office. However, she said, the bureau considers the data confidential until their official release.

Zehr's article focused on a dilemma: Was Abbott talking about the October numbers (making him guilty of breaching confidentiality), or was he just wrong based on the number from September 2017? Zehr reported the governor's office denied that Abbott was privy to the October numbers before their official release.

We think Zehr did work that PolitiFact Texas should have either duplicated or referenced. PolitiFact Texas apparently failed to rule out the possibility that Abbott referred to the official October numbers based on the routine early sharing of such information with state government officials.

For the sake of argument, let's assume Abbott's office told Zehr the truth

PolitiFact Texas' fact check based its rating on the assumption Abbott referred to unemployment numbers for September 2017. That agrees with Zehr's reporting on what the governor's office said it was talking about.

If Abbott was talking about the September 2017 numbers, was his statement false, as PolitiFact Texas declared?

Let's review what Abbott said.

PolitiFact (bold emphasis added):

It’s commonplace for a governor to tout a state’s economy. Still, Greg Abbott of Texas made us wonder when he tweeted in mid-November 2017: "The Texas unemployment rate is now the lowest it’s been in 40 years & Texas led the nation last month in new job creation."

And let's review what PolitiFact found from the Bureau of Labor Statistics:

(W)e fetched Bureau of Labor Statistics figures showing that the state’s impressive 4 percent jobless rate for September 2017 tied the previous record low since 1976. According to the bureau, the state similarly had a 4 percent unemployment rate in November and December 2000, 17 years ago. The state jobless rate in fall 1977, 40 years ago, hovered at 5.2 percent.

According to PolitiFact's research, what is the lowest unemployment rate in Texas over the past 40 years? The answer is 4 percent. That percentage occurred three times over the 40 year span, including September 2017. But by PolitiFact Texas' reasoning (and Zehr's reasoning, too), it is false for Abbott to claim September 2017 as the lowest in the past 40 years.

We say PolitiFact Texas (and Zehr) were wrong to suggest Abbott was simply wrong about the unemployment rate in Texas.

Ambiguous isn't the same as wrong

Certainly Gov. Abbott might have expressed himself more clearly. Abbott had the option of saying "The Texas unemployment rate is lower now than it has been in 40 years" if he believed that was the case. Such phrasing would tell his audience that no matter what the unemployment rate over the past 40 years, the current rate is lower.

Alternatively, Abbott might have said "The Texas unemployment rate is as low now as it has been in 40 years." That phrasing would clue his audience that the present low unemployment rate was achieved during the past 40 years at least twice.

Abbott's phrasing was somewhere in between the two alternatives we created. What he said hinted that the September 2017 rate was lower than it has been in 40 years but did not say so outright. His words were compatible with the September 2017 rate equaling the lowest in the past 40 years, but fell short of telling the entire story.

Kind of like PolitiFact Texas fell short of telling the entire story.

Though we took note of it on Twitter, we will again take the opportunity to recognize PolitiFact Texas and W. Gardner Selby as PolitiFact's best exemplars of transparency with respect to expert interviews. PolitiFact Texas posted the relevant portions (so far as we can tell!) of its interview of Cheryl Abbot. PolitiFact Texas has done similarly in the past, and we have encouraged PolitiFact (and other fact checkers) to make it standard practice.

Selby's interview shows him asking Cheryl Abbot to confirm his reading of the unemployment statistics. Selby's question was mildly leading, keeping Abbott to the topic of whether the low September 2017 unemployment rate had been equaled twice in the past 40 years. A different approach might have clued Selby to the same valuable information Dan Zehr reported: Gov. Abbott may have had access to the confidential October figures and his statement may prove correct for that month once the BLS releases the numbers.

It's notable that in the interview Abbot said that the numbers from September 2017 were the "lowest" in 40 years (bold emphasis added):

(T)he seasonally adjusted unemployment rate for Texas in September 2017 matched those of November and December 2000, all being the lowest rates recorded in the State since 1976.

Selby did not use the above quotation from Abbot. Perhaps he did not want his audience confused by the fact Abbot used the same term Abbott used.

In our view, Gov. Abbott was at least partially correct if he was talking about September 2017 and correct if he was talking about October 2017.

PolitiFact Texas should have covered both options more thoroughly.

PolitiFact and the principle of inconsistency

In October, six days apart, PolitiFact did fact checks on two parallel claims, each asserting the existence of a particular law. One, by U.S. Senate candidate Roy Moore, was found "False." The other, by a Saturday Night Live cast member, was found "Mostly True."

Moore asserted that an act of Congress made it "against the law" to fail to stand for the playing of the national anthem. PolitiFact confirmed the existence of the law Moore referenced, but noted that it merely offered guidance on proper etiquette. It did not provide any punishment for improper etiquette.

SNL's Colin Jost said a Texas law made it illegal to own more than six dildos. PolitiFact confirmed a Texas law made owning more than six "obscene devices" illegal. PolitiFact found that a federal court had ruled that law unconstitutional in 2008.

Both laws exist. The one Moore cited carries no teeth because it describes proper etiquette, not a legal requirement backed by government police power. The one Jost cited lacks teeth because the Court voided it.

How did PolitiFact and PolitiFact Texas justify their respective rulings?

PolitiFact (bold emphasis added):

Moore said NFL players taking a knee during the national anthem is "against the law."

Moore's basis is that a law on the books describes patriotic etiquette during the national anthem. But his statement gives the false impression the law is binding, when in fact it’s merely guidance that carries no penalty. Additionally, legal experts told us the First Amendment protects the right to kneel during the national anthem.

We rate this False.

PolitiFact Texas (bold emphasis added):

Jost said: "There is a real law in Texas that says it’s illegal to own more than six dildos."

Such a cap on "obscene devices" has been state law since the 1970s though it’s worth clarifying that the law mostly hasn’t been enforced since federal appeals judges found it unconstitutional in 2008.

We rate the claim Mostly True.

From where we're sitting, the thing PolitiFact Texas found "worth clarifying" in its "Mostly True" rating of Jost closely resembles in principle one of the reasons PolitiFact gave for rating Moore's statement "False" (neither law is binding, but for different reasons). As for the other rationale backing the "False" rating, from where we're sitting Jost equaled Moore in giving the impression that the Texas law is binding today. But PolitiFact Texas did not penalize Jost for offering a misleading impression.

We call these rulings inconsistent.

Inconsistency is a bad look for fact checkers.


Update Oct. 23, 2017: We appreciate Tim Graham highlighting this post at Newsbusters.

PolitiFact Texas uses tongs (2016)

Our "tweezers or tongs" tag applies to cases where PolitiFact had a choice of a narrow focus on one part of a claim or a wider focus on a claim with more than one part.

The tweezers or tongs option allows a fact-check to exercise bias by using the true part of a statement to boost the rating. Or ignoring the true part of the statement to drop the rating.

In this case, from 2016, a Democrat got the benefit of PolitiFact Texas' tongs treatment:

So, it was true that Texas law requires every high school to have a voter registrar.

But it was false that the law requires the registrar to get the children to vote once they're eligible.

PolitiFact averages it out:

Saldaña said a Texas law requires every high school to have a voter registrar "and part of their responsibility is to make sure that when children become 18 and become eligible to vote, that they vote."

A 1983 law requires every high school to have a deputy voter registrar tasked with giving eligible students voter registration applications. Each registrar also must make sure submitted applications are appropriately handled.

However, the law doesn’t require registrars to make every eligible student register; it's up to each student to act or not. Also, as Saldaña acknowledged, registrars aren’t required to ensure that students vote.

We rate this statement Half True.

There are dozens of examples where PolitiFact ignored what was true in favor of emphasizing the false. It's just one more way the PolitiFact system allows bias to creep in.

Here's one for which PolitiFact Pennsylvania breaks out the tweezers:

Sen. Toomey (R-Penn.) correctly says the ACA created a new category of eligibility. That part of his claim does not figure in the "Half True" rating.

We doubt that PolitiFact has ever created an ethical, principled and objective means for deciding when to ignore parts of compound claims.

Certainly we see no evidence of such means in PolitiFact's work.

PolitiFact says Democrat's statement is misleading and so rates it "True"

It's really a very small wonder that PolitiFact remains so popular with the many Democrats who comment on PolitiFact's Facebook page. PolitiFact is good to Democrats. Often it's hard to see why without seeing the benevolence as a sign of PolitiFact's liberal bias.

Take the case of PolitiFact Texas and Secretary of Housing and Urban Development Julián Castro.

Castro, appearing at the Texas Democratic Party's state convention, implied California's economy was outperforming that of Texas. PolitiFact sourced its quotation of Castro to the Dallas Morning News:

“Today, California is kicking our butt, creating more jobs and more economic growth than Texas,” he said. “Maybe what we need to do is trade in [California] Gov. Jerry Brown for Gov. Greg Abbott and get better results.”

PolitiFact ruled Castro's claim "True," defined as "The statement is accurate and there’s nothing significant missing."

With PolitiFact's help, Democrats like Castro seem to have a knack for saying true things that have nothing significant missing even when something significant is missing.

We don't have to do any digging of our own to find the misleading part of Castro's claim. Tara Sinclair, one of the experts PolitiFact Texas interviewed, points it out:

Tara Sinclair, chief economist for Indeed, a job-posting service, pointed out by email that Texas has long enjoyed a lower unemployment rate--a facet Castro didn’t mention.

(...)

 All in all, Sinclair said by email, "focusing on the total number of people employed is misleading due to the different population sizes of the two states. By both the unemployment rate (a standard measure of labor market health) as well as the employment to population ratio, Texas's labor market actually looks healthier than California's."

This bit of information Castro left out was so unimportant PolitiFact metnioned it again in its conclusion (bold emphasis added):

Castro said that "today," California is "creating more jobs and more economic growth than Texas."

These fightin’ words hold up based on recent jobs growth and relative changes in GDP and personal income. Still (just a tad whiney here) would it hurt to acknowledge that Texas continues to enjoy a lower unemployment rate?

We rate this claim True.

So Castro's statement was misleading, according to the cited expert, falsely suggesting that California's labor market is healthier than Texas' labor market.

Nothing significant was left out?

We've charged that PolitiFact's "Truth-O-Meter" grading system is hopelessly subjective, and this case helps illustrate the point. What is the objective cutoff point between leaving out something significant and leaving out something insignificant? And if PolitiFact finds something insignificant was left out, does it makes sense to point out something insignificant to its readers?

PolitiFact has never publicized any criteria that would show it bases its ratings on objective benchmarks. PolitiFact's "star chamber" of at least three editors decides what is significant and what isn't. By and large, PolitiFact's readers will know nothing about what was discussed by the "star chamber." Nor will PolitiFact's readers know how the editors voted. And here's a fact: Not one single member of PolitiFact's Supreme Court was picked by a Republican president.

That's one way to institutionalize bias ...

PolitiFact recycles garbage: "False" that Social Security is a Ponzi scheme

Are the fact checkers at PolitiFact inept? Intentionally deceitful? Both?

Jeff and I chat about that issue from time to time. We try to give people the benefit of the doubt, but PolitiFact makes this one a tough call.

The latest challenge to our attempt to see the best in the people at PolitiFact? They're misleading their readers with their recycled garbage about Social Security's financing structure. On Facebook, PolitiFact reminded readers they should remember and believe PolitiFact's flawed fact checks from the past:

What are the "several reasons" PolitiFact uses to deny the similarity?

PolitiFact uses Mitchell Zuckoff, a journalist who wrote about Charles' Ponzi's original ripoff, as its go-to expert. Let's examine the features supposedly distinguishing Social Security from a Ponzi scheme.

"First, in the case of Social Security, no one is being misled," Zuckoff wrote in a January 2009 article in Fortune. "Social Security is exactly what it claims to be: A mandatory transfer payment system under which current workers are taxed on their incomes to pay benefits, with no promises of huge returns."

People are being misled into believing that Social Security's financing is solid, so we challenge Zuckoff's claim that no one is being misled. But, more to the point, Ponzi himself would have had no need to mislead his victims if he shared the government's power to force participation. As Zuckoff notes, Social Security is a mandatory transfer payment system. This can't count as a critical distinguishing difference, for Ponzi would have leaped at the chance to force participation in his scheme.

Second, he wrote, "A Ponzi scheme is unsustainable because the number of potential investors is eventually exhausted." While Social Security faces a huge burden due to retiring Baby Boomers, it can be and has been tweaked, and "the government could change benefit formulas or take other steps, like increasing taxes, to keep the system from failing.

Here, Zuckoff is flatly wrong. A Ponzi scheme can have the same number of potential investors as Social Security. The trick is getting potential investors to turn into actual investors. Zuckoff's second difference maker is the same as the first, on examination: Ponzi had to lure new investors with false claims. He would have preferred the convenience of Social Security's mandatory participation.

Third, Zuckoff wrote, "Social Security is morally the polar opposite of a Ponzi scheme. ... At the height of the Great Depression, our society (see 'Social') resolved to create a safety net (see 'Security') in the form of a social insurance policy that would pay modest benefits to retirees, the disabled and the survivors of deceased workers. By design, that means a certain amount of wealth transfer, with richer workers subsidizing poorer ones. That might rankle, but it's not fraud."

The third difference, Zuckoff says, is that Social Security is good while Ponzi schemes are bad. We see two foundations for Zuckoff's claim. The first is ideological. Zuckoff takes it as axiomatic that the morality behind Social Security is superior to the morality behind Ponzi schemes. We think it's hard to base an objective finding of fact on the presumption of moral superiority. The second foundation of Zuckoff's argument comes again from his first point: Social Security, unlike a Ponzi scheme, is not fraud. As we pointed out above, Charles Ponzi would have loved to make mandatory participation a feature of his scheme.

That's it. Those three (a bit short of two after winnowing) reasons supposedly make it "False" that Social Security is a Ponzi scheme.

PolitiFact includes comments from CATO Institute's Michael Tanner. Tanner affirms a similarity between Social Security and a Ponzi scheme, while noting some differences. PolitiFact makes those comments a footnote, so the similarities are de-emphasized in the story and ignored in the final ruling.

Ultimately, the thing that keeps Social Security from being a Ponzi scheme in PolitiFact's eyes is a feature that Ponzi would have loved to include: the power to keep new money coming in through mandatory participation. If Ponzi had that power and were alive today, he could still be making money off of new investors.

PolitiFact shows its bias by ignoring the similarities Tanner points out and by making the power to force participation the line of demarcation between Social Security and Ponzi schemes.

There's also the issue of ignored evidence. Professional peer-reviewed journals routinely refer to Social Security's "pay-as-you-go" financing as a Ponzi game or Ponzi scheme. We offer one example among many:

In an unguarded moment 30 years ago, Nobel Laureate Paul Samuelson captured the reasoning undergirding this approach to public finance:

The beauty about social insurance is that it is actuarially un-sound. Everyone who reaches retirement age is given benefit privileges that far exceed anything he has paid in.... Social Security is squarely based on what has been called the eighth wonder of the world--compound interest. A growing nation is the greatest Ponzi game ever contrived. And that is a fact, not a paradox.

With below-replacement fertility and increasing longevity, however, the arithmetic of pay-as-you-go retirement programs changes unforgivingly. As the ratio of employees to retirees falls, a universal pay-as-you-go retirement system has only three options for preventing bankruptcy: reduce pension benefits; raise taxes; restrict eligibility. There are no alternatives.

Should you trust the fact checker that overlooks and denies by omission this part of the story? How does a competent fact checker fail to find Social Security's pay-as-you-go financing described abundantly in professional literature as a Ponzi game?

We don't know the answer to that question. Maybe PolitiFact knows.


Afters:

The similarities CATO's Michael Tanner pointed out between Social Security and a Ponzi scheme amounted to a "False" rating. But PolitiFact found it "Half True" that President Barack Obama's signature health care reform, the so-called Affordable Care Act, was the Republican health care proposal from 1993.

The Republican bill must have been much more similar to Obamacare than Social Security is to a Ponzi scheme, right? Judge for yourself.

Our take? PolitiFact is magnificently inconsistent. And the inconsistency tends to favor the political left, as in this case.

Something to see in Texas after all?

We just finished updating one of our "Nothing To See Here" posts after PolitiFact Texas revisited a speech by Senator John Cornyn's Democratic challenger, David Alameel.

PolitiFact Texas picked on a fairly innocuous statement from Alameel's speech in late June.  We found other statements in the speech we thought were more politically significant.  In our update we review the timeline of the reporting.  We think it's reasonable to suspect that our post helped prompt this new fact check of Alameel by PolitiFact Texas.

This example featuring Alameel shows again how story selection may easily skew the "report cards" PolitiFact publishes to help serve as voter guides.

Pete Sepp: "I don't know who the experts you consulted are or whatever policy agendas they may have"

Pete Sepp, vice president for communications and policy for the National Taxpayers Union, usually interacts with PolitiFact as an expert source.  This month, however, the NTU ran an ad that received the PolitiFact treatment, and Sepp ended up as NTU's spokesperson in defending it.  The ad called the federal government's proposed rebate program for drug purchases a "tax."

Sepp did not publish a public rebuttal to PolitiFact.  Rather, we find his arguments hosted by PolitiFact's Texas affiliate.   PolitiFact combined the bodies of three email messages from Sepp on a single reference page.

Sepp's initial email (bold emphasis added):

Based on our experience, calling this rebate plan anything less than a tax fails to capture all of its effects:

1) With a few exceptions that the Secretary of HHS would be able to approve (an uncertain proposition), drug manufacturers would be required to rebate 23 percent of the average manufacturer price (more if the drug price rose quicker than inflation) for a brand-name pharmaceutical that was distributed to lower-income Part D beneficiaries. Otherwise, the company could not participate in providing drugs to Medicaid, Medicare, or other government beneficiaries. Considering there are already genuine rebates (i.e., negotiated discounts) under several such programs, this latest demand from the government for being able to sell to a huge segment of the entire consumer drug market in the U.S. seems more like a mandatory extraction than a voluntary refund.

2) The money collected from these "rebates" don't wind up in the actual consumers' pockets or the various Part D plans; instead they go to a fund that will defray certain government Medicare program costs. A "rebate" as is commonly understood is something that the consumer of product receives after purchase. This "rebate" is nothing of the kind, and represents deceptive terminology.

3) The "rebate" is based on a percentage of price per unit, a lot like the way some excise taxes on products such as some tobacco items work.

4) This "rebate" will in essence squeeze the price bubble somewhere else. Either other Part D beneficiaries get stuck with higher premiums, people in private, non-Medicare plans pay higher prices for their drugs, or drug development and access gets scaled back, or even voluntary discounts start to dry up.

For a good summary of how this could happen, as well as some previous CBO work on this topic. I'd suggest the following link at American Action Forum, which former CBO Director Douglas Holtz-Eakin serves at:

http://americanactionforum.org/topic/cost-shifting-debt-reduction-american-seniors

Sepp from his first followup:

I didn't see a feature yet on your site so I thought I'd send you a couple other good links to commentaries that discuss the rebate scheme: 

http://www.nydailynews.com/opinion/obama-plan-force-rebates-medicare-drug-benefit-drive-costs-thousands-seniors-article-1.976435#ixzz1dhbBGZwe 

http://www.galen.org/component,8/action,show_content/id,13/blog_id,1608/category_id,7/type,33/ 

Yes, there are several groups like ours (AEI, Galen Institute, American Action Forum) who share concern that this proposal amounts to a tax.

And from Sepp's second followup, registering his apparent incredulity at PolitiFact's ruling:

1) "There's nothing in the proposal that calls this a tax and experts we visited say rebates like the one in Medicaid never have been called taxes." I don't know who the experts you consulted are or whatever policy agendas they may have, but here are people in the health policy field who agree with the ad's contention that the rebate proposal is best described as a tax.

Sepp gave four examples then moved to his second point:

2) In another email you had asked, "There's nothing in the proposal that calls this a tax." My answer: well, of course not! Supporters call this a rebate so they can raise revenues for the federal government without branding their scheme a tax and having to answer a lot of inconvenient questions about it. Just because they don't want to call it a tax doesn't mean it won't function like one (see above). That's exactly the point of our ad, and our mission for the past 42 years -- exposing attempts by the political class to cover up a proposal that walks, talks, and hurts like a tax by calling it something else.

Contrast Sepp's argument with PolitiFact's conclusion:

We see how the Obama proposal could be judged a nearly mandatory give-back in that drug companies that decline to give rebates would do so at risk to their bottom lines. It also makes sense that drug companies wouldn’t swallow the costs of the rebates; they’re not free.

Then again, contrary to the ad's statement, there’s no evidence low-income Medicare beneficiaries would pay a 23 percent "tax." And all told, Obama's urged rebate remains that--money paid in return for a purchase or action/opportunity. One would have to connect more dots to make it a tax. We rate the group’s statement False.

What dots require connecting, other than having the term "tax" appear in the text of the bill to describe the rebate?  Good luck finding it in the story.  I couldn't.  It's hard to know when one has met a secret standard, and other than the absurd standard of requiring the bill to describe the rebate as a "tax" it's hard to see what would serve.

One additional brickbat for PolitiFact:  Where is the full context of the ad?  If there's some reason for not giving readers a copy of the ad to look at then the readers deserve to know what it is.