…I smell the blood of a propagandist!
Recognize this guy? He’s David Frum, former Bush speechwriter and current talking head on many a cable outlet’s political TV show. He also runs his own group blog called the Frum Forum. If you’re unfamiliar with him, I’ve posted a lengthier bio with more context, so the rest of this post will make more sense. Frum is also the guy I got into a Twitter-fight of sorts with last Saturday, over remarks he made on Bill Maher’s Real Time the previous evening.
Here’s how it happened: on Friday night, Frum was one of the panel guests on Bill Maher’s HBO show Real Time. Maher began discussing the astonishing dip (and then recovery) in the stock market the previous week. When Maher first brought that subject up, he brought on a special guest: Alan Brinkley, a very well-respected historian and author of a recent book on media titan Henry Luce. Maher pointed to a recent article Brinkley had written about the Depression-era Pecora commission, and noted that its lead investigator, Ferdinand Pecora was a follower of Justice Brandeis, who’s quoted as saying “bigness in corporations is the enemy of Democracy.” The Pecora Commission, you’ll recall, was the Depression-era commission empowered to sift through the wreckage of the 1929 crash and associated mess which led to the depression. The recommendations of the Pecora Commission resulted in the enactment of the Glass-Steagall law and other pieces of signature legislation which erected a wall of separation between commercial and investment banks, and kept this country free from the ravages of unchecked fiscal chicanery for nearly fifty years. In replying to Maher, Brinkley said, among other things, that we’d “never really dealt with bigness” of corporations in America, and that was a large part of the reason some of the problems of the depression were coming back around a second time with the 2008 (and still current) financial mess.
It was at this point that Frum injected himself into the conversation:
I’m not going to have this number at my fingertips, but I strongly suspect – so, George Will, forgive me if I’m wrong – but I strongly suspect that if you were to look at the number of people employed by the thousand biggest corporations in America today, and compare it to the number employed by them in 1973, you’d see that the companies today are a lot less big. We’ve had a trend away from bigness, uh, in in…
at which point he was interrupted by Maher and the conversation moved on from there.
No big deal, right? I mean, it’s an article of faith that the largest engine of job creation in America is small businesses. I haven’t done my own independent research to verify this, but it’s a widely-enough cited statistic that I’m content to stipulate it. What made Frum’s statement stick out in my mind, though, is that small business job growth/creation wasn’t what Frum was talking about in his remarks. Instead, he was explicitly attempting to refute Brandeis and the Pecora commission and thereby the entire notion of strong financial regulation, by saying that, in fact, corporations have been getting smaller, if anything, since 1973. It was just one part of the conversation, so it was easy to sort of let it slide by in the ongoing patter which moved onto other, tangentially related topics. But it stuck in my head for two reasons: first, it cut against the grain of Frum’s “good-guy conservative” image, in my mind, and second, on what planet have corporations been getting smaller over the past forty years? We used to have neighborhood hardware stores, now we have Home Depot and Lowe’s. We used to have variety stores, now we have Wal-Mart. We used to have more than a handful of enormous, too-big-to-fail banks and financial institutions, now we have Gold In Sacks, BofA, and a very small number of leveraged, mergered mega-behemoths.
What bothered me most about Frum’s statement is that he is far too smart and well-educated to make a mistake like choosing the number of employees at large corporations over time as the proper metric to determine whether American corporations on the whole have been turning in recent years towards or away from “bigness.” And that almost certainly means Frum chose that metric intentionally, precisely because it distracts from the glaringly obvious fact of corporate consolidation and the trend towards “bigness,” measured by things like market share, gross revenue/profits, and the number of truly significant players in various industries which has happened with increasing speed and steepness in recent years.
Why would David Frum want to intentionally choose a metric that makes him look a little lame (if one stops to think about it), but which, if one doesn’t really stop to think, deflects attention away from the trend toward corporate consolidation and size? Answer: because Frum is, just like many other conservatives, above all interested in not changing much of the fundamentals of what is wrong with the way our financial system operates, and carrying on with the insane notion we’ve pursued to absurd heights that corporations are legally people and have most or all of the rights thereof. At bottom, he’s no different from most establishment conservatives (including most of the Bush administration) in that he wants existing power structures (and wealth) preserved, to the exclusion of most else.
What gives Frum away as just another advocate of preserving the status quo at any cost is a remark he made just moments before the one above. Remember, Maher had turned the conversation toward last week’s meltdown in the stock market. Bringing Alan Brinkley on to discuss it was a clear signal that some “where is the regulation, why are we letting these corporations run rampant” talk was coming up. Sensing this, Frum preemptively blurted out the following (in regard to the topic of banks and the economy):
I’m worried that we’re going to do something bad in the name of trying to make a repair.
Frum has a reputation as one of “the good conservatives,” in that he doesn’t actually froth at the mouth or call for things (in “jest”) like the poisoning of the Speaker of the House. Frum’s reputation as a “reasonable conservative” is significant to this post, though, mainly because I believe it’s not nearly as accurate as is commonly believed.
That’s a remarkably illuminating sentence: in other words, this statement of Frum’s implies, we need to be careful not to regulate the markets in the name of fixing the glaring and huge screw ups and deficiencies we just witnessed, because…well, because markets are just swell. I want things to just sort of settle down, Frum seems to be saying, and people to forget how badly they were screwed and how much of their (and their kids’) tax money they just gave to these institutions, instead of sounding the alarm for stuff like bringing back some of the depression-era regulations which kept our financial system free of any serious crashes or disasters for nigh on fifty years, and produced the most prosperous and well-educated middle class the world has ever seen. In the end, that’s why Frum’s statements like the one about corporate “bigness” are so consciously disingenuous: because he doesn’t really care if they’re true, except to the extent that they allow him to practice obfuscation of the topic at hand while allowing him to maintain the appearance of being the “reasonable conservative.”
I have never bought the notion that David Frum is a “reasonable conservative.” Remember, this is the guy who coined the phrase “Axis of Evil” for that famous Dubya SOTU speech. Anyone who is willing to propagandize thusly is not an honest broker, in my opinion. I’m not saying Frum is a secret dittohead, nor do I think Frum is deliberately lying about his views on things like his disagreement with the direction the GOP chose to take in the health care fight. But just because Frum has been engaged recently in a few very visible tiffs and breakups with the chowderhead wing of the conservative movement, doesn’t automatically make him moderate, nor reasonable. Frum, in my opinion, is just as focused on continuing some of the worst aspects of the ruinous conservative policies – especially the economic policies – of the past eight years (or even thirty years) as is any other garden-variety conservative apologist for the recent meltdowns which are a direct result of those ruinous conservative policies.
Anyway, back to the Twitter-fight. Frum’s comments were on Friday night. Saturday, myself and at least one other person saw Frum posting items on Twitter (including, I think, a link to his previous night’s appearance on Real Time). We asked Frum how he could possibly use number of employees as any serious measure of corporate “bigness?” I posted several links to data showing that 70% of American commerce now is through large corporations, along with a few other facts. Frum’s replies were interesting. For anyone who cares to read the original back-and-forth tweets between Frum and me, I’ll re-print them here with links to the original tweets. Essentially, Frum insisted that if we didn’t like his use of the employment-size statistic, it was incumbent upon us to prove him wrong; to come up with at least one better, measurable statistic which would disprove his thesis and show that corporations had been getting bigger, not smaller. Until then, he suggested, his point stood (even though he provided no actual facts to support his own claim initially on Maher).
1. “Look I cant spend the morning teaching statistics, but here’s the basic idea …”
2. “You cant go rummaging through the Internet for random numbers created by God knows who.”
3. “To do a comparison, you choose a relevant measure.”
4. “Then you choose year pairs: say 1970 and 2010.”
5. “Then you compare your result in year 1 to year 2.”
6. “EG Share US corporate profits earned by 25 /100/1000 biggest companies – or revenues – or what have you.”
7. “Instead you are offering stray factods without baselines of comparison.”
8. “THe way you rebut me is by showing that the top 25 or whatever companies earned a larger portion of profits than 30 years ago”
9. “That was the original challenge.”
10. “So – go do it.”
11. “If the number comes in where you assumed, you crow.”
12. “If not, you graciously admit error.
Well. How thrilling, to get a personal mini-lesson, not just in etiquette, but in the fundamentals of statistics, too – all from a cable news pundit and former propagandist!
Although my etiquette may be a bit rusty, as I tweeted to Frum, I did take statistics in college. But before we get into all that, let’s not forget that Frum’s own comment was made off-the-cuff on a late night cable show, and prefaced by the remark that he was “not going to have the number at [his] fingertips,” and to “forgive [him] if [he's] wrong.” That pretty much tells you what you need to know about David Frum’s overall fealty to statistical rigor. In short, Frum feels about the importance of statistically supporting one’s arguments just like Leona Helmsley feels about taxes: they’re for “the little people,” not for him, hence his “challenge” to me to prove him wrong.
Now, that sort of “prove me wrong” bluff may have worked for Frum in the past…and to be honest, it very nearly worked on me. It is one of the oldest moves in the conservative playbook to make an outlandish claim which flies in the face of even simple common sense, and then attempt to force anyone who disagrees to do all the homework required to disprove the claim. Often, such a “challenge” is issued in the form of forcing detractors to prove a negative (as opposed to the conservative who is making the outlandish claim proving the veracity of his claim). Very difficult to do, proving a negative. It’s also deeply annoying to have someone claim something which is so clearly counter to observable reality and then “challenge” you to do busy work to prove it isn’t true. For example, the major “factoid” which I linked to in my Twitter conversation with Frum, for instance, was that 70% of all American commerce is now with major corporations. I didn’t check the validity of that claim, but unless it’s false, it pretty well disproves Frum’s offhand thesis about “bigness.” Yet, essentially because he’s DAVID FRUM, Important Guy, he gets to go on national cable TV and make a completely unsubstantiated claim in order to sell the “reasonability” of a larger point which is false to begin with. But heaven forbid you or I want to argue with him. Then, “stray factoids” simply won’t do; Frum will insist that we do a regression analysis, with supporting links to all data.
So I did.
I did not try to refute Frum’s claim that the “thousand biggest American corporations employ fewer people today than they did in 1973,” because that is an irrelevant and inaccurate method of assessing corporate “bigness.” When two large corporations merge, for example, they frequently lay off thousands of workers due to operational redundancy, but would anyone seriously argue that the resulting entity is somehow not bigger than either of the previous two corporations which formed the merger?
Instead of that distraction, I went to Fortune’s list of top corporations. You can find the entire list online from previous years. I chose last year (2009), ten years ago (1999, as simply an arbitrary measure; one which included his time as a member of a GOP administration), and 1973, which was the year Frum pulled, seemingly out of thin air, for his imaginary comparison on Real Time. I took only the top 100 companies (because I have limited time), and added up their gross revenues. Then I obtained the US GDP for each of those three years from the Wolfram Alpha computational engine. Last, I simply calculated what percentage of GDP the largest 100 companies’ revenue was for each year. The results were pretty shocking, even for me:
The link to the full Excel spreadsheet with all the data (and links) is here. But that shocked even me: in 1973, the top 100 corporations’ combined revenue was equal to just over 25 percent of US GDP. In 1999, it was 34 percent. That’s a growth of only 34 percent over a quarter-century. Worrying? Sure. A definite indicator of increase in corporate “bigness?” You bet. Yet, in just the last ten years – the time during which Frum was in the White House, dreaming up bon mots like “axis of evil” for Dubya to say, that figure went up by an even greater amount – 36% – in just over 1/3 the time! That means that not only has corporate “bigness” increased instead of decreased, it means the process is actually accelerating.
It’s been a whole week since my interaction with David Frum. I hope, based upon his condescending tweets regarding “graciously admitting error” (if proven wrong), that he will be along shortly to offer his apologies – or at least to admit his error. What do you think: should I hold my breath?