To: New York Times, Editor, Louis Lucero, Assistant to the Senior Editor for Standards, and Margaret Sullivan, Public Editor, New York Times
.@nytimes: Don't Make Up Statistics on Venezuela
Just Foreign Policy
The New York Times must stop using made-up, non-standard economic statistics in its reporting on Venezuela. It must use the same standards in its economic reporting on Venezuela that it uses in economic reporting on other countries and that other major U.S. newspapers use in their economic reporting.
Why is this important?
On March 1 the New York Times ran a graphic accompanying its article on Venezuela that showed an “implied inflation rate” of more than 300 percent. This is a statistic that was manufactured by the Cato Institute. It is not a meaningful measure of inflation, and there are few economists who would accept it as such. (1)
New York Times editors have refused to correct this error, despite being presented with explanations of why it is wrong.
Inflation in Venezuela is currently running at 56 percent, which is high but is not hyperinflation. The Times, following Cato, is using a formula to calculate what inflation would be if people had to pay for all of their goods and services in dollars purchased on the black market. But as every Venezuelan consumer knows, this is not the case. For virtually all of the purchases that make up the basket of goods measured by the Consumer Price Index, Venezuelans use domestic currency. The Cato measure is measuring the change in the black market dollar exchange rate, which is not the same thing as inflation, even if the two variables may be related. The uselessness of this measure can be seen on the graph itself, where the “implied inflation rate” turns negative in 2008-09, at a time when actual inflation was running at 25-31 percent.
The Times’ error violates standard economic reporting because it is standard to use official statistics, which come from government or international agencies such as the International Monetary Fund (which has not challenged or criticized Venezuela’s consumer price index). The only exceptions are when the official statistics are not considered by economists to be true, and there are reliable private estimates. An interested party should not be able to simply make up a new statistic for inflation, unemployment, poverty, etc. and expect that a reputable media outlet will report it along with the official statistic that is used by economists and international agencies.
Urge the New York Times to correct the record by signing our petition.
References:
1. "NYT Violates Standards of Basic Economics and Journalistic Procedures in Reporting on Venezuela Inflation," Mark Weisbrot, Center for Economic and Policy Research, March 6, 2014, http://www.cepr.net/index.php/blogs/the-americas-blog/nyt-violates-standards-of-basic-economics-and-journalistic-procedures-in-reporting-on-venezuela-inflation