Friday, November 9, 2012

I'm no accountant, but maybe Bob Murphy and Brad DeLong will be interested in this

Bob Murphy accuses Brad DeLong of making up some of his facts in this post.

I doubt Brad DeLong is privy to the records of American Crossroads, but he claims some familiarity with consulting fee structures. I have no familiarity. But I do have google. Searching for "political consulting profits" came up with this as the first hit. It says:

"A survey of federal spending reports by The Huffington Post, the most comprehensive of its kind this year, shows that the top 150 consulting companies -- media, fundraising, digital/social, direct mail and others -- have grossed $465.76 million so far in the 2011-12 electoral season, out of a total of $1.24 billion spent."

I'm no accountant and I don't know how these things are usually reported. Is that $1.24 billion spent by campaigns or spent by the consultants themselves? Is the relevant number (the one Brad is referring to) gross margins or net income (I'm assuming the $465 million includes operating costs)? I'm no accountant - I don't know these things. You guys fill me in. But it seems to me Brad is making a statement that could very well be gleaned from familiarity with the industry, based on these numbers. It might even be a conservative figure.


  1. Cf. Rick Perlstein in "The Baffler".

    What I find amazing about Murphy is his unwillingness to do even the most cursory due diligence about, well, about virtually anything...

    Brad DeLong

    1. Aha - I'll look it up.

      On a broader note I hate it when my buddies fight :-/

      Seriously, Bob is actually quite good. He does have this need to play gotcha with Krugman especially, and also you. And my view is he usually falls flat on his face when he tries to do that - practically every time.

      But his posts that don't jump on Krugman are actually very thoughtful (even when I think they're wrong, which I often do, of course), and he burns his own when they deserve it too which is always refreshing in the blogosphere.

    2. The other amazing thing about your American Crossroads critique is that it's not just you making the critique!.

      Breitbart, Bloomberg New, etc. are making the same points. This isn't crazy Berkley prof shooting from the hip!

    3. What I find amazing about Murphy is his unwillingness to do even the most cursory due diligence about, well, about virtually anything...

      What I find amazing is the progressive nonchalance about DeLong making up a number, putting it in the title of his post, as if he read it in the New York Times or something.

      This is what Stephen Colbert calls "truthiness" when Bill O'Reilly does it.

      I don't have to do due diligence to report, "Brad DeLong says Karl Rove and his friends skimmed $80 million from their donors, when technically he doesn't know what the real number is."

    4. But you have to see how merely suggesting that the origin of the number is exactly what Brad told us the origin of the number was makes it tough for you to scold Brad, don't you?

      This is essentially how this spat plays out:

      Brad: Based on what I know about how consulting operates, Rove took maybe $80 million

      Bob: Brad said he used what he knew about the consulting industry to guess $80 million

      Brad's readers: Right. He said that. You quoted him.

      None of this seems to amount to Brad "pulling a number out of the clear blue sky".

    5. Daniel wrote:

      Brad: Based on what I know about how consulting operates, Rove took maybe $80 million

      Daniel, if DeLong has said "maybe $80 million" in his post title, and then later on when he said how much Rove skimmed off the top, do you think I would have written my post?

      No, I wouldn't have.

      Maybe I'm weird. When I read a post title saying, "Karl Rove got $80 million and his donors got...?" I just assume that number is an actual reported figure.

    6. I get that... but he said what he did in the post right? Doesn't that seem really different from having a title and then not clarifying your thought process for getting to $80 million.

      I agree if the point is that just having a "a multimillion dollar fee" would have been better. But I can't bring myself to think it's all that misleading when Brad himself clarifies where it comes from.

  2. Daniel,

    In the spirit of post election optimism, I have taken a vow to attempt to only be positive when I comment on your blog, so here goes.

    I very much appreciate your writing about Bob Murphy stabbing at Brad.

    I believe that you have well made your point that Murphy has made a big mistake in throwing his lot in with Karl Rove.

    No one takes Brad's estimate of $80,000,000 seriously, but lots of millions, Yes.

    Rove looked like every other con man on Fox News when he was covering up, refusing to admit that his additive to save mileage or prevent aging didn't work.

    Rove badly over sold and over promised.

    Brad's overall point that the base of the Republican party is being manipulated for profit is right on.

    Murphy saying something in support of Rove was a bad, unforced error. It was a rather transparent admission that Murphy is no different than Rove. He is saying what he says for profit and ambition, not because he actually believes what he writes or says.

    Again, thanks for the heads up

    1. I think you're write on everything here, except that by being too trigger happy with Brad, Murphy is "thorwing his lot in with Karl Rove."

      That's about as silly as saying that Brad DeLong throws his lot in with Karl Rove!

      But yes - agree on all the rest.

    2. "No one takes Brad's estimate of $80,000,000 seriously"

      So you just made Bob's point, Daniel agrees with you, and then Brad comes on here and says, "That Murphy guy doesn't research anything". WOW, just wow.

    3. I think you're BADLY missing what we're saying Jason B.

      $80 million is - we all understand because we read English - an estimate based on background info on margins for political consultants. None of us think the $80 million figure itself is documented anywhere.

      That's very different from Bob's point.

    4. I haven't read anything incorrectly here.

      Here's what you just typed: "None of us think the $80 million figure itself is documented anywhere."

      Out of Bob's own keyboard: "My point is, DeLong’s headline makes it sound like it is a documented fact somewhere that Rove and his buddies got $80 million."

      So you and A. Hamilton agree with Bob, that Brad pulled this number out of the air, and as Bob said, it may be somewhat educated, but it isn't documented. Then, Brad comes on here and says, "This Murphy guy doesn't research anything".

    5. You and I clearly have different understandings of what "pulled it out of the air" implied. If you are saying that I think Brad's claim that is based on knowledge of the consulting industry accurately characterizes the origin of the figure, I agree.

      That still seems very different from Bob's claim, but perhaps that's all Bob is saying too. He can clarify.

    6. Alexander Hamilton wrote:

      I believe that you have well made your point that Murphy has made a big mistake in throwing his lot in with Karl Rove.

      No one takes Brad's estimate of $80,000,000 seriously, but lots of millions, Yes.

      AH your second sentence invalidates your first. I hate Karl Rove. All I was pointing out is that DeLong made up the number. I guess you guys are cool with people making up numbers, as long as in so doing, we get the bad guy.

      Truthiness FTW.

      Really this thread is beautiful. And you guys have the gall to think you have a monopoly on conscience (Krugman's blog), fairness (DeLong's though at least his is done in satire), and facts (Daniel's here).

    7. I don't claim to have a monopoly on facts.

      It's monopolistic competition at best.

      I pointed out how nuts it was for AH to say you threw in with Rove, btw. AH is pretty paranoid when it comes to vast right wing conspiracy type stuff. I think he thinks I'm a libertarian, if that tells you anything. We agree on some elements here, but I agree that was crazy and called him out on it.

    8. The title is actually meant to be self-deprecating - that I'm stubborn (although also that I consider myself in the reality-based-community). It was just a nice way to work in Adams in a self-deprecating way.

      Evan (who originally blogged more) and I were the "other stubborn things".

    9. This isn't about you or me, it's about Brad's incredible irony.

      You and I, on that thread, were actually asking pretty much the same question, and in which case you linked to the consulting figures, so you answered that. Thank you. I didn't think the 20% margin figure was that big of a deal, you found out it wasn't, but Brad accuses Rove of stealing the money when he said, "skimming off the top", because that's what skimming is.

      Brad's arrogance is impressive. He accuses Rove of stealing, when it seems, based upon political consulting margins Rove actually was quite conservative in his fees, and then he accuses Bob of never researching anything, although Brad pins a figure on Rove that is completely undocumented.

    10. Jason -
      Ummm... I think the "stealing" implication is a reference to what everybody talking about Rove is talking about: that he didn't deliver the goods. I don't think anyone is under the misapprehension that he literally stole anything or that literal skimming was going on.

      Is rhetoric dead? Come on.

    11. You're right, Daniel, Brad didn't accuse him of stealing. I did misunderstand the manner he used "skim". My apologies.

    12. Daniel

      Lets be clear about my POV.

      I am a trial lawyer well trained in economics (macro and location) and banking. I pay attention mostly to Noah, Munger, and Soros. Beyond that I am a tax and spend, not deficit and spend, Democrat and an ardent Federalist.

      I don't think there is some right wing conspiracy. I can prove, however, that most all the Libertarian/Right Wing crap is just crap pitched by hustlers looking to making a Ben Franklin or, like Murphy, to call attention to themselves. Munger calls it incentive caused bias. Who is the leader of the pack? Rush. He even sells tea.

      As a trial lawyer I call such impeaching the witness due to financial bias. Munger, one of the greatest investors and minds of all times, never reads broker reports, etc. I believe you ought to follow the same rule. You are never going to learn anything from any libertarian, from Hayek, or from a John Cochrane or Taylor or a Robert Lucas. Stick to Keynes (and Kahneman) He is enough until we know a lot more about psychology.

      If you think not, look, for example, at the millions of words wasted on the Great Depression. They are meaningless. By 1931 rational people could look at the World---China/Japan, Germany, and Russia---and realize where events were heading. Your greatest weakness is that you are a poor historian, so you have no mental model to understand how people educated by WWI saw the path forward. As I like to say, Macro models don't account for Hitler. Bless people for trying but no set of policies would have given the US full employment at any time after 1 January 1932.

      I read your blog and comment because you seem to have good intentions but needs lots of direction.

  3. Daniel

    I am going to break a news story on your web site.

    Everyone thinks that the Karl Rove incident on Fox was real. It wasn't

    Ms. Kelly states at 1:19 in the video if you follow this link, "Now, when we practiced this before." She made this statement as she was walking to the decision desk to confront the desk with Karl Rove's bs

    watch the part 2 video

  4. OK in the interest of fairness, balance, and truth--I blog, you decide--let me say Daniel that I was over-the-top in the "clear blue sky." If you are only upset because of that phrase, fair enough. I did that to be provocative. DeLong didn't make the number up out of the clear blue sky, he made the number up based on some knowledge of industry practices.

    1. Murphy admits that, "I did that to be provocative."

      Bull S . . . You did it for profit, to try to hustle some Ben Franklins

      Here is your Nov for fee speaking schedule, mostly likely on Koch Bros. dollars (Cato) (directly or indirectly)

      Speaking Engagements

      October 29, Murphy-Wenzel afternoon and evening seminars in downtown Boston. Details here.

      November 4-5, Freedom Retreat, Salem, OR. Details here.

      November 13, Freedom Seminar, Portland, OR. Details here.

      Karl Rove is a pundit for pay. You are a pundit for pay.

    2. AH not sure if it matters but that's like 2 years out of date. Where's your due diligence?

    3. comes from your website

      apparently you are the one who is out of date

  5. Jason B, DeLong didn't pull the number out of the air, he pulled it out of his knowledge of political consulting. Which is exactly what he said he did.

  6. What? Krugman's blog is "The conscience of a liberal", not "The liberal conscience". How does this imply a monopole on "conscience". It just says that he has one. I have no idea who that liberal he mentions could be, though :)

    Next to come: Tyler Cowen calls for a revolution, David Glasner says he is uneasy with that, and Scott Sumner has hallucinations, or something.

  7. The title of Brad's post was misleading. End of story. Stop defending it. Brad should just be a gentleman and apologize for being a misleader.

  8. I must say, I see nothing here to justify your claim that "Bob [Murphy] is actually quite good"--and a lot to justify the judgment that he is in fact extremely bad. Perhaps you could highlight something he writes that is not value-subtracting--that is at least neutral?


    Brad DeLong


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