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OH: PolitiFact or Fiction No. 1: Does anyone at Cleveland Plain Dealer understand finance?

By   /   June 13, 2012  /   No Comments

Part 1 of 17 in the series PolitiFact or Fiction

By Jon Cassidy | Ohio Watchdog

PolitiFact Ohio is a franchise of the Tampa Bay Times in St. Petersburg, Fla.

PolitiFact Ohio practices opinion journalism under the guise of fact-checking. They often get things wrong — particularly, we’ve noticed, in their coverage of U.S. senate candidates Sherrod Brown (Democrat) and Josh Mandel (Republican). So we bring you PolitiFact or Fiction, a semi-regular review of pronouncements issued by PolitiFact Ohio, a blog run by staff at the Cleveland Plain Dealer and supported by Politifact.com, a franchise of the Tampa Bay Times in St. Petersburg, Fla.

It takes a rare gift to find the same claim “half-true” and “mostly true.” But that’s how PolitiFact Ohio rates Republican senate candidate Josh Mandel’s claim that he achieved the highest possible ratings for the STAR Fund he oversees as state treasurer.

Last October, Mandel sent out an e-mail saying the fund had “just received the highest possible credit rating one of these funds can receive.” That earned him a “half-true” from PolitiFact. Last month, he released an ad saying that he “earned the highest possible credit ratings as state treasurer.” That him PolitiFact’s “mostly true” rating.

The close reader will notice the only difference in the two is the adverb “just,” meaning “in the recent past.”

Ohio’s investment fund has a AAAm rating from Standard & Poor’s – the highest possible – which it has maintained for 16 years, through two recessions.

There is not a shadow of untruth to the claim that a AAAm credit rating is the highest possible, yet PolitiFact casts an aspersion because “Mandel’s statement is accurate but needs additional information to provide clarification.” It doesn’t, and PolitiFact doesn’t have any to offer, because it couldn’t, because Mandel’s claim is simply true.

The only additional information PolitiFact provides is about itself: the fact-checkers gave the claim a lesser rating last fall when Mandel used “just,” because they didn’t think it was an apt description of a rating that’s stood for 16 years. There, at least, is a reason, though not one that justifies calling the statement a half-lie.

This would have been the place for PolitiFact to take a shot at the state’s finances, to point out that it doesn’t much matter where local governments and school districts park a spare $4.5 billion when they’re looking at nine-figure pension debt, but there’s no evidence in the Plain Dealer that anyone there understands finance.

(Seriously, guys, go look at what’s happened to the assets in the state’s pension funds since 2007, and then compare it to what didn’t happen to the STAR Fund. Get it yet? The professor you talked to tried to explain it.)

If there’s any of the contextual misrepresentation that PolitiFact loves to allege, it’s in the notion that the state’s finances are in any way healthy. It’s not in a quibble about “just,” which Mandel used in a reasonable way.

Here’s what the PolitiFact didn’t tell you, perhaps because they didn’t understand why it mattered:

On Aug. 5, 2011, Standard & Poor’s downgraded U.S. sovereign debt for the first time ever. Even the dullest observer couldn’t miss what that said about institutional stability.

The immediate practical effect was to trigger similar downgrades in scores of funds holding a lot of U.S. Treasury debt, including 14 local government funds.

Mandel checked in with S&P, who informed him Aug. 23 that the STAR Fund had maintained its exceptional rating.

It made the news Sept. 8, and Mandel mentioned it in an email to his supporters Oct. 5, using the word “just.” Keeping in mind that markets are dynamic, and that his fund had officially withstood the latest tremors, he had an empirical basis for considering the achievement to be current.

The fact-checkers may come to a different opinion, but that’s all it is.

Part of 17 in the series PolitiFact or Fiction

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Will Swaim