More Journalistic Malpractice from WAPOPosted: November 17, 2011
Predictably, WAPO propaganda specialist Lori Montgomery and her cronies have produced more junk journalism based on bias instead of any actual knowledge of economics or interviews with folks that would actually know about economics. This time she teamed up with Rosalind Helderman to push her same disinformation about Social Security within the framework of the super committee. Then there’s the added confidence fairy story. It’s about time we consider WAPO to be a source of malinformation and place it on newsstands in the same category as Globe Magazine. Well, maybe not quite the same category. At least the Globe only spins lies about celebrities and alien invasions. Can WAPO just turn their coverage of the federal budget over to Pete Peterson and at least be honest about its obvious dependence on biased think tanks instead of real economics? Why do we have to suffer through bad writers like Lori Montgomery when we can just cut out the middle man? Why hide the real source of this nonsense?
Even as supercommittee members struggled to chart a path to a compromise that would not alienate their respective political bases, a bipartisan group of lawmakers from the House and the Senate planned to renew a call Wednesday for the panel to pursue a more ambitious deal that would require major surgery to Medicare, Medicaid and Social Security, as well as historic tax increases.
Yup. Just what we need. More ambitious cuts that send us straight to a depression. As usual, WAPO writers just can’t help wrongly inserting Social Security into any talk of the federal deficit. How many times do actual economists need to point out that Social Security is a stand alone program with its own source of financing?
Robert Kuttner of the American Prospect shreds WAPO and its biased coverage. WAPO also continues to spew the confidence fairy nonsense. Some how, every one will feel all snug and warm and the economy will recover if we take money away from the vast majority of American households to protect the comfortable few. Wow, just imagine the need for the safety net programs if we downgraded the 1% from filthy stinking rich to stinking rich. Whatever would happen to sales at Tiffany and Mercedes Benz dealerships? Oh, the humanity! Oh, the economic devastation! Hully Gee! WAPO just keeps making up these story lines!
Wednesday’s Washington Post deserves some kind of perverse award for advocacy journalism—in this case, for advocating the proposition that dire economic consequences will ensue if the congressional Super Committee fails to cut a deal for drastic deficit reduction. This is, of course, one side of an argument.
Those on the other side, including myself, have argued that austerity in a deep recession makes no economic sense and that as a matter of politics, the Obama administration would be far better advised to let the automatic sequester formula take effect, knowing that it would have to be reopened because of Republicans’ horror of deep defense cuts and the expiration of the Bush tax cuts.
Moreover, Social Security does not belong in this conversation, and Democrats are better off, substantively and politically, defending it against Republican proposed cuts rather than lumping it in with budget talks.
But I digress. The Post has been an editorial champion of the Super Committee and austerity politics, and of the bogus claim that Social Security is partly responsible for the current deficit, which has seeped into the news coverage of the predictably biased Lori Montgomery.
In yesterday’s Post, the lead piece on deficit politics, by Montgomery and Rosalind Henderman, includes the subtitle, “Pressure mounts from all sides as deadline nears.” Reading the piece, we learn that “talks have focused on a tax package of as much as $650 billion over the next decade”—a Republican claim that the Post took at face value in order to drum up support for the deal. The Republican arithmetic has been thoroughly demolished by Bob Greenstein, whose analysis was just a keystroke away from Montgomery’s wishful keyboard.
Greenstein and Horney’s analysis at CEPR demonstrates that the Toomey plan is not a balanced approach to deficit reduction. As I said yesterday, it is a bait and switch or some kind of Wimpynomics. Toomey will gladly “reform” taxes Tuesday for devastating budget cuts in social programs today. Nearly all the Republican plans begin with saving the Bush Tax Cuts which have done all kinds of damage to the budget and have had little impact on the economy. Republican suggestions include some weird bargain that would cut spending immediately and postpone overhauling the tax code. I still argue that the Bush Tax Cuts must go or we will be permanently locked into a death spiral.
Senator Pat Toomey and other Republicans on the Joint Select Committee on Deficit Reduction (“Supercommittee”) portray their new offer to raise close to $300 billion in revenues (under a plan to reduce deficits by about $1.5 trillion over ten years) as a significant concession, and some observers have suggested it represents a welcome first step toward a balanced deficit reduction plan to put the budget on a sustainable path. But a closer examination of the proposal raises grave concerns and indicates that, in fact, it adds little balance.
It uses savings from closing tax loopholes and narrowing other tax expenditures mainly to set tax rates permanently at levels well below those of President Bush’s tax cuts, and to make permanent both the highly preferential treatment of capital gains and dividend income under the Bush tax cuts and the temporary hollowing out of the estate tax for estates of the wealthiest one-quarter of 1 percent of Americans that Congress enacted in late 2010. Consequently, the proposal seems designed to make only a modest revenue contribution toward deficit reduction and then to take revenues off the table for the larger rounds of deficit reduction that must follow. Moreover, even while yielding modest savings, the revenue component would make the package less balanced by conferring large new tax cuts on the wealthiest Americans while forcing low- and middle-income Americans to bear most of the plan’s budget cuts as well as its tax increases.
By permanently locking in tax rates well below the Bush levels, the plan would remove the potential to secure $800 billion in deficit reduction by letting the Bush tax cuts for households with incomes over $250,000 expire on schedule at the end of 2012, and it would remove the leverage that the scheduled expiration of these tax cuts provides to those who seek balanced deficit reduction with a substantial revenue contribution. It also would remove the potential to secure a substantial deficit reduction contribution from tax reform.
The most absurd storyline in WAPO pointed out by Kuttner is that some how the failure of the super committee will act like the Grinch that Stole Christmas. Neil Irwin and Ylan Q. Mui write some absurd piece that suggests that people will be more apt to spend for the holidays–due to the perpetually present confidence fairy–after they completely gut Social Security, Medicare and Medicaid. Wow. That makes absolutely no sense. How would causing income to go down and expenses to go up for seniors cause them to go on a shopping spree? How would it give businesses more confidence knowing congress drained them of a source of revenue–in the case of the medical professions–and decreased the income to their customers? WAPO must have some crazy back-asswards macroeconomic models at play!
I can’t wait for Dean Baker and some other economists to take this on again. At the moment, Baker is taking on how the austerity meme is killing the Euro which–if it happens–will undoubtedly send us right back into a global depression and keep us there for some time. Here’s two short paragraphs that point to the root of all our current economic problems. It’s still a lack of demand brought on by the vast wealth and income destruction caused by banks that overleveraged and engaged in pure speculative activities. Their bad investment portfolios wounded many western economies. This austerity kick will most likely mortally wound us all.
The absurdity of this situation is that the eurozone countries would not need outside support from the BRICs if the ECB was prepared to pursue these policies today. Just as is the case now with the United States, there is no shortage of wealth in the EU, in the sense that it has the ability to produce vastly more goods and services than it is currently producing. The main problem is simply a lack of demand.
We have known how to generate demand since Keynes wrote his masterpiece in the ’30s. However, rather than pursue the simple steps needed to restore the eurozone’s economy to stable growth, the ECB is adhering to an ideological agenda that will destroy the euro and throw the economy into an even more severe recession than the last one. This is an extraordinary tragedy unravelling in slow motion in front of the world.
How much more can our civilization endure of policy via junk science and right wing ideology? How can we actually solve any problems when we have huge national papers basically pushing ignorance agendas? We are so f’d.