Financial Journalism and The Girl with the Dragoon Tattoo
By Carl Bloice - BlackCommentator.com Editorial Board
February 17, 2011
In a good novel, writes blogger Randy Mayeux, "we can
find quotes that speak to the issues of the age." He's
referring to the much acclaimed "The Girl with the
Dragoon Tattoo" and its relevance to the state of
financial journalism in real life today. "Read it, and
think about the financial reporting (and, really, most
`journalism') in this country over the last two-three
years," he says.
Some critics have taken the author Stieg Larsson to
task for spending time on the state of economic
reporting, suggesting that dragging in the issues of
the day distracts unnecessarily from the enjoyment of a
good murder mystery. For me it was one of the book's
highlights. The story's central character, Carl Mikael
Blomkvist, himself a financial journalist, says some
pretty nasty things about his Swedish colleagues,
especially about their tendency to go along to get
along, to accept the official line or conventional
wisdom about events.
I was thinking about this the other day when I read on
the front page of the New York Times
"Yet their preference for spending cuts, even in
programs that benefit them, dissolves when they
[the public] are presented with specific options
related to Medicare and Social Security, the
programs that directly touch millions of lives and
are the biggest drivers of the long-term deficit.'
The problem with that sentence is that the last dozen
or so words in it are simply not true. Social Security
is not one of the major contributors to the Federal
budget deficit; it's not a contributing factor at all.
Now it's possible that the reporter, Sheryl Gay
Stolberg, doesn't know any better, that she just read
it somewhere and assumed it to be true. The problem is
that the question has been explored so many times over
the past year and the mythical contention between
Social Security and the deficit exposed by so many
experts in the field that one has to wonder why such
misleading statements get past the Times' editors.
"Just to be very clear, absolutely nothing needs to be
done," economist Dean Baker of the Center for Economic
and Policy Research has written. "If we look at the
projections from either the Congressional Budget Office
or the Social Security trustees - they've yet to come
out with their new ones, but in any case, the one from
last year - the program could pay all scheduled
benefits well into the future, at least twenty-seven
years into the future. And even after that, it could
still pay the vast majority of benefits, assuming
nothing is ever done. Now, somewhere down the road,
we'll probably make changes in the program as we've
done in the past. But the idea that somehow something
has to be done anywhere soon, this is crazy. People
have paid for those benefits. So, in effect, what we'd
be doing is defaulting on the bonds that are held in
the trust fund to pay people their benefits that - when
they come due. So, nothing has to be done."
"Now, what's going on is that you have this real craze
about the deficit, because the reason we have the
deficit, of course, was we had a collapse of the
housing bubble," continues Baker. " But there's this
obsession about the deficit - `we have to do something'
- and you have people running around
`Well, you know, we can't do anything on healthcare,
because we tried that and the insurance industry was
too powerful, the pharmaceutical industry was too
powerful, so therefore we have to cut Social Security.'
It's close to a non sequitur and should have people
absolutely fuming at their representatives in Congress.
But that's where we are in
Evidently, Times columnist, Davis Brooks, doesn't see
it that way. Last week he was yapping away at how
"Spending on Medicare, Medicaid, Social Security and
interest on the debt" is driving up the deficit. He
even proposed a new united front of "foreign aid
people, the scientific research people, the education
people, the antipoverty people and many others" to
insist on action to" slow the growth of Medicare" and
"reform" Social Security. Keep in mind that if the
objective is to save money, any reform of Social
Security means less of it. Brook has assigned to his
new group the pompous title of "The Freedom
Why any "antipoverty people" would join in an effort to
cutback Medicare and Social Security is hard to fathom
unless they just wanted more people to represent.
"That's right folks, you get to say whatever you want
in the media now to further the cause of cutting Social
Security," economist Baker has said. He made the remark
a year after hearing Cokie Roberts telling viewers
that, "You could close this capital or turn it into
condos and you could close down every domestic program
that we have and you would still have a deficit because
of Social Security and Medicare and interest on the
"Well that's not quite right. Social Security is
running an annual surplus," wrote Baker. "The money
that program takes in each year in taxes and interest
on its bonds exceeds what is being paid out in
benefits. It's not clear what Ms. Roberts had in mind
when blaming Social Security for the deficit, but it
has nothing to do with reality."
David Brooks is quite aware that the vast overwhelming
majority of people in this country are opposed to cuts
in Medicare and Social Security. Elderly Tea Party
people aren't buying that one. That's why he trying to
trick advocates for the poor and defenders of education
into his absurd coalition. "Specifically, they have to
get behind an effort now being hatched by a group of
Coburn, Dick Durbin, Mike Crapo and Kent Conrad. These
public heroes have been leading an effort to write up
the Simpson-Bowles deficit commission report as
legislation to serve as the beginning for a serious
effort to get our house in order."
"Hatched" is the right word here.
Imagine trying to tell students who are up in arms
about the draconian cuts being made to public education
these days that to their precarious futures should be
added reduced Medicare benefits and cutback benefits or
a privatized Social Security system turned over to Wall Street.
Actually, there is no Simpson-Bowles deficit commission
report and Brooks knows that. The commission was a
failure. It never produced a plan for dealing with the
deficit or anything else. When it became apparent that
the 14 out of 17 votes necessary were not there, the
co-chairs, Republican, former Sen. Alan Simpson and a
Erskine Bowles released their own proposals in their own names.
Reality? Who said anything about reality?
This Monday on MSNBC's Andrea Mitchell Report, host
Nora O'Donnell ripped into President Obama, accusing
him of ignoring the recommendations of "his own fiscal
commission" in his budget proposal. What "is he really
doing about our deficit?" she sputtered. After saying,
"we've got to get this clear," she put up the above
quoted David Brooks erroneous allegation about Social
Security and the deficit.
Take this from the prestigious UK-based magazine The Economist
"A year ago Mr. Obama set up a deficit-reduction
commission, which duly produced a sensible report
at the end of last year. He has failed previously,
and failed again this week, to endorse the
commission's conclusions. He offered no specific
proposals for cutting the cost of the biggest
drains on the federal purse
Security (pensions) and defense."
Again, Social Security pays for itself.
Again, the commission reached no conclusion. It didn't
even take a formal vote.
That last bit about defense is interesting. A lot of
people in our country favor reducing the bloated and
mostly irrelevant military budget. But you won't get
any support for that from the leading deficit hawks,
nor from any of Brooks' Congressional "heroes."
While Social Security and Medicare are usually linked
in these discussions, the problems are not the same.
The latter actually is linked to federal expenditures.
But the problem is not Medicare itself; it the
inexorable rise in medical costs. Don't hold your
breath waiting for anything to be done about that.
Affect the huge profits of the pharmaceutical and
medical devise industries, or the corporate hospital
chains? Give me a break.
Because of demographic changes, sometime in the future
Social Security is going to need more money to meet the
needs of retiring seniors. There is something that can
be done about it. When President Obama was candidate,
Obama he said
the retirement age. I believe there are a number of
ways we can make Social Security solvent that do not
involve placing these added burdens on our seniors."
And, "Currently, the Social Security payroll tax
applies to only the first $102,000 a worker makes. If
we kept the payroll tax exactly the same but applied it
to all earnings and not just the first $97,500, we
could virtually eliminate the entire Social Security shortfall."
Why can't that be put on the table? Because it doesn't
fit the larger object Les Leopold wrote about recently
on the Huffington Post
"Wall Street has a plan and a new logic that is
quietly infiltrating the media and policy circles.
It's called `structural reform.' Although it is
likely to involve some additional pain and
suffering, it's being sold as the new magic bullet
for our ailing economy."
Leopold continued, "Structural reform is Wall Street
speak for reducing what is often called the `social
wage' for working people in every way possible
increasing the retirement age and cutting Social
Security benefits, government employment and benefits,
funds for public education, defined benefit pensions,
and health care expenditures....and of course, extended
unemployment benefits as well."
Sometimes this business can get downright cynical and
heartless. What is being promoted is not just to change
Social Security and Medicare. It is to diminish them.
It is - by any means necessary -- to devote fewer
resources to the sick and elderly.
Last July, columnist Michel Gerson wrote in the
elderly counts many achievements and benefits. But we
are reaching a point where these important priorities
threaten to overwhelm everything else."
That's utter nonsense. But Larson's protagonist missed
one important point. Writers write but editors edit and
publishers publish. They all ought to be accountable.
"Media coverage reflects what sells, and the political
arena is no exception," Tarsi Dunlop, who is the
Director of Operations at the Roosevelt Institute
Campus Network wrote February 10 on the new deal 2.0
site. "Conflict and hypocrisy reign supreme, while the
realities of policy are often left to fend for
themselves. Social Security is a poignant example of
such casualties. It is often the victim of
misinformation and political agendas, which are
designed to obscure the fact that a majority of
Americans support the program. Most recently, Social
Security was hijacked by the conversation about the
national debt, yet another attempt by conservatives to
reframe the narrative and detract from the facts.
Consequently, the program's fundamentals were once
again lost to media spin, which sees no profitable
advantage in telling a non-partisan story. The media's
reluctance to move beyond Republican sound bites is a
fundamental disservice to Americans across the country.
How else are they supposed to get the full story?"
BlackCommentator.com Editorial Board member Carl Bloice
is a writer in
Coordinating Committee of the Committees of
Correspondence for Democracy and Socialism and formerly
worked for a healthcare union.