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Financial Journalism and The Girl with the Dragon Tattoo

Carl Bloice: 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.

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.

girl with the dragon tattoo

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 Washington saying, ‘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 Washington.”

Evidently, Times columnist, David 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 Alliance.”

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 national debt.”

“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 courageous senators: Saxby Chambliss, Mark Warner, Tom 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.

schools for wisdom

David Brooks

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 Democrat, former Clinton Administration Chief of Staff Erskine Bowles released their own proposals in their own names.

Reality? Who said anything about reality?

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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: health care, Social 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: “I do not want to cut benefits or raise 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 Washington Post: “Devoting resources to the sick and 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?”

Carl Bloice

Carl Bloice

Republished with permission from The BlackCommentator