The Media’s Role in Driving the "Fiscal Cliff" Imagery
by Linda Beale
The Media’s Role in Driving the “Fiscal Cliff” Imagery
The mainstream media has been fed a steady diet of releases from interested parties (like right-leaning propaganda tanks) about the need to adopt austerity measures, often cast as needing to save the country from out-of-control spending and unprecedented deficits and debt.
At the same time, the mainstream media has generally given up investigative journalism to engage in sports-like “he said-she said” journalism: it treats most fiscal issues as a contest between left-leaning and right-leaning groups to be described by each side’s post position–i.e., as a merit-based race between equally valid positions. Without the investigative wherewithal for in-depth research, there’s much less information about whether and how the facts may support one side and not the other.
We see it on climate change, where a scientific consensus is treated as just another opinion contrasted with the wishful opinions of anti-environmental corporatists. We see it on evolution, where belief-based creationism is taught in schools alongside fact-supported scientific theory, with the two sides reported in the news as though they represent equally valid educational positions.
It shouldn’t be surprising, therefore, that this approach surfaces in spades when it comes to the so-called “fiscal cliff”.
One is hard pressed to find articles that give credence to the position of progressives on Social Security (it is not bankrupt), Medicare (we can solve the long-term problem of financing of reasonable universal health care without cutting benefits by learning from the facts and experiences about controlling medical care costs through single-payer systems like those adopted in every other advanced nation), or even taxes. The possibility of using the end-of-year changes as a fresh-start, “sweep the house clean” foundation for immediate action early in the new term is often ignored and, if mentioned, is generally given short shrift and inadequate explanation.
It’s easy, though, to find forecasts of return to recession outcomes if the sequester and end of the Bush tax cuts are allowed to take place as currently enacted.
Take, for example, the rhetoric of Mark Johnson in a KTVB.com report, A Fiscal Cliff primer (Nov. 18, 2012, updated Nov. 19).
If Congress cannot come up with an agreement on the Simpson-Bowles ratification, and then cannot come up [with] enough compromises to pass a plan of their own, and the President refuses to extend the current January 1st deadline, it’s over the cliff for Uncle Sam.
And, straight into the tax increases, unemployment jump, deep federal cuts and probable recession; A rough landing for the country and a scenario neither side wants.
The article adds to the crisis drumroll by quoting political scientist David Adler.
“And all the progress that Idaho families made in getting out of the recession will have gone by the wayside if in fact America’s politicians in Washington are not able to put our fiscal house in order.” Id.
In a similar vein, Jonathan Weisman in the New York Times reports today that “negotiators” have agreed on the parameters for a deal in which they will agree on fixed amounts of revenue to be raised (without tax rates increasing) and fixed amounts of cuts to social programs (and other federal programs like farm subsidies). Jonathan Weisman, Seeking Ways to Raise Taxes but Leave Tax Rate as is: Negotiators Float Ideas to Appease Both Parties, New York Times (Nov. 23, 2012), at A12.
The article contains a good bit of information (or speculation, it isn’t completely clear) about what “negotiators” are considering in order to “pacify” the Republicans without permitting tax rate increases. There’s no specific source attribution other than to “”aides involved in the negotiations” and a “Republican aide involved in the current talks.” Id. Predictably, it also includes a description of the slated legislative changes as a “crisis” when the “‘fiscal cliff’ would squeeze hundreds of billions of dollars out of the fragile economy next year and, many economists say, send the country back into recession”. Id.
There’s not a single hint that it may not really be a “cliff”. That it merely cuts back INCREASES in military spending. That the sequester, with its cuts to the military, leaves the government with more options for funding NEEDED stimulus spending. That Congress has all the power it needs to undo any truly harmful components of the sequester. That Congress can instead consider targeted cuts to lower-income taxpayers to prevent a renewal downward recession trend. That Congress can instead target spending cuts (and spending) on stimulation of the economy. That Congress, in other words, has it in its power to help lower-income taxpayers pay for needed consumption and thus to create tax cuts and controlled spending cuts to benefit the lower and lower-middle income classes whose consumption is most needed to drive economic growth.
A little better is Evan Soltas, A Gentler Slope for the ‘Fiscal Cliff’, Bloomberg.com (Nov. 19, 2012), in which he admits the siren-call of the term to journalists.
The vivid imagery and false urgency of the [fiscal cliff] term transformed budget arcana into a national Wile E. Coyote moment. The words lent themselves to media overexposure and political opportunism. Despite efforts by Chris Hayes, Ezra Klein and Suzy Khimm to rebrand it the “fiscal curb” or “austerity crisis” — either of which would be more consistent with reality — Bernanke’s original phrasing has held fast. Id.
Soltas at least explores the benefit of avoiding drastic austerity measures and even considering an “alternate” path of increasing the tax take beyond the “historic” measures of 18-19% of GDP. Remember, we are currently at all-time lows in the perecentage of GDP taken in federal taxes, due especially to the enormously preferential rates to the super-elite through taxation of capital gains, dividends and private equity compensation (that is, “carried interest”) at less than half the top rate on ordinary compensation.
A reasonable solution might be a combination of spending cuts and revenue increases which stabilizes both at 18 or 19 percent of gross domestic product. That would be in line with their 50-year historical average. Increases or decreases beyond this level demand larger arguments about the proper size and role of government.
Alternatively, one could contend that demographic shifts — namely, the growing elderly fraction of the population — or rising health care costs justify greater public resources without any moral claims about government’s proper size. There is merit to this argument, but it neglects the revenue side of the historical consensus on the taxes paid to the federal government.
The relevance of any “historical consensus” on the percent of GDP that should be paid to the federal government, however, is questionable. The times are extraordinarily different, with the years of low tax intake from the Reagan tax cuts through the Bush tax cuts, coupled with the unprecedented problem of the Bush preemptive wars being fought without the historical use of wartime increases in tax cuts (especially on the rich) to pay for them.
Maybe one of the better articles is a pre-election discussion at Fidelity.com on the “Fiscal Cliffhanger“, Sept. 26, 2012. Here at least there is a good graphic demonstrating just how significant the Bush-era tax cuts are in our deficit problem ($221 billion) and how little the cut to support for Medicare payments to providers is ($11 billion). Perhaps this kind of graphic can get the upper-middle class Americans to consider their fair-share obligation. (That means couples, like most professionals such as myself, who make more than $100,000 a year but less than the $250,000 or more a year that Obama has taken as his targeted income level for reintroducting pre-Bush era taxes.) Further, the article acknowledges that gridlock in the lame duck is quite possible, but goes on to note that there will likely be a resolution–with compromise on both sides–early in 2013.
Many progressives–in which group I include myself– do think that a clean sweep start to the new session could allow Congress to act more reasonably on our long-term fiscal needs without compromising measures needed to continue moving us out of the Bush recession.
Once the Bush tax cuts are gone and the sequester starting to take effect, Congress could enact piecemeal legislation. It could pass new, better targeted tax cuts for the lower-middle and lower income distribution. Hopefully Obama, now in office and not needing to protect his electoral future, will recognize the reasonableness of allowing some tax increases to take place in four-or five- years for those couples in the $100,000 to $250,000 taxable income set.
Once the sequester is starting to roll in, Congress could move to reinstate public pension support. It could consider long-term support for Medicare through gradual adoption of a single-payer, Medicare-for-all system that meets the real needs of the future rather than using an artificially created fiscal crisis to destroy the New Deal programs. It could accept the sequester’s limited spending increases for the military. It could even finally act to reduce the tax-and-spending subsidies for Big Banks (get rid of the active financing exception to Subpart F), Big Pharmacy and Big IT (legislate new international tax rules that undo the tax evasion that current “affiliated sales” of intellectual property permits while reining in the ability of MNEs to locate their profits in offshore tax havens with sophisticated tax planning like the “Dutch sandwich” techniques), and Big Oil and Big Agribusiness (outright subsidies built into well-lobbied tax and spending provisions).
since I agree with so much of what you say here, I wish you hadn’t begun by making needless enemies.
I also wish you wouldn’t spoil it by creating the cognitive dissonance that “tax increases for the rich is good, but tax increases for me is bad for the economy.”
then I would have felt free to point out that if people are going to be living longer, and not wanting to work longer (they won’t), it makes perfect sense for them to “spend” a little more on their retirement savings. This is exactly what a small raise in the payroll tax would do. counting that as an unacceptable increase in the share of GDP going to “government” is nonsense. actually, it’s stupidity, but am not allowed to talk like that.
the payroll tax is not a “tax”, it is workers setting aside a small percent of their earnings today so they will have enough to eat during their retirement. calling it a tax, and worse, expecting “the rich” (but not you oh poor middle class person), is to hopelessly confuse yourself, and make it impossible to arrive at any solution that makes sense to anyone.
should have been “expecting the rich… to pay for it.”
As long as we are using tax policy to make up for the income inequality do to lost labor power in the market place, then yeah, tax the rich and don’t tax the rest.
It just perfectly fits with how income as gone in this country.
Then again, I fully understand FDR’s phrase “economic royalty”.
two things wrong with that:
“as long as…” well, we need to stop.
“tax the rich” well, yes, but how?
you aren’t going to do it by saying you are going to do it. the rich have something to say about it. in fact they have everything to say about it. it’s why we are here.
Yeah Coberly, that’s what was said before we ended up with 31 tax brackets and a top rate of 75%.
Hey, people are rediscovering the strike…at Walmart no less. Alan Grayson was put back in the house!
We are recreating the creative distruction that we created the last time we were here.
Well, you could go to any of the articles that Linda points to, or you just might go to today’s Wall Street Journal:
This OpEd piece looks at the real debt that America is faced with. When all of the unrecorded liabilities are included (the bulk are in SS,FERS & Military retirement) the # comes to $87T. That’s about 5xs, what is now on the books.
Cut that number up anyway you like, but you can’t argue that the number is zero. This business of entitlements is more problematic than you make it.
Separately, consider entering copy on a web page using html. Convert to html on the doc you are using; then enter it to the web page AFTER disabling “rich text”. Then return to rich text and all will be well.
That way the pagination works (spaces between paras), and images/tables are properly configured.
you should stop scaring yourself with imaginary debts.
the SS “debt” at least is phony. if you are referring to the debt the US owes TO SS, well, you should be glad to know that is going away as we speak… it is being paid off.
that big thing called the national debt seems to be the result of your friends the banks playing unregulated games with other people’s money… but, guess what… when it gets paid back, the US will be paying YOU.
though of course they might have to raise taxes to do it, and we know how much that will hurt people who might have to put off buying that second Lexus because they spent all their tax cuts on sure things on wall street.
sorry, i don’t get your point.
Coberly–I think Becker was getting to the relationship between Union activity and wages/salaries. My experience of unions is long and and largely unpleasant. However, where unions are present, employees are generally paid well and the law of the workplace is usually adhered to.
Good wages, safe workplaces,and productive employees go together. Walmart ought to unionize as fast as it can. I would predict they would make more money if they do with minimal cost.
Local union reps make smart managers. They keep you on your toes alright. All to the good.NancyO
Krasting, “Unrecorded” liabilities are not debt, still less “real debt” no matter how many times the propagandists at the WSJ would say so.
For example under the Constitution Congress is obligated to provide and provision a Navy in perpetuity (though oddly not the Army). This explicit Infinite Future liability is much more real than the implicit such liability that os not on fact such under current law (legally Social Security has no unfunded liability, as you know the scheduled benefit is just a schedule, the Supreme Court explicitly ruled that recipients have no property interest in scheduled benefits beyond those actually findable under current law).
No one realistically doubts that explicit governmental obligations to provide for the Common Defense will continue. Yet those costs are never quantified to give is a true measure of “Real Debt”.
Efforts to limit those calculations to include such things as military retirement or federal retirement that don’t include actual projected operating costs for that military or government program are simple exercises in special pleading. And that is being polite.
Cato/Heritage/AEI/WSJ lying propaganda gets closer to reality. Legal and fiscal nonsense does a fine descriptive jobs as well. Try selling to those who don’t know better.
Damn straight. The very idea that we should cut VA pensions and medical benefits to “pay off the natl. debt” is absurd and morally repugnant. I would like to ask people who propose these cuts to explain why they think we should do this. For one thing, the national debt will always be with us. To say anything else is ridiculous.
Furthermore, to invent imaginary “unfunded liabilities” knowing full well that no such liabilities exist in our budget processes is particularly objectionable. But, never mind, Bears. There’s more of this to come. NancyO
regarding your statement: …you aren’t going to do it by saying you are going to do it. the rich have something to say about it. in fact they have everything to say about it. it’s why we are here.
My point was that things are changing in a way that suggests there is more happening than wishful thinking and the current examples are historically familiar.
I went to read the article Krastings posted then I saw there were 212 comment so I started reading a few. Awful lot of people believing the we are doomed and beyond hope after reading that article.
I believe that we are doomed and beyond hope after reading the comments in most blogs. People are far stupider than I would have thought possible.
Thanks for explaining to me that things are changing. I hope you are right. And tell Nancy that I am a BIG believer in unions… despite some bad experiences.
if you get your revolution… hopefully without killing anyone.. and we end up with some kind of social democracy i don’t think i will complain… everyone paying taxes for certain social benefits is almost the same as my preferred “transparent, dedicated, capped, tax to pay for insurance.” I just think it is political suicide, and not quite honest, to be calling for “tax the rich, but not me.”
i should make clear that i wasn’t referring to the comments on Angry Bear. We seem to have lost our most determined trolls, and generally the commenters are at least as intelligent as i think i am.
but you don’t want to read most (?) other blogs if you want to have hope that people can solve their own problems in a democracy.