What will Washington do, what will the media choose to cover? Over the next 31 days, a shocking amount of this democracy’s future framework will come before the board. Aggressive legislation designed to get around Roe v. Wade in several states is now coming into the frame; will it survive early appellate challenge? With the nation’s arbitrary debt limit about to be reached, the bitter pill of compromise will be swallowed; what will be sacrificed…what should be sacrificed? Iran recently test-fired ballistic missiles with (possibly) payload capabilities that would allow them to deliver nuclear warheads. The United Nations, Europe, and the United States will be pushed to definitive action either against or in support of Israel.
What will, I wonder, the headlines of July look like? With all of this on the horizon, will we the people be treated to a laundry list of lurid stories about drunk-driving Republicans and photo-tweeting Democrats? Will we be enthralled by tales of poor deprived NFL draft picks, forced by cruel circumstance to work actual jobs in order to make ends meet? Will we thrill to the excitement only an NBA lockout can provide? Will we the people, after the Stock Market Crash of 1929, after the S&L implosion of the 1980’s, after the deregulatory insanity of the derivatives recession of today, really sit and listen while sage members of the Wall Street elite lecture us and our representatives on the correct way to manage an economy? I wonder.
I suppose everything depends on the headline, and the facility with which reporters, producers, and editors can turn important information into compelling selling points for the advertising of junk. These are my thoughts, at least, when I hear news readers (OK, anchors) talking about the “stories” they are working on. We are meant to have a free press in America composed of reporters, we are cursed with a free press devoted to story writers. The concept extends to blogs as well…one can feel confident that it is the most aggressive, confrontational, or abrasive columns I write that gain the most comments and web traffic. The notion is depressing enough when one attempts to address “values issues”, the level of emotional ferment and raving that goes on in our democracy’s economic reporting is an absolute scandal.
In 2009 and a part of 2010, health care reform was the subject du jour for racy columns and abject flights of journalistic fancy. Seldom was an article written that did not feature exaggerated extrapolations, reckless assumptions, or outright fabrications. This year, and for the month of July in particular, the plot point will be the debt ceiling. Noticeably absent from all of the reporting, is any mention of what would happen if Congress simply raised the limit without any other associated action. The notion is not covered by journalists, because they who shall not be named (my own little journalistic flight of fancy) absolutely do not want the public to catch on to their game. The “they”, in this case, are the bond-holders of the world…the only folks who have anything (and it is a small anything) to fear from continual debt increases over the next decade.
Whatever your ideological bent, the financial crisis facing our nation is a demand crisis. Houses and commercial real estate are empty, so there is no demand for more real property development. Consumers have money for bills and little else, so there is little demand for consumer products and services. The average hours worked statistic, available at the Bureau for Labor Statistics, has barely increased over the last three months…if that number doesn’t climb, then businesses have no need to hire new workers. If business doesn’t hire new workers, more money remains stuck in corporate retained earnings, hedge funds, and inflated commodities…that is to say, it isn’t floating around the economy at large.
As government spending was not a cause of, or trigger for, this recession, and as a reduction in government spending only serves to pull more cash out of the economy, the question that should be asked by the free press is:
Why are we so focused on spending cuts when we have yet to replace the job losses of the recession?
It is a query seldom posed in the conservative mainstream media, that place in our free press where the Greenspan-inspired Deficit Hawks are still regarded as important and credible voices. Emotion and “creative” reporting of economic data have no place in this debate; numbers are numbers, and history is quite clear on several points.
- Government spending in general, and deficit spending in particular, do not create economic downturns by any measure. Pick your poison my friends; unemployment, job growth, gross domestic product, if anything, the historical data supports the opposite conclusion. (I would say that fact makes Keynes and Krugman right, but that would simply be inflammatory.)
- Tax cuts are subject to the same law of diminishing returns as most other things are; once you fall below the optimal rate, the marginal benefit of a cut is greatly reduced. (In plain English, the tax cut miracle isn’t really a miracle.)
- Debt, for the United States’ economy, becomes dangerous when the economy moves towards full employment. Inflation is the primary problem with long-term debt (and the monetizing that finances it), but if people aren’t working, they aren’t spending, and inflation can’t happen.
- Truly fixing a problem means addressing the root cause of the problem. Trade unions, Medicaid, Medicare, and Social Security did not cause this recession, and this recession is (along with the conflicts in the Middle East and the tax cuts of 2001 and 2003) the largest source of current deficits and debt. Again, regardless of politics or ideology, the facts are the facts. Ending the wars, ending the jobless recovery, and ending the tax cuts (which Republicans designed as temporary and sold via the reconciliation rules as deficit-reducers) would kill off much of the deficit and debt.
- Truly fixing a problem means addressing the root cause of the problem. Long-term deficits have two causes; artificially high valuations of the U.S. dollar, and the explosion in health care costs. Addressing the deficit should mean addressing these two concerns, in conjunction with the three issues above. Cutting agricultural subsidies, public television, and Social Security won’t approach the real problems…but they do make for interesting stories.
In our democracy, we are frequently called to decide what things we want to accomplish together (via our democracy), and what things are best left accomplished individually (via our capitalist economic model). Will you read about these choices in the headlines of July, or will the choices be made for you, and vary only by cable channel in message and tone? Will the free press, and Washington political circles, focus on real problems and real opportunities, or will they prove once again to be as distracted teenagers, easily bored and disconnected from reality?
The Rational Middle will be listening…