Yesterday the Social Security and Medicare trustees' reports were released. This annual ritual often gives reporters a chance to exaggerate the long-term problems of the Social Security system.  This year, the news was more or less what folks were expecting: By the trustees' forecasting, Social Security's trust fund will be depleted in 2037, while Medicare's hospital fund will run out of money in 2017.

Somehow, the Washington Post decided that Social Security was the real concern--its page-one story is headlined "Alarm Sounded on Social Security."

The lead rings the same bells:

The financial health of the Social Security system has eroded more sharply in the past year than at any time since the mid-1990s, according to a government forecast that ratchets up pressure on the Obama administration and Congress to stabilize the retirement system that keeps many older Americans out of poverty.

Much less attention is given to Medicare, which the Post does tell us deep in the piece "remains the more urgent problem." The paper sure has a funny way of showing its urgent concern, though.

As FAIR noted, former Fed chair Alan Greenspan tried to provide some perspective about Social Security and Medicare two years ago. When NBC's Tim Russert asked him about the health of Social Security and Medicare, Greenspan said that Social Security's problems were minor. Economist and former Social Security trustee Robert Reich writes, "Don't be confused by these alarms from the Social Security and Medicare trustees. Social Security is a tiny problem. Medicare is a terrible one."

The Washington Post, for reasons that aren't entirely clear, are sending a very different message.  As Dean Baker has documented for some time, the paper just seems to have something against the program.

Asking "Can We Get Reporters to Stop Saying That EFCA Takes Away the Secret Ballot?" Dean Baker bluntly states (Beat the Press, 5/7/09) that "it's not true." Even though this is one of the "most often repeated lines of the opponents of the Employee Free Choice Act"--"that it will deny workers the right to vote decide on a union with a secret-ballot election"--Baker explains exactly how "that is wrong, wrong and wrong":

First of all, workers do not currently enjoy that right. Maybe that should be repeated a few times in case there are any very slow reporters reading: Workers do not currently have the right to a secret-ballot election to decide whether or not to be in a union.

Under current law, an employer has the option to recognize a union based on a majority of workers decision to sign cards requesting recognition. That's right, folks; under current law, employers can decide to recognize a union without a secret-ballot election.

In fact, with the EFCA, "the decision as to whether or not to have a secret-ballot election or to organize through majority sign-up would rest with workers, not employers." Which means that "anyone who claims that they oppose the Employee Free Choice Act because they support workers' right to a secret ballot, they are not telling the truth. The media should be pointing this out." See the recent issue of FAIR's magazine Extra!: "For Media, 'Card Check' Promise Is One to Break: Corporate Outlets Suddenly Discover 'Workers Rights'" (2/09) by Janine Jackson.

While asserting the extremely simple journalistic principle that "Past Records Should Matter In Assessing Views on the Economy," Dean Baker (Beat the Press, 5/2/09) is willing to admit that

everyone makes mistakes, but the odds are that anyone who couldn't see an $8 trillion housing bubble is not a really good person to rely upon for predictions on the economy. Joe Nocera gives a quick survey of some radically conflicting forecasts in his [New York Times] column today.

It's worth noting that all the optimists completely the missed the bubble and the impact that its collapse would have on the economy. At least some of the pessimists, most notably Nouriel Roubini, recognized that the conditions for a serious crisis were being created years ago.

See the FAIR magazine Extra!: "Busted Bubble: The Press Fell Down on the Job on Housing Prices" (11-12/08) by Veronica Cassidy

Asking a simple question about a large issue--"How Do Trillion Dollar Bank Bailouts Fit With 'Free-Market Fundamentalism?'"--Dean Baker (Beat the Press, 4/19/09) tells his readers that "the obvious answer is, they don't"--since, "if you are a free-market fundamentalist, then you are absolutely opposed to bank bailouts" that "involve taking taxpayer dollars and handing them to banks that would go belly up if left to the market":

However simple this distinction might seem, it somehow escaped the NYT, which discussed the policies promoted in recent decades as though they could be plausibly described as "free-market fundamentalism." It should be perfectly apparent to everyone at this point that the people designing economic policy in recent decades had no philosophical commitment to "free markets"; they were trying to design policies that had the effect of redistributing income upwards.

In the case of the banks, this meant giving them implicit government insurance, both through the FDIC and the "too big to fail" policy, without constraints on their behavior or making them pay for it. This approach has nothing to do with free markets; it is a story of wealthy people using their political power to get valuable benefits from the government.

The upshot, according to Baker, is that "the NYT is insulting its readers by implying that these policies had anything to do with free market philosophy."

Looking back over how corporate "media abandoned any pretense of objectivity in pushing the original TARP back in the fall," when "they eagerly pushed the story that the economy would collapse if the TARP did not pass," Dean Baker (Beat the Press, 3/28/09) recalls how "media never told the public that the Fed had the ability to takeover the banks in the event of a national emergency and it had plans to do exactly this back in the early '80s debt crisis." Which makes it somewhat unsurprising that "the new line that being pushed to argue that there is no alternative to the Geithner plan is the claim that Obama would need congressional authorization to have the FDIC take over bankrupt banks":

Is that so? It's not clear why. The law authorizes the FDIC to take over bankrupt banks. Under the law passed by Congress, the FDIC is supposed to take over Citigroup, Bank of America and other zombie banks.

It's likely that the FDIC would not have enough money to pay for cleaning up these zombies, especially if it pays off the banks' bondholders. (It has no legal or moral obligation to pay these bondholders, unlike FDIC-insured deposits.)

The Fed could almost certainly lend the FDIC the necessary money, as it is doing under the Geithner plan. The Fed can pretty much do whatever it wants, so it is not clear why anyone would think it could give money to subsidize banks through the Geithner plan, but not to clean up the banks' mess.

Of course, the other story is interesting also. Suppose that the FDIC seized the bankrupt banks and lacked the funds to clean up the mess. Would the Republicans allow the banks' bondholders to get cleaned out? That doesn't seem likely, but it might be fun to watch.

The underreported "fact is that the banks and their political allies have lied to the public continuously throughout this crisis to get more taxpayer money for their pockets. It is irresponsible to take anything these people say at face value at this point." See the FAIR magazine Extra!: "Going All Out for Bank Bailout: Media Paint Crisis as Too 'Urgent' for Skepticism" (1/09) by Dean Baker & Kris Warner

Listening to "budget hawk" media figures who urge President Obama "to commit to spending cuts and/or tax increases" because they are "upset that the deficits projected for 2013 or 2019 are too large," Dean Baker (TPM Café, 3/25/09) finds it

especially annoying to hear the whining from this group of deficit hawks since their whining in prior years helped to drown out serious discussion of the dangers posed by an $8 trillion housing bubble. While some of us were yelling at the top of our lungs about the imminent disaster that would hit the economy when the housing bubble burst, the media chose to focus on these deficit hawks with their dire warnings about budget deficits 40 or 50 years in the future. Because the media and political elites chose to pay more attention to the deficit hawks than those warning about the housing bubble, we now get to enjoy the current economic crisis. And, one result of the economic crisis is (drum roll, please) . . . record deficits.

Compelled to "put the point so simply that even a Washington Post editor can understand it," Baker writes that, "because the media highlighted the views of the people who were ranting about the deficit rather than the views of people who understood the economy, we both got a wrecked economy and larger deficits."

Economics blogger Dean Baker asserts that "about the only thing that readers can learn from an article on Japan in the business section today" is that "The New York Times Doesn't Like Japan" (Beat the Press, 2/22/09). Among the piece's "variety of complaints about Japan's economy, many of which are contradictory," is "the standard line about people not spending because deflation means that goods will be cheaper in the future if they wait"--which Baker debunks by noting that, with "deflation...generally less than 1.0 percent," a Japanese shopper "considering buying a $600 television would save approximately 50 cents by delaying the purchase a month." Finding this motivation "unlikely" to make many "delay purchases of big-ticket items," Baker also examines a "chart accompanying the article [that] complains that consumers are 'neither spending nor saving'":

This is bizarre, because saving simply means not spending, so, if consumers are not spending, then by definition they are saving. In fact, this chart shows a big increase in consumption over the last 20 years, with the saving rate having fallen from more than 15 percent in 1985 to about 4 percent in 2005. The article later complains that consumers are not spending because they don't have confidence in the country's pension system (which it tells us is a warning to the United States), but it is not clear how much lower they would want the saving rate to go.

That "the chart shows that nominal consumption has fallen by more than household income" has Baker explaining that this "implies that either taxes have increased or the data in the chart is inaccurate."

There's a trope that you often see in corporate media discussions of the stimulus plan: Yeah, but do you really want to spend money on that? It may have started with the misrepresented contraceptive plan--which seemed to be grounded in a traditional media fascination/embarrassment at anything involving sex--but now it's moved on to anything that...well, it's hard to say exactly what's objectionable about some of the programs media are objecting to.

Take this confused passage from an L.A. Times editorial (2/2/09):

But too many of the items have little apparent connection with economic growth--witness the nearly $5 billion for prevention, wellness, "comparative effectiveness research" and training in the health field, the $2.1 billion for Head Start and the $300 million to improve teacher quality, just to name a few examples from the 647-page House bill. Other provisions, such as the $64 billion for preventing layoffs at schools, colleges and "high priority" state programs, are about saving jobs, not creating them. In the short term, there may be no difference between preventing job cuts and increasing payrolls--one prevents a bad situation from worsening, the other makes a good situation better. But an investment this large should pay long-term dividends by increasing productivity, and that's hard to do when so much of the money is going toward maintaining the status quo.

Let me just say that if you don't see the connection between improving education and increasing productivity, than you really shouldn't be writing editorials about the economy.

Or here's a short item from the New York Times' Science section (2/3/09), a reprint of a blog post by Andrew Revkin:

Both [the Senate and House stimulus] bills would spend "$600 million for accelerating satellite development and acquisition, acquiring climate sensors and climate modeling capacity, and establishing climate data records." They also call for at least $140 million for climate modeling.

Regardless of the merits of such research, does it fit in a bill meant to exploit unoccupied labor in an economic downturn?

The short answer is: yes. A slightly longer answer is provided by economist Dean Baker (Beat the Press, 2/3/09):

Spending that is not stimulus is like cash that is not money. Spending is stimulus, spending is stimulus. Any spending will generate jobs. It is that simple. There is a question of whether the spending will go to areas that will provide benefits, long-term or short-term, to the economy, but there is no question that money that is spent will create jobs and therefore is stimulus.

Any reporter who does not understand this fact has no business reporting on the economy.

Today's Washington Post (11/14/08) explains that Obama's economic advisers "span the policy spectrum:"

They include free traders and "fair traders," deficit hawks, Wall Street executives, corporate moguls and labor advocates.

Why the different typographical treatment of free trade and fair trade? The implication is that "free trade" really is free, whereas "fair trade" is just what its supporters call it. This treatment of so-called "free trade," as economist Dean Baker has long explained, "reflects deeply held biases in the media. The most important point, which I unfortunately have to keep repeating, is that these are not free trade agreements. They do not free all trade and, in fact, increase some forms of protectionist barriers." But in the corporate media, "free trade" does not generally require any sort of qualifier or explanation.

The Associated Press (10/29/08) does its usual sad job trying to fact-check candidate statements--this time working a hefty dose of neo-Hooverism into the mix.

AP's Calvin Woodward charges that

Democratic presidential candidate Barack Obama was less than upfront in his half-hour commercial Wednesday night about the costs of his programs and the crushing budget pressures he would face in office.

For instance, Woodward responds to Obama outlining his economic proposals by noting: "His proposals--the tax cuts, the low-cost loans, the $15 billion a year he promises for alternative energy, and more--cost money, and the country could be facing a record $1 trillion deficit next year." The unspoken assumption here is that because the country is in the midst of a financial crisis that has incurred huge bailout costs, the federal government will need to cut spending or raise taxes in order to reduce the deficit.

This economic analysis is quite controversial, to say the least--economist Dean Baker (10/9/08) says this approach "make[s] about as much sense for the economy as nuking Silicon Valley." If Baker is too progressive for your economic tastes, here's conservative Martin Feldstein arguing that "the only way to prevent a deepening recession will be a temporary program of increased government spending." Yet AP presents deficit-cutting in the midst of a recession as it-goes-without-saying common sense.

The only support that Woodward provides for his claim that Obama's failure to offer an austerity program as a response to the economic crisis means that he is being "less than upfront" with the voters is this passage:

The nonpartisan Tax Policy Center, whose other findings have been quoted approvingly by the Obama campaign, says... "Neither candidate's plan would significantly increase economic growth unless offset by spending cuts or tax increases that the campaigns have not specified."

The Tax Policy Center report in question (9/15/08) provides no elaboration on this rather peculiar economic advice. The conventional wisdom is that tax cuts and spending increases stimulate the economy, whereas tax increases and spending cuts tend to slow it down; if AP has discovered evidence to the contrary, that should be the headline--it's bigger news than a mere Obama infomercial.

Fed up with "economic reporting [that] relies almost exclusively on experts who managed to overlook both the stock market bubble and the housing bubble," Beat the Press blogger Dean Baker (10/6/08) writes that the Washington Post's Howard Kurtz "still misses some very fundamental points on the media's reporting on the economy":

First, reporters should recognize that people employed by an industry lobby have an ax to grind. They are not neutral observers. (more...)

Continuing to prove himself as tenacious as the Washington Post is doctrinaire, economist Dean Baker provides another example (9/28/08) of how the "Post editorial board occasionally just makes up numbers to advance its arguments" (more...)