I live in a small city in upstate New York, and have never had any training in business or economics. I’m not proud of it, just acknowledging the plain facts of the matter.
Why then, oh why, can I see more arguments about the state of the economy than, say, your average CNN 7 pm-on-the-east-coast anchor Erin Burnett? We were treated once again tonight to a heap of unexamined assumptions and nebulous fears, disguised as news. Tonight’s conceit: that the ‘fiscal cliff’ was nothing compared to the real problem, the $16 trillion deficit, and that we would have to cut and cut and cut (or tax and tax) far beyond what President Obama or Speaker Boehner are proposing in order to do the adult thing and set this deficit problem right.
As usual, there was a lot of talk from the anchor about ‘entitlements.’ She had a problem though; her interview was Bill Gross of PIMCO fame, but the interview didn’t go quite as expected. Gross gently deflated the ‘clear and present danger’ tone of Burnett’s argument; he also disagreed with the thesis that ‘everyone’s taxes will have to go up,’ and pointed out that most spending as a percentage of income comes from the middle class and that raising taxes there could very well hurt the economy. He even talked about tax rates for the rich going up to just under Clinton-era levels. None of this deterred Burnett, who seemed tone deaf to what the man said.
(To be clear, Gross said we have a long term deficit issue, a point no one disagrees with. However, the U.S. was in a similar position coming out of World War II, and real economic growth and inflation simply eroded the debt away. This is another way of looking at the state of play, one which gets no traction on cable news, just like the idea that we have a continuing demand side problem gets no traction, just like the idea that the time for government austerity is when things are gong well gets no traction.)
She did manage to trot out the idea that the government’s borrowing costs could go way up as a result of the debt, even though the bond market, of which Gross is a senior and respected member, continues to loan the U.S. money at historically low rates. She had the man sitting right there and didn’t ask him why, if the debt is such a big and scary thing, people are pretty much paying the government to watch their money.
I also did not hear, as usual, any mention at all of where the deficit came from, which seems to be the real third rail of debt and deficit talk. It’s just not polite for anyone to say we ran up two wars, a tax cut and a Medicare benefit on the credit card, and that most of the rest of the deficit was caused by the economy cratering and the government both taking in less and having to spend more on basic social programs.
So what I still can’t get is how these highly paid and presumably bright cable news people have so thoroughly internalized a set of economic beliefs which literally make no sense, yet they don’t seem any worse for the wear. If I had to simultaneously believe a.) the government spends too much (and government never creates wealth) and b.) but we better stop the government from cutting spending because it’ll be bad for the economy and c.) we better cut government spending on poor, sick and old people because, ummmm, see ‘a.)’ my head would explode. I’d be in the corner, arms wrapped around myself, rocking quietly back and forth. I’d be….something, and one thing I sure as hell would be is angry that someone was trying to pawn off on me a load of stuff that collapses under the weight of its own contradictions. So how come the cable news people can believe it, and I can’t? Where’s the “this is bullshit” moment? It’s really astounding, that for all the endless cable talk about the fiscal cliff, how little of it is worth hearing.