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Morgenson's 16-year-old assault on objective reporting seems like deja vu all over again.

“The problem isn't just liberal bias, although that's part of it,” wrote Gretchen Morgenson in an old op-ed piece that presages some of her more recent dissembling. “America's political reporters just don't care to understand even the simplest economic concepts.” And by the simplest concepts, she meant supply-side economics.

In the October 16, 1996 edition of The Wall Street Journal, she recounted her frustrations as press secretary for the short-lived 1996 presidential campaign of Steve Forbes. She and her boss wanted to promote a platform as bold and timely as today’s GOP. They wanted to privatize social security, eliminate taxes on capital gains and estates, and impose a 17% flat tax. Morgenson’s broadside against Forbes’ critics also seems timely.

"Many reporters are either too lazy or too ignorant even to do simple math,” wrote Morgenson in a fit of chutzpah resonates 16 years later with the Romney campaign:

When Fortune asked the Forbes camp for details of the candidate's flat-tax plan, for instance, it took campaign press secretary Gretchen Morgenson two weeks to come up with answers. The reply? The Forbes flat-tax plan would duplicate House Majority Leader Dick Armey's flat-tax plan.
Fortune fared better than a reporter at the Minneapolis Star-Tribune, who came away empty handed after asking about Forbes’ plan to privatize social security. “How would there be any additional dollars for workers to pay into their IRAs?” he wrote.  “Forbes has not publicly addressed the question. Morgenson, after promising to research the question, never called back.”

But most importantly, she encapsulated in a few brief paragraphs, the standard template for rightwing historical revisionism, used more recently in her book, Reckless Endangerment, co-written with Joshua Rosner.  On the anniversary of the book's initial release, it's time to point out some of those timeless techniques.

Then and now, Morgenson faced the same obstacle: The empirical data eviscerated her claims. In 1996, there was zero evidence validating Forbes’ supply-side theories, and a mountain of evidence debunking them. In 2010, there was zero evidence to support her thesis that affordable housing goals caused the 2008 financial crisis, and a mountain of to evidence debunk it. So she reinvented the past, according to a three-step process:

1. Invoke a “historically proven fact,” which is, at best, a half-lie, then
2. Use this phony “fact” to nullify all of the empirical data;
or, conversely,
    Use this phony “fact “to invent a phony trend, so you can
3. Malign the integrity and honesty of those who disagree.

In the Journal, Morgenson used a “historically proven fact,” to label a couple of New York Times reporters, Alison Mitchell and David Rosenbaum, as lazy and very possibly dishonest. Her dissection of their Times story on the politics of competing tax proposals, dated June 9, 1996, is telling:
 

Although [Mitchell and Rosenbaum’s] piece tried for balance, the writers committed several sins common to political reporters tackling economic issues. First, they assumed that tax cuts are always budget busters, ignoring the historically proven fact that tax relief can stimulate the economy and thereby increase government revenues…

Ms. Mitchell and Mr. Rosenbaum also employed the lazy journalist's favorite trick: masking their own opinions with the words "most economists believe." Times readers learned that "most economists, regardless of their ideology, accept [that] continued reduction of the budget deficit would do more for the economy than either an across-the-board tax cut." Never mind that "most economists" rarely agree on anything, or that "most economists" are mostly wrong in their predictions. Did Ms. Mitchell and Mr. Rosenbaum actually interview the majority of America's thousands of economists to come to their conclusion? If not their reporting is not only lazy but dishonest.

Begin with Morgenson’s “historically proven fact,” about the stimulative impact of tax cuts. This little nugget is used to nullify all the lopsided the empirical data of the prior 15 years. Every single one of Reagan’s tax cuts proved to be a “budget buster.” Conversely, Clinton’s tax increases had shown better-than-expected results by rapidly bringing down federal deficits, thereby lowering interest rates and stimulating economic growth. And of course history has proved that “most economists,” were right. In Clinton’s second term, the deficit turned into a surplus during a period of unprecedented job growth.  Why, when the economy was booming in 1996, would economists feel the economy needed to be stimulated with tax cuts?

As it happened, the phrase, “most economists believe,” showed up more than 100 times in news articles published by The Economist, The Financial Times, and The Wall Street Journal during the 18 months prior to publication of The New York Times article, which Morgenson chose to trash. Read the story to consider whether her assessment is fair.

What goes around comes around; Morgenson is now works at the Times, where of her colleagues have walked through the revolving door of politics and media.  

Past is also prologue in Reckless Endangerment, which revisits the 1990s to follow the career of a man who, in his own small way, hastened the demise of the Forbes campaign. Many readers may be unaware that Johnson helped shorten Morgenson’s all-to-brief political career sixteen years ago. To help pay for his tax cuts to the rich, Forbes’ included, as part of his 1996 platform, a proposal to eliminate the home mortgage interest deduction. This drew the ire of corporate interests in the housing industry. So, a few days before the New Hampshire primary, the Coalition to Preserve Home Ownership---composed of the National Association of Home Builders, the National Association of Realtors, Fannie Mae and Freddie Mac—released ads warning homeowners against various, "famous American home-wreckers," which included tornadoes, termites, and the elimination of the mortgage tax deduction.  No candidate was named, but politicians and the media got the point.

Morgenson and certain politicians decried Fannie and Freddie’s political expenditures as, “inappropriate.” But Fannie Mae Chairman James Johnson defended the move, arguing that his company’s mission required it to "be active in the policy debate."

Whatever the ads’ impact, Forbes, who placed fourth in the New Hampshire primary, dropped out of the race on March 11. Morgenson then landed on her feet as a senior editor at Forbes magazine.

Morgenson neglected to disclose that her latest book settles old scores--she's an artful dissembler--by making Johnson the chief vilain of the mortgage crisis.

Quite a feat on Johnson's part, given that he left his job at Fannie at the end of 1998, and he did not work in mortgage finance thereafter.  Is her evidence against Johnson any more substantial than her "proven historical fact," that tax cuts helped pay for themselves? Not really. In fact, her deceptions are far more audacious. Stay tuned.

_____

For some strange reason, the Journal has scrubbed Morgenson's piece from its online archive. So, in the spirit of full disclosure, here is the "virtual" hyperlink:

Press Hounds Howl at Econ 101
By Gretchen Morgenson
11 October 1996

With tax cuts the centerpiece of Bob Dole's campaign, the Washington press corps has been weighing in regularly on economic policy. As usual, the coverage has been utterly ignorant. "Most people who cover politics don't have a clue about commerce," says James Gentry, head of the University of Nevada at Reno's Center for Advanced Media Studies.

Mr. Gentry is right. I know first-hand from my stint as press secretary to GOP primary candidate Steve Forbes. As a former business reporter, I had more than a passing interest in how the political press reported Mr. Forbes's economic platform. It was fascinating, if unnerving, to watch otherwise intelligent reporters mangle Mr. Forbes's main issues: the flat tax, medical savings accounts, Social Security reform, a gold-backed currency.

Now it's Mr. Dole's turn. Indeed, the meat grinder got cranking months ago. A June 9 page-one story in the New York Times by Alison Mitchell and David Rosenbaum discussed the role tax cuts would play in the upcoming election. Although the piece tried for balance, the writers committed several sins common to political reporters tackling economic issues. First, they assumed that tax cuts are always budget busters, ignoring the historically proven fact that tax relief can stimulate the economy and thereby increase government revenues, as Jack Kemp kept pointing out in Wednesday night's debate.

Ms. Mitchell and Mr. Rosenbaum also employed the lazy journalist's favorite trick: masking their own opinions with the words "most economists believe." Times readers learned that "most economists, regardless of their ideology, accept [that] continued reduction of the budget deficit would do more for the economy than either an across-the-board tax cut." Never mind that "most economists" rarely agree on anything, or that "most economists" are mostly wrong in their predictions. Did Ms. Mitchell and and Mr. Rosenbaum actually interview the majority of America's thousands of economists to come to their conclusion? If not, their reporting is not only lazy but dishonest.

Time magazine, meanwhile, reported in its Aug. 19 issue that Mr. Dole's tax plan not only "wins few plaudits from economists" but "is not really an economic program at all." Oh? What is it then? According to author George J. Church, the plan's purpose is to "bait . . . voters with the promise of lower tax bills."

The problem isn't just liberal bias, although that's part of it. America's political reporters just don't care to understand even the simplest economic concepts. I'm not talking about how the Black-Scholes options pricing model works or even how to figure the present value of future dividend streams. I mean the basics, like supply and demand, or the effects of taxation on economic growth and personal savings.

Consider the coverage Mr. Forbes's economic plan received. On Jan. 26, a news story in the Philadelphia Inquirer stated flatly: "Whether you call it supply-side or voodoo economics, there's still a fallacy at the core of Forbes's argument: the notion that taxes have anything to do with entrepreneurship and real wealth creation."

The same month, the Los Angeles Times offered its readers the following wisdom: "The biggest winners under [the Forbes flat tax] -- and most other flat-tax systems -- would be people who have the most money." Never mind that under Mr. Forbes's plan a family of four making less than $36,000 a year would have been exempt from federal income tax altogether.

Many reporters are either too lazy or too ignorant even to do simple math. Countless reporters were like the one from the ABC-TV affiliate in Boston, WCZB, who asked me to help her figure how much a taxpayer making $50,000 a year would pay under Mr. Forbes's 17% flat tax.

And political reporters, not surprisingly, tend to see the world through the prism of politics. In January, a Washington-based reporter from the Associated Press was writing a story about the Forbes flat tax. During our conversation I gently asked if she could see why the practice of taxing dividends twice was bad for America and why its elimination made economic sense. "I don't want to understand the economics of it," she replied breezily. "I just want to understand the politics of it."
Classic. And typical of political reporters from Washington to San Francisco, from Manchester to Des Moines -- the folks who shape the way Americans view the candidates, the economy and the future.

I suddenly understood why the coverage of economic issues by the Washington press corps is as woeful as it is. A political reporter doesn't see it as his job to understand how a tax cut would affect the average American. It's much more important for to figure out how a candidate's opponents are likely to demagogue an issue, then beat them to the punch. The pattern is playing itself out now with the Dole tax cut: The "story" is how Mr. Dole abandoned his previously unflagging efforts to reduce the budget deficit for a politically expedient tax cut.

We can't expect political reporters to be experts in economics. But why can't they make an effort to understand Econ 101? Their ignorance ought to be embarrassing in an age when money talk and investment advice saturate our culture.

Yet cluelessness reigns. The University of Nevada's 1996 Nevada Fellows Program teaches basics in business reporting to working journalists during the summer months. But, according to program director James Gentry, "we've never had a political reporter in the program." Reporters from the culture beat, business and city desks, yes -- but those who cover politics just don't seem to care.

Don't Washington reporters realize that a better understanding of commerce would improve their work and elevate them above the me-too press crowd? In this era of dizzying technological change and economic anxiety, journalists who can make sense of it all would be way ahead of the pack. Instead, alas, politics prevails. No wonder readers and viewers are tuning them out.

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Comment Preferences

  •  Well, her reference to "commerce" is (0+ / 0-)

    telling.  While economists focus on producers and consumers in constructing their models of the economy, the commercial class, made up of middlemen who take a "cut" from each side, is causing mayhem. There's a reason why chambers of commerce in all the states are busy recruiting political candidates.  They've got a subterranean interest to protect. It's not easy to secure a profit when there's no added value.

    "In the name of the nation, and of the dollar and of the rule of law, you and your children shall sacrifice for the good of all." Rmoney prayer

    by hannah on Mon Jun 11, 2012 at 04:44:26 PM PDT

  •  hmmm... so what horrible article is Gretchen (3+ / 0-)
    Recommended by:
    Youffraita, kck, Midwest Meg

    about to release upon the world?

    Gretchen had some of the best kick-ass reporting done on the housing bubble collapse and the corruption.

    In May 1998 Gretchen Morgenson became the assistant business and financial editor at the New York Times. She has written about the conflicts of interests between financial analysts and their employers who generate income money from the companies that the analysts assess.

    Beginning in 2005, Morgenson has been focusing on executive compensation packages being paid by American companies that she asserts has reached levels far in excess of what can be justified to shareholders.

    In 2006, Morgenson broke a story about a Wall Street analyst (Matthew Murray) who was fired shortly after he reported emails to Congress concerning potential violations of SEC regulation AC by the investment bank (Rodman & Renshaw) that he worked for at the time. The emails allegedly documented that the investment bank wouldn't let the analyst lower his rating, or have his name removed from coverage, of an investment banking client. A subsequent article by Morgenson highlighted a letter she obtained from the Senate Finance Committee in which Senator Grassley stated that the investment bank's Chairman (General Wesley Clark) had acknowledged to his staff that the analyst had been fired from the investment bank as a result of reporting the emails to Congress.[3]

    In 2009, The Nation called her "The Most Important Financial Journalist of Her Generation".[4] She has appeared on Bill Moyers Journal,[5] and Charlie Rose.[6]


    In my honor he pulled out old forgotten dignity and walked straight in a crooked world. ~~poetry of young Barack Obama

    by bronte17 on Mon Jun 11, 2012 at 04:45:35 PM PDT

  •  How to make popcorn: (1+ / 0-)
    Recommended by:
    Ekaterin

    Put a thin coating of oil in the bottom of the pan; place three popcorn kernels in pan.  Cover with lid.

    When the three kernels pop, add on layer of kernels to the bottom of the pan.  Shake pan until popping stops.

    Pour popcorn into bowl.  Add melted butter and salt.

    Serve hot.

    To make the argument that the media has a left- or right-wing, or a liberal or a conservative bias, is like asking if the problem with Al-Qaeda is do they use too much oil in their hummus. Al Franken

    by Youffraita on Mon Jun 11, 2012 at 04:50:12 PM PDT

  •  WTF? (4+ / 0-)

    Did you join up specifically run this hit piece on Gretchen Morgenson?

    She is a superb columnist and has done more than any other journalist I know to expose the various dirty deeds that led to the meltdown and the shenanigans that continue to this day.

    Whatever else you may be, you are no "Truth Teller" -- Times or otherwise.

  •  A disappearing diarist.... (5+ / 0-)

    ...who isn't defending his/her questionable diary? How...odd.

    •  How...trollish? (3+ / 0-)
      Recommended by:
      Horsefeathers, Ekaterin, bronte17

      Hi, Ekaterin!

      I have better recipes for popcorn but I'm saving them....

      To make the argument that the media has a left- or right-wing, or a liberal or a conservative bias, is like asking if the problem with Al-Qaeda is do they use too much oil in their hummus. Al Franken

      by Youffraita on Mon Jun 11, 2012 at 10:05:56 PM PDT

      [ Parent ]

      •  Hi Youf, great to see you! (0+ / 0-)

        Hugz and hope all is well with you.

        We just discovered kettle corn....wow, instant addiction!

        I'll post a recipe for how to open a bag of kettle corn in the next troll diary.

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