Reporting Economic News
Imagine, for a moment, that you are reading the following story in The New York Time:Fed Chair touts continued profit stagnation as unemployment plummets and wages soarWASHINGTON: Amid a wave of new enthusiasm over the nation's unprecedented economic health, Federal Reserve Chairman Alan Greenspan yesterday reassured average Americans that he did not anticipate the need to raise interest rates anytime soon to choke off excess corporate profit growth and keep the economy from overheating.In his midyear report to the House Subcommittee on Fair Distribution of Wealth, Greenspan noted that, remarkably, the U.S. economy continues to provide new jobs and higher living standards for working Americans without the inflationary pressure of rising stock prices. "I don't want to sound overly optimistic," the chairman cautioned, "but at the moment there is simply no end in sight to the prosperity that millions of Americans are experiencing with each Friday paycheck."The reaction of Main Street, which had been concerned that Greenspan might send a negative message over fears that wages are rising too rapidly, was ecstatic. "The chairman has gotten the message," observed author and labor policy analyst Michael Moore, "that the growth in purchasing power of ordinary Americans is good for the economy in general, and that wages should be allowed to rise to their natural level, however high that might be."What is unusual about the current economic expansion is that corporate profits and stock prices have remained flat, a phenomenon some analysts have attributed to lingering corporate anxiety over labor uprisings and bad publicity. While this may not be good news for investors, it comes as a relief to policy makers who fear that the inflationary pressures of an escalating stock market would force them to apply the brakes by raising interest rates."Any way you look at it, the economy is in great shape," declared consumer advocate Ralph Nader."The vast majority of people who comprise the economic lifeblood of this nation are doing better than ever before," agreed progressive economist Robert Kuttner. "You can't ask for more than that."OK, now pinch yourself. It was a dream.If the above struck you as an absurd inversion of reality, it was intended as such. But ask yourself, is it any more absurd than the reality it mirrors? Granted, the powerful would never voluntarily switch places with the powerless to create the improbable economic relationships described above. And even if they did, The New York Times would never print such a one-sided assessment of the results -- or would it?The mock news story above contains several features that should strike any media analyst as suspect: the portrayal of certain economic events as good news even though they clearly benefit one class of people at the expense of another; the exclusive use of sources whose agendas coincide with those of the prospering class; the use of euphemisms and industry jargon to avoid stating in plain English what is really happening to the non-prospering class.And that is precisely how The New York Times and like-minded members of the mainstream media report economic news, especially news concerning corporations, the financial markets and the overall health of the economy. In fact, the Times (singled out for scrutiny in this column because of its considerable influence on public perception, government policy and other media) tends to report on the overall health of the economy primary through its coverage of corporations and the markets, almost as if the many economic issues facing consumers, laborers and the disenfranchised simply don't count. It is news by, of and for the owning class, and it paints a picture of our economy that is as warped as the typical CEO/factory worker pay ratio.When Alan Greenspan gave his "upbeat" midyear report last month to the House Banking Subcommittee, the Times matched the Fed chairman upbeat for upbeat, reporting that Wall Street was "ecstatic" and trotting out a parade of investment-company analysts and pro-corporate think-tankers to affirm what the Times wants its readers to feel justified in believing: that soaring stock prices and corporate profits, coupled with stagnant wages and therefore low inflation, is the best possible economic news one might ever hear.The Times reporting fails to grasp (or fails to help its readers grasp) the downside of our so-called six-year expansion and its implications for ordinary wage earners. In expansionary times, wages usually begin to rise as employment rises, lending some credence to the clich that a rising tide lifts all boats. This time, so far, that has not happened, which means that the investing class is having its cake (rapidly rising stock values) and eating it too (no need for the Fed to raise interest rates to quash wage inflation). It also means that low- and middle-income Americans continue to lose ground relative to their upper-income counterparts, as they have done fairly steadily since the late '70s. In fact, one could make the case that investors have reaped their recent rewards directly at the "expense" of the working class, a not-so-pretty picture that has been painted by certain economists who do not generally get calls from Times reporters.One such economist is Dean Baker of the Economic Policy Institute, which, according to a recent Nexis database search, received more media mentions (454) in 1996 than any other progressive think tank -- but not nearly as many as the centrist Brookings Institution (2,220), the conservative Heritage Foundation (2,086) or the conservative American Enterprise Institute (1,417). While the EPI has aggressively sought more media attention in the hope of adding balance to mainstream reporting, it has not been easy. "We've talked with reporters who tell us that they could not get away with quoting us on something," Baker says, referring to pressure from higher-up editors and/or news executives. He observes that media seem to find progressive sources somehow more suspect, citing a National Public Radio story in which he was quoted along with two business lobbyists. NPR did not identify either lobbyist's funding source but took pains to point out that the EPI is "labor-backed" (25 percent of its funding comes from labor groups) -- giving the impression that Baker's input was therefore less objective.So, for the most part, we get the "objective" view that wages must be kept in check so that corporate earnings and stock prices can soar -- without the likes of Baker, Kuttner, Moore et al. to rain on the profit parade. And no Times reader will believe you when you tell him that class warfare is alive and well in the United States.