SOLOMON: In Treasury Shuffle, Media Dealing Same Cards

The media spin about the changing of the guard at the Treasury Department has been consistent: It's too bad that the superb Robert Rubin chose to resign. But Larry Summers is capable of walking in his footsteps.Time magazine lauded Rubin as "perhaps the most popular treasury secretary in the postwar era." As for his replacement, Newsweek offered reassurance this way: "Wall Street, the only critic anyone cares about anymore, took the Summers appointment in stride."That pretty much typifies the prevailing media assumptions. If you don't view Wall Street as the proper arbiter of the U.S. government's economic policies, you don't rate as "anyone" at all.When economist Dean Baker assessed the coverage of Rubin's resignation by two key media outlets -- the Washington Post and the New York Times -- he found that the news accounts "present his record in almost exclusively positive terms." Along the way, the articles "misrepresent many statistics and ignore much recent history."A senior research fellow at the Preamble Center based in the nation's capital, Baker does more than gnash his teeth about the stories that appear in the influential Post and Times. On a weekly basis, Baker compiles an "Economic Reporting Review" for the media watch group FAIR (where I'm an associate). The results are available at praise for Rubin's economic priorities is habitually selective. We hear little about how economic elites have gobbled up this decade's prosperity, leaving crumbs for other Americans. "The median real hourly wage has risen by a total of just 1.6 percent since 1992," Baker notes. "This means that the typical worker has seen extraordinarily slow wage growth through this recovery. In the '60s, real hourly wages generally grew by more than that in a single year."While many reporters and pundits have hailed Rubin for his global role, Baker points out that "Rubin's management of the international economy has not been very successful from the standpoint of the populations of the nations whose economies he attempted to direct. While the financial markets in nations such as Mexico, Korea and Thailand have largely recovered from the impact of their financial crises, the populations of these nations have not."Baker cites realities for many millions of impoverished people -- who clearly would not qualify to be "anyone" as far as Newsweek is concerned. In South Korea, for example, "the unemployment rate is nearly four times its pre-crisis level. Real wages remain far below their pre-crisis level in Mexico. The Russian economy contracted by nearly 50 percent under the direction of the team of `reformers' backed by Rubin."Prominent journalists are upbeat about the likelihood that Larry Summers will pick up where Rubin leaves off as treasury secretary. "But continuity is the last thing we need," according to economist Mark Weisbrot, research director at the Preamble Center. He maintains that the U.S. Treasury Department is the "primary culprit" behind the economic turmoil that continues to afflict such countries as South Korea, Indonesia, Russia and Brazil.In practice, the Treasury Department controls the International Monetary Fund, says Weisbrot. "A government that does not agree to the IMF's conditions for lending will be denied credit from the World Bank, other multilateral lending agencies, and often private sources as well. ... Rubin went to great lengths to preserve this system of absolute power." The IMF imposes measures that slash public-sector programs for meeting basic human needs. Meanwhile, the shifts in policies create a very lucrative economic climate for foreign investors.Weisbrot recalls that Secretary Rubin "also distinguished himself by fighting to keep the Clinton administration from increasing spending on programs for the poor. But his largesse knew no limits when it came to bailing out his Wall Street friends when their loans went sour in Mexico or South Korea."While major American news outlets were quick to portray the selection of Larry Summers as a reassuring sign, Weisbrot sees things differently: "Summers' appointment is a sure sign that the interests of traders, speculators and multinational banks will remain supreme."Both Time and Newsweek closed their coverage of the Rubin-Summers shuffle with the identical anecdote, evidently supplied by the same spinmeister: In a chat with aides, Summers compared following Rubin as treasury secretary to replacing the legendary Yankee center fielder Joe DiMaggio. When an assistant mentioned that the replacement was Mickey Mantle, a smiling Summers said he already knew that.But neither Time nor Newsweek had any space to let readers know about an infamous memo written by Summers in December 1991, when he was chief economist for the World Bank. "The costs of health-impairing pollution," he wrote, could be measured in terms of "the foregone earnings from increased morbidity and mortality." Summers added: "From this point of view, a given amount of health-impairing pollution should be done in the country with the lowest cost, which will be the country with the lowest wages. I think the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable and we should face up to that."Norman Solomon's most recent book, "The Habits of Highly Deceptive Media," was published this spring.

Enjoy this piece?

… then let us make a small request. AlterNet’s journalists work tirelessly to counter the traditional corporate media narrative. We’re here seven days a week, 365 days a year. And we’re proud to say that we’ve been bringing you the real, unfiltered news for 20 years—longer than any other progressive news site on the Internet.

It’s through the generosity of our supporters that we’re able to share with you all the underreported news you need to know. Independent journalism is increasingly imperiled; ads alone can’t pay our bills. AlterNet counts on readers like you to support our coverage. Did you enjoy content from David Cay Johnston, Common Dreams, Raw Story and Robert Reich? Opinion from Salon and Jim Hightower? Analysis by The Conversation? Then join the hundreds of readers who have supported AlterNet this year.

Every reader contribution, whatever the amount, makes a tremendous difference. Help ensure AlterNet remains independent long into the future. Support progressive journalism with a one-time contribution to AlterNet, or click here to become a subscriber. Thank you. Click here to donate by check.

alternet logo

Tough Times

Demand honest news. Help support AlterNet and our mission to keep you informed during this crisis.