Friday, December 12, 2014

Morning In America

In 1984, with unemployment above 7 percent and the country clawing its way out of the worst economic slump since the Great Depression, President Ronald Reagan bet his re-election chances on selling the American public on a belief that a better tomorrow was just around the corner. The ad campaign, cleverly titled “Morning in America,” combined with a wave of patriotism fueled by the 1984 Summer Olympics in Los Angeles, helped Reagan waltz to a 49-state landslide that November.

Flash forward thirty years, and there is an *actual* morning in America occurring, except few in the media want to report on it, much less give the current occupant of the White House any credit for creating it. It is remarkable to see how quickly the devastation wrought by the Great Recession of 2008 has faded down the memory hole. At its nadir in March 2009, the country was losing nearly three-quarters of a million jobs a month; the Dow Jones Industrial Average fell to 6,547, its lowest level since 1997, and had lost the equivalent of nearly half its value in the six months from when Lehman Brothers went belly up. Foreclosures skyrocketed, housing construction came to a near stand-still and both General Motors and Chrysler would have gone bankrupt but for aggressive government intervention. The final price tag on the Great Recession was 10 percent unemployment, a budget deficit of more than a trillion dollars, and trillions more (on paper) lost to reduced 401(k) balances, home valuations, and stock market losses.  

As we close the books on 2014, the economic health of our country is much stronger, but you would be hard pressed to find nearly the same amount of coverage of this fact in the “’mainstream media,” much less a tip of the hat to President Obama for his hand in it. You see, the media far prefers paint-by-numbers pieces about Obama’s need to reach out to Republicans after November’s mid-term elections or his (supposed) unpopularity. Consider:

·        The deficit is not only at pre-Great Recession levels, but because the economy is larger than it was in 2008, as a percentage of GDP, it is much smaller, specifically, less than 3% of that total – a level most economists agree is indicative of long-term economic stability.

·        Chrysler, now majority owned by Fiat after the government midwifed that transition, is experiencing strong growth. In both October and November of this year, Chrysler’s Jeep line saw record sales of their vehicles. Meanwhile, General Motors emerged from bankruptcy with an initial public offering and the government sold its last remaining shares in GM last December at a total net loss of just $10 billion.[1]

·        The nation’s energy prices have plummeted. Gas is at its lowest level in four years, saving drivers billions at the pump, a huge expansion in natural gas resources have cut home heating bills, and massive expansions in alternate energy, particularly solar energy, has occurred in the wake of incentives and efforts advanced in the 2009 American Recovery and Reinvestment Act.[2]

·        The unemployment rate is now below 6% and we are closing in on five years of consecutive job growth, most of which has occurred in the private sector. One can only speculate what the unemployment number would be had states not laid off hundreds of thousands of cops, firefighters, and teachers when they’re budgets shrank and tax collections were reduced

·         Health care spending is growing at the slowest rate on record while more than 10 million Americans have gained access to health insurance thanks to the Affordable Care Act. Indeed, actuarial studies of Medicare show that the long-term growth in that program has slowed so much (in part due to the Affordable Care Act) that we may save hundreds of billions of dollars over the next decade from health care costs we simply will not incur.[3]

·        The stock market, admittedly not my favorite barometer for economic health, has nearly tripled since hitting its floor in March 2009. This has meant that retirement accounts, pension funds, and investments for millions of Americans have gone up significantly, further adding to the nation’s economic health.

And this is all being done while domestic government spending is at Eisenhower-era lows and after a small pinch was felt by the wealthiest Americans, whose tax rates went up ever so slightly in early 2013. Of course, when you are receiving the lion’s share of the economic benefit, it should not be surprising that you barely feel the effect of a small deduction in your take home pay.[4]

With all of this good news, why is it that the right track/wrong track numbers (24/65) show the populace in a foul mood?[5] Perhaps we should not be surprised. That same poll showed that 73% of Americans think the budget deficit has been growing for the last five years (it has shrunk by nearly $1 trillion) and 53% think fewer people have been deported than a decade ago (it is way more and only 29% knew that). This is on top of the 30+ years of evidence we have showing that Republican Presidents drive up deficits and debt while Democratic Presidents are left to clean up the mess. But because the media has ceased being a neutral arbitrator of “facts” and has instead morphed into meek neutrality that simply presents both sides (even when facts exist to prove the truth of one over the other) that people are so misinformed about basic information is predictable.

This is not a small thing but it is also a curious double bind that the media creates. On the one hand, they put the onus on the Administration to get the word out, but on the other, show little interest in reporting on good news.[6] Once done, the story becomes how “ordinary” Americans don’t “feel” the economic recovery or how getting into the details of how the Affordable Care Act is changing health care delivery is too “wonky,” which leaves the national media left to report on their more preferred topic – “dysfunction” in Washington that is blamed on both parties and oh yes, no one really likes that Obama fellow.

Ultimately, the public is ill-served because the political arguments suck up all the oxygen in the room and suffocate the discussion of the policy. Perhaps that is why after turning twelve years of Reagan-Bush deficits into a surplus, Democrats were turned out in 2000 or that stemming the flood of red ink accumulated through tax cuts, an unpaid for Medicare prescription drug benefit, and two wars, not to mention the most calamitous financial crash in 80 years, Obama’s achievements are met with a shrug by the media, who are already copping to “Hillary Fatigue” and fixating on who the Republicans will choose to run against her in 2016. It will be left to the historians to put this all in proper context. Today’s “journalists” simply can’t be bothered with reporting the truth.
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[1]  It should be noted that at the time of this sale, the government had netted a recovery of roughly $11 billion from all investments through the Troubled Asset Relief Program, so even though the taxpayers took a small loss on GM, the overall investment was a net positive.
[2]  As recently as 2008, solar accounted for almost zero home energy production. In 2014, solar generated enough energy to meet the electricity needs of more than 1.5 million homes, a doubling of that amount over 2013.
[3]  A recent report issued by the Congressional Budget Office reduced its estimate for Medicare costs in 2019 by $95 billion – the equivalent of all that is spent in a year on welfare programs, Amtrak, and unemployment insurance. All told, Medicare is on pace to spend $700 billion less this decade than was predicted in 2010.
[4]  That many of the affluent receive income from dividends, capital gains, and carried interest, which are not taxed as severely as ordinary income, does not hurt either.
[6]  To take one example, the latest report regarding lowest-on-record increases in health premiums was buried on page A22 of the New York Times.

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