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Terry McKenna

Terry McKenna
Dover, New Jersey, USA
July 20
Conservative in the Burkean sense. Little tolerance for fools, less for liars (though I regularly vote for them).


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AUGUST 26, 2012 2:26PM

After the Age of Dinosaurs – the Age of Spin.

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Whether you realize it or not, the news media have changed over the last 3 decades.  Although stories are still reported, much of what is presented on news programs or websites is spin.  This occurs even with reliable venues like NPR, and on cable news and opinion shows, it is rife.  And of course for sources like Fox News the mix of spin and outright lies takes them beyond the pale.

The change has been slow, driven largely by the evolution of digital media, but also by the shift from broadcast to cable (and now by on demand sources).   This should not be news to anyone; but what has not been noticed or at least not been commented on is how the resulting media climate constitutes a new era.  If we take terminology from paleontology, we have moved from the age of (media) dinosaurs to a new media age.  We don’t have a name for it, but for this article, I’ll call it the age of spin. 

The launch of a commercial internet (outside of the laboratory) can be likened to the asteroid that struck the earth 65 million years ago.  Before the Internet, the news industry was ruled by daily newspapers staffed by reporters; since the internet emerged, the news has been ruled by sound bytes wherever featured, whether on cable TV, a Facebook post, or a tweet on Twitter.  The generators of “content” are now talking heads – usually experts (at least in their own minds) – sometimes alone; often in dueling pairs.  

And the expert is usually lying. 

If the expert is a political figure, we expect a lie.  But what is different now is the profusion of hired guns who are qualified in their discipline, but who have turned in their scruples for a payday.   (This habit was once confined to those shadowy figures who have carved out a niche giving expert testimony in court; now it has spread across the spectrum of many professions – particularly prominent are economists.)   And for my money, the right is worse than the left.

From policy question to policy question, here are a few examples of how expertise is abused.

A popular topic is the 2009 stimulus and whether it failed.  Often the media will call on someone from the Cato Institute, or AEI.  Our man will tell us that the 2009 stimulus failed, but he’ll say nothing about the counter opinion from economists who work in industry, nor will he point out that the stimulus was weakened by compromise designed to win Republican votes.  And that a purer stimulus would have done better. 

Then we’ll hear an energy expert talking about the need for more drilling on public land.  The implication is that this will lower the price of oil and gas, but you never hear that no matter how much oil we produce, we will never be able to control the price of oil.  Nor will we be able to produce enough to rid ourselves of imports.  All we might be able to do is get most of our oil from the US, Canada and Mexico – but even here, we will need to take advantage of the very dirty oil from oil sands in Canada.

Abortion and birth control are popular topics, often considered together.  The Catholic Church is a strong opponent of both and will often supply a theologian to state the Church’s view.  They never acknowledge that the Church’s definition that human life begins at conception is not the standard scientific view – which holds that until implantation, the journey toward birth* has not begun.  The Catholic Church and other conservative Christians used their particular definition of human life not only to oppose abortion, but to also oppose most birth control (since the stopping implantation is equated to abortion). 

Just in case anyone doubts my characterization of how experts behave, the following is a specific example of something that pissed me off just a few weeks ago. It was in the NY Times, and was a short piece by Jeffrey Miron, an academic economist who teaches and also works for the Cato Institute.  Funny about Cato Institute, it is a Charles Koch confection, and everything the institute puts forth serves to defend two simple ideas  - that what we need is low taxes and little government.  These notions are great for an energy billionaire.  For the rest of us, these ideas don’t really help.  Still, a fella’s gotta make a living, so a number of “scholars” study and publish under the Cato banner.  I assume they have long learned to enjoy the taste of bullshit.

Mr. Miron lent his voice to oppose taxing capital gains (and Paul Ryan’s budget ideas) to a group of essays – the others disagreed with him (I think they all did, I skimmed).  

Here is a bit of what he said:   

 The U.S. currently taxes both labor income (wages and salaries) and capital income (interest, dividends and capital gains).

 This approach punishes labor effort and savings, but the latter effect is the more pernicious (why?). Savings finances capital formation and research and development, which are crucial for economic growth.  … up to there, I’m fine.  But then we have:  Taxing capital income causes capital to seek countries with lower rates. Jobs are lost when that capital builds businesses elsewhere.  …  (the) American taxation of capital income leads capital to countries with lower rates of taxation. The big losers are then the people who might have earned wages and salaries in the businesses using that capital.   ...  Paul Ryan may have a hard time convincing the country to repeal taxation of interest, dividends and capital gains, since this approach looks like an excuse to reward the rich. On the basis of standard economics, however, Ryan is on firm ground.

Is Ryan on firm ground?

No.  Mr. Miron avoids any consideration of the real economic environment.  For example – capital stays or flees for a number of reasons.  Taxation is but one.  Two far more important reasons are currency risk and political risk. 

An example of currency risk is with the Euro.  Euro holders watched for a number of years while the dollar dropped relative to the Euro.  Now the two currencies are stable between each other, but there is a slightly stronger concern that the Euro could fall, especially if Greece leaves the Euro zone.  Investors have moved to the dollar, even Chinese investors (despite a valid concern that the US dollar may lose value to the renmibi).

Political risk is another concern.  If you have assets in dollars –  you have little worry that the government will stop you from taking your profits home with you, even overseas.  Outside of Western Europe and Japan, that remains a primary concern.

Then there are the investments themselves.  The big international companies like Apple, Exxon, Shell or Deutschebank are stable and valuable.  There are no Chinese brands that have the stability and value of these.  At least not yet.  So much for capital flight. 

Then there is the notion that taxing capital is even worse than taxing labor.  That may sound great on paper, but since we already tax labor, it seems completely unfair to tax the worker and leave the billionaire alone. 

*Re life beginning at conception.  No, conception is simply one more step in a continuum.  The egg and sperm were alive before conception, and remain alive after.  Yes something has occurred, but if not implanted in the womb, the cell will soon die.   






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big story, media, spin, lies

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