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Home Publications Blogs Beat the Press Media Coverage Might Explain Greater Anger Over Public Pensions Than Wall Street Bonuses

Media Coverage Might Explain Greater Anger Over Public Pensions Than Wall Street Bonuses

Wednesday, 06 October 2010 04:53

The Post had a front page piece that highlighted efforts to cut pensions for state and local workers. The piece told readers that there is declining support for public sector workers because many people resent the fact that they have been forced to take pay cuts while public sector workers often have had their pay and benefits protected.

It is worth noting that major media outlets, like the Washington Post, routinely highlight and often exaggerate the pay and benefits received by public sector workers. In contrast, they deliberately mislead their audience about the extent of public support for major Wall Street banks.

For example, media outlets have repeatedly highlighted the fact that most of the TARP loans to the banks have been repaid without pointing out that these banks benefited enormously from having access to trillions of dollars in loans and loan guarantees at below market interest rates. Without these guarantees Goldman Sachs, Citigroup, Morgan Stanley, Bank of America and many other large banks would have gone bankrupt. Their shareholders would have lost hundreds of billions of dollars, freeing up wealth for non-Wall Street America. And their top executives would not be drawing pay in the tens of millions of dollars (@100 public sector worker pensions).

Major media outlets have acted almost as though they were conducting a political campaign. They have flooded the public with reports minimizing the cost to the public of the Wall Street bailouts while putting out endless stories (many largely false) about overpaid public sector workers.   

Comments (20)Add Comment
Where is the source?
written by AndrewDover, October 06, 2010 6:42
Lets assume 5 trillion with a 2% interest rate subsidy. That would be a $100 billion subsidy per year.

Where can I read the statistics that document the "trillions of dollars in loans and loan guarantees at below market interest rates." ?
written by izzatzo, October 06, 2010 6:59
Major media outlets have acted almost as though they were conducting a political campaign.

So what. So what if pols are working for media instead of media working for pols. Who cares who owns media. It's still competition at its best, pushing resources to their highest valued use. There's no market power or entry barriers. Anyone can say anywhere what they like under free speech.

Real economists understand the value of highly competitive media in a digital age. Under the wisdom-of-crowds theory, competition drives out truth, and truth drives out bias.

Stupid liberals.
written by xteeth, October 06, 2010 7:09
When the competition is to see who can get the most money from corporations for telling the biggest whoppers, that kind of media competition is, as usual, the kind that Cantservatives like best. Who is funding the truth telling. When you have a system where the truth is the average of the talking points of the right wing nuts and the centrists, you have half a lie. Even National Petroleum Radio has these "panels" with just Republicants and their rants on them. Fearing another government arbitrator forced down their throats, they give up news for propaganda.
We must follow the dictates of the employing class
written by Scott ffolliott, October 06, 2010 8:30
We must follow the dictates of the employing class

The newspapers promulgate those dictates
written by jamzo, October 06, 2010 8:31
an awful lot of what is passed off as news is nothing more than media interpretations of public opinion polls that it has commissioned

it seems like politicians, the media and the pollsters live in an alternative universe where they go round and round on issues unrelated to what is happening in this universecdq
Who is the Post Following Anyhow?
written by Ron Alley, October 06, 2010 8:45
The Post is not alone in touting the "payback" of the TARP funds. Treasury Secretary Geitner and President Obama sound the same trumpet. Perhaps such a fiction is needed curb voter outrage over the Obama administration uneven reaction to the financial bubble and the housing crisis.

The real issue here is truth. Unfortunately truth was the first casualty of the Obama administration. The Democrats in Congress are even less interested in truth. The result soon will become apparent.
Ditto for 'Free Trade'
written by leo, October 06, 2010 10:05
Another major disconnect is how 'free trade' is portrayed by traditional media versus what most Americans actually think of it.

After the 24/7 adulation that we've been getting from traditional media for the past 20 years, you'd be amazed to find out, according to a NBC/WSJ poll, that most Americans now believe trade has cost jobs and 'hurt' the nation over all.

Who knew?

written by sartre, October 06, 2010 1:17
"Lets assume 5 trillion with a 2% interest rate subsidy. That would be a $100 billion subsidy per year. "
Your myopia is quite amazing. It was not a 2% subsidy, I think you have forgotten what bond rates for investment banks were during the crisis. I addition the goverment backstop of any and all default stablized these bond prices themselves. It was a situation spiralling out of control and the taxpayers saved the day by putting their hard earned money on the line for wall street. Never forget that.
We Would be Better off Without Them
written by floccina, October 06, 2010 3:17
And IMO we would be better off without Goldman Sachs and Morgan Stanley. I don't know about Bank of America and City though.
written by diesel, October 06, 2010 4:25
Since the conversation morphed into the discussion of truth, I would like to pose a question to you intelligent people for your consideration.

I have been wondering this thought. Has there been any time, in the entire history of the human race, when a people were exposed to as many lies as we Americans are today?

Has any group been so drowned in a deluge of advertising messages that deliberately distort their image of themselves and the world? When every moment of our conscious life is crowded out by commercial messages that twist reality, what space is left for reflection and judgement? From the moment we are born, we are exposed to the never-ending din of commercial white noise. Our brains have been pickled in a sea of fantastic disinformation. Then add the Limbaughs et al to the mix, and is it any wonder that we Americans are unqualified to make decisions respecting our own good and the good of the nation? Can a people whose conception of reality is so distorted, survive? In the past, people had to see the world "as it is" or they would be eaten or starve. Today, our minds are split between the truth as we experience it and the world as it is presented to us through the media. I can't find a parallel to this in the past (well, maybe the mumbo jumbo of the church, but that was limited compared to the incessant intrusion of commercial unreality today). Can a people, whose minds are so thoroughly, deliberately scrambled, survive?

I don't mean this to be a rant. I'd welcome any feedback that gives an opinion and a reason why.

written by AndrewDover, October 06, 2010 5:16
Well gee, sartre, I'm just asking for a link to the facts. In other words, I'm trying to see correctly, and you accuse me of myopia because I want to see clearly?
written by zinc, October 07, 2010 12:10
You are right. The manipulation of the message by "media outlets" has reached epidemic proportions. I guess Michael Powell and the GWB republicans at the FCC weren't smarter than the founding fathers after all.

Yesterday I listened to Bush's Director of the CEA, on NPR, extol the value, and the profits, to the tax payer from TARP for goodness sake. The NPR should be renamed to the RNR, republican national radio, on economic affairs. There is no doubt that money, wealth, and power are distorting the message that Americans are hearing.

There is also no doubt that the recipients of the former progressive American society, like Michael and Colin Powell, are defecting in droves to carry the disinformation message. It is sad and cowardly but I think we, as a country, are turning the corner.

Let's see what November turns up.
holy melodrama
written by frankenduf, October 07, 2010 1:00
easy there, diesel- that was like "necessary illusions" meets "the allegory of the cave"- survive?!- ur point reminds me of when Vaclav Havel testified before congress and was lauded as a hero etcetc, meanwhile some Central American priests is like a walk in the park compared to what happens to dissidents in their countries- i guess my point is that we have the greatest freedom of speech, and so the great biased cacaphony that is the american industrial media is still advantageous to what most of the world's citizens have to endure- the only empirical study i can refer to is the school of Marx- the historical dialectic clearly dictates that when the pendulum swings too far toward the capitalist class, democracy of the masses swings back- heck, the only feasible threats to survival are big explosion, underwater, or cyborgs, which have all been pretty well portrayed by the summer blockbuster movies, which are about as educational as the media outlets u refer to
written by diesel, October 07, 2010 2:35
frankenduf (great moniker by the way)

I mean something more subtle, pervasive and insidious. Have you ever been truly "away" from civilization for a while, and noticed, when you return that there is absolutely nowhere one can hide in America from the incessant prattle of importuning advertisers? They exploit every nook and cranny of the economy. Am I the only person who remembers that when cable T.V. made its debut, it would be "commercial free"? After all, you paid for the service, so why pay twice by having to endure corporate advertising's "sponsorship"? That didn't last long. Same with the ad-free internet.

My question is, how can a people (and we boomers are the first totally TV generation) develop a coherent, functioning world view when every moment of their lives, they have been exposed to the exaggerations, disinformation and misleading claims of advertising and TV programming? Pervasive advertising is a recent, radical experiment in human development--as audacious as anything we attribute to the Russian intellectuals of the early 20th century when they thought they could purge people of their ties to the church etc. Only, we (meaning corporate America) have been infinitely more successful, since we had, as an operating motive, profit and personal or corporate gain and not selfless idealism. Remember when the Wall fell and the Soviet Union disintegrated? Exposed to western advertising for the first time, Russians were flabbergasted that anyone would expend so much energy to turn it into an art form. But it is also science, based on the same research simultaneously carried out in the Soviet Union by behavioral psychologists.

Individuals, subconsciously or consciously realizing that they have been systematically lied to, become skeptical of the notion that truth is to be found anywhere in society. Yet they must and do yearn to believe in something and not having a basic frame of reference is to risk going insane. Having no where to turn for a realistic, grounded perspective may be why so many are amenable to false prophets who promise a return to a "prior to the fall" version of a pure America.

If the proponents of capitalism and free markets claim that it is the most efficacious system in allocating goods and services, then they must also accept responsibility for the efficacy of advertising and the resulting damage to the collective consciousness. Standing Marx on his head, we are back to Hegel. Control of peoples minds by structuring the terms in which they think of themselves in their world is the truly important determinant and undermining any coherent mental categories may be the most effective form of control of all.

Which brings us back to purpose of "Beat the Press", to undermine the underminers.
written by liberal, October 08, 2010 7:48
AndrewDover wrote,
In other words, I'm trying to see correctly, and you accuse me of myopia because I want to see clearly?

It's well established that the subsidy was far greater than 2%, given that the appropriate rate should be far in excess of the risk-free rate.
this statement is a lie
written by frankenduf, October 08, 2010 8:34
yo deez- thanks for paragraph 3- that was well put and kinda profound- i wont presume u haven't already, but i will presume if u read "the dialectic of enlightenment" u will love it- especially the bon mots @ the end- ur points also remind me of habermas' concept of the 'lifeworld' being encroached upon- anyway, in a sense i still think ur melodramatic about the us- i went to ghana @ 7 years ago, and i shit u not advertising in the public space was WORSE than here!!- eg they had a nestle logo on every single highway post for miles on end (apparantly nestle owned ghana like murdoch owns us)- anyway again, i think that critical thinking can also be honed in such a media morass environ, although i certainly agree with ur overall point about cognitive pollution
written by diesel, October 08, 2010 9:36
Yes, I'm probably beating a dead horse and am groping like a man in a fog to grasp the outlines of some large vague entity by feel where other quicker minds see it all in a flash. Then I expend too many words trying to make sense of it.
written by diesel, October 08, 2010 11:36
I will read the book you have recommended. I looked at it on Amazon. I am familiar with Adorno through his work on devising tests that profile the psychology of the authoritarian personality.

"The Truth is the Whole" said Hegel.

Only certain individual entities are possible and certain favored configurations are possible because of the constraints imposed on them by the requirements of the self sustaining integrity of the whole. Like the wave theory of quantum physics demonstrates, no non-integral energy configurations are possible. To apply this insight to all the social sciences would involve a complete reordering of the way we have been trained to think of cause as consisting only of local temporal and spatial antecedents. The English (and American) tradition has been based on logical atomism, best expressed by Bertrand Russell, in which small indivisible units of meaning, or bits, are assembled according to an algorithm into larger coherent wholes. Thus, society is composed of many individual players, each seeking to optimize his/her outcome. This notion is clearly illustrated in Chaos Theory computer generated pictures. The German model, by way of contrast, begins with the integrity of the whole and finds within that the possibilities available to the individual. This seems to have been true of their respective philosophies, economies and societies. A wise person would simultaneously hold both perspectives in mind as poles in dynamic tension engaged in a dance, whose rhythm is his/her job to decipher (Darwin, Keynes). Some people will say WTF does this have to do with economics?
Here's the thing
written by Nately, October 09, 2010 12:46
Straw man argument -- two wrongs don't make a right. Maybe your mom might have told you that at some point.

The Wall St. bailouts are much higher profile and more morally infuriating, but the degree to which many, not all, but many public employees are extorting their states and municipalities is much more damaging overall.

Please justify the comment that "many of the stories" about public pensions and pay levels are "false." Back that up please.

I, on the other hand, will post the data -- the SAC Bee logged the last three years pay for almost all state employees in CA. Just look up the name of . You will be shocked at how many $200K+ nurses, CHIPers, and prison guards there are. It's disgusting, actually -- folks are often getting double or more a comparable private market position -- nevermind the ridiculous pension structures.

Socially acceptable elitism
written by FGS, October 09, 2010 1:34
It would seem to me that a person pulling in $8 million a year should have to suffer more scrutiny, whether their contribution could possibly be that valuable, than someone earning $80,000. Maybe not 100 times more, but at least more.

Instead, the inverse is true. People who scrub toilets in the executive washrooms are expected to be grateful for their own jobs, but the world is expected to be grateful to the executives, for showing up to theirs.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.