Monday, April 16, 2007

The CBS School of Economics

A sinus infection and bad weather kept me away from church on Sunday morning. Instead of scrambling to make the early worship service, I settled back in my recliner for an extended viewing of CBS News Sunday Morning, a program that I've watched (and even admired) for many years.

I first came across the broadcast during my own broadcasting days, when I pulled a Sunday shift at a local radio station. As various preachers delivered the message to their radio flocks, I adjourned to the TV in our newsroom, for a glance at one of the most deliberate (and literate) programs in television news. Created by the late producer Robert Northshield and anchored by the incomparable Charles Kuralt, Sunday Morning set the standard for weekend news programs, offering longer, more thoughtful pieces on a wider variety of subjects, including literature and the arts. When Kuralt retired in 1994, CBS replaced him with the only logical choice, longtime radio anchor (and essayist) Charles Osgood. Mr. Osgood is an accomplished writer, poet and musician, and he's put those talents to good use on the program down through the years.

With Osgood at the helm, Sunday Morning still has the look (and feel) of what Northshield and Kuralt created almost 30 years ago. But it's still a CBS News production, and some of the left-leaning news reports would be equally at home on the Evening News with Katie Couric. Considering yesterday's "cover story," on the struggles of the American middle class, reported by Rita Braver.

You may recall that Ms. Braver was CBS's White House Correspondent during much of the 1990s, when such stories were in relatively short supply. When Braver joined the White House beat in 1992, her husband (D.C. power lawyer Robert Barnett) was already there, working as a personal attorney for Bill and Hillary Clinton. According to Newsmax, Mr. Barnett subsequently recused himself from the position of White House attorney, possibly to prevent conflict of interest accusations toward his wife. But Barnett was reportedly involved in the removal of papers from Vince Foster's office after his suicide, and he later negotiated a series of big-money book deals for Mr. Clinton and his wife. Nothing illegal about those latter activities, but as Newsmax observes, the fiduciary ties between Barnett and the Clintons should have been enough to keep his wife off the White House beat.

For her latest report, Ms. Braver echoes that familiar Democratic talking point about the "squeeze" on America's middle class. Facing rising costs for housing, health care, energy and college tuition, members of the middle class are finding it harder to make ends meet. To illustrate that point, Braver and her crew traveled to Youngstown, Ohio and Dallas, interviewing couples that are "scraping by" on $70-80,000 a year.

As I watched the piece, the phrase "lifestyle choices" kept flashing in my mind. Both families profiled by CBS live in beautiful homes, and they certainly don't come cheap. The Dallas family actually lives 60 miles outside the city, allowing their in-laws to assist with child care. But that comes at a price: a monthly gas bill of $600-700, allowing the husband (a police officer) to commute to his job in the city. And, let's assume that these families (like most Americans) have substantial credit card and consumer debt (the average American family has an average charge card balance of $7,000). Paying the monthly bill for VISA, MasterCard or Amex can certainly eat up your disposable income, and leave less money for other things, like investing, or saving for a college education.

The wife in Youngstown bemoaned the fact that "her parents" were able to pay for her college education, but she can't do the same thing for her sons. First, I don't believe that parents are obligated to pay for a child's higher education, and secondly, I'd be willing to bet that the woman's parents were much more disciplined "savers" than their children. True, college costs are running well ahead of inflation's pace, but there are still affordable financial options for students and parents, including state-sponsored 529 plans, work study programs, ROTC scholarships, and of course, old-fashioned thrift.

According to Ms. Braver, the real problem is that the rich keep getting richer, while the middle class languishes. She cites data from Yale political science professor Jacob Hacker, who (coincidentally) has written a new book about the middle class squeeze. According to Professor Hacker, after tax income for the wealthiest one percent of Americans rose 20% between 2003 and 2004, compared to a 3.6% increase for the "middle" of the middle class.

Professor Hacker advocates an "insurance and opportunity society" that would safeguard economic security and expand economic opportunity, ensuring that all Americans have the basic financial security they need to reach for and achieve the American Dream." I haven't read Hacker's book, but it sounds like a recipe for socialism. How do you fully "safeguard economic security" in a free-market system? And just what is "basic economic security?" A guaranteed minimum income for all Americans? Cradle-to-grave health care? Federally-backed pension plans for everyone? All of the above? Not surprisingly, Hacker's book has been praised by many of the usual suspects: Democratic Presidential candidate John Edwards, former Labor Secretary Robert Reich, The Nation and The New York Times. Given those endorsements, I can imagine that Professor Hacker's plan is going to be expensive, particularly if you write a big check to the IRS every April 15th.

With a nod toward balance, Ms. Braver did interview an expert from the Heritage Foundation, Rea Herderman, who observed that things aren't so dire for the middle class, based on the high levels of home ownership, consumer spending and an economy that still generates millions of new jobs. But to temper that bit of good news, CBS retorts Mr. Herderman with one of its own polls, which finds that most Americans believe life is getting worse for the middle class. And, Ms. Braver even asked Herderman if the government should be "doing more" for its beleaguered middle class, like instituting universal health care.

Mr. Herderman quickly (and correctly) dismissed that idea, but those families in Youngstown and Dallas seemed in favor of more government support. And why not? In typical MSM fashion, CBS never gets around to explaining who will pay for all those added benefits. The richest one percent of our society? According to the Tax Foundation, that group earned 19% of the nation's income in 2004, but paid almost 37% of all income taxes.

And what do they do with the money that's left over? They start businesses, hire new workers, order new machinery, and do the other things necessary to keep our economy rolling. Increase taxes to expand the social safety net, and you'll see another economic downturn. Rising government revenues have (historically) followed economic booms, often spurred by tax reductions. It's a simple economic principle, most recently demonstrated by the Bush tax cuts. But it's not something you'll see on Sunday Morning. I'm guessing that Ms. Braver didn't learn much about free markets and tax cuts in her econ classes at the University of Wisconsin at Madison.

2 comments:

Peter said...

When Braver joined the White House beat in 1992, her husband (D.C. power lawyer Robert Barnett) was already there, working as a personal attorney for Bill and Hillary Clinton. According to Newsmax, Mr. Barnett subsequently recused himself from the position of White House attorney, possibly to prevent conflict of interest accusations toward his wife. But Barnett was reportedly involved in the removal of papers from Vince Foster's office after his suicide, and he later negotiated a series of big-money book deals for Mr. Clinton and his wife. Nothing illegal about those latter activities, but as Newsmax observes, the fiduciary ties between Barnett and the Clintons should have been enough to keep his wife off the White House beat


I should be amazed ,but I am not amazed how in-bed and inbred the MSM is with the Democratic Party. Like the physical practitioners of incest, our own MSM produces a deformed and lethargic progeny. So much so, I can't help think of Washington as Appalachia on the Potomac.

sammy small said...

For the past 9 years, I have plotted something I call "spendable income" which is gross pay minus state/fed taxes, FICA, mortgage, and prop taxes. The results show that while gross pay income rose by 60%, spendable income only rose by 50%. The main culprit was federal/state income tax. I think that's what they call bracket creep.

"Spendable income" has hovered either side of 50% year over year for the duration. But the cost of living seems to have outpaced the 50% increase in spendable income. Or maybe lifestyle choices are making a bigger impact on my spendable income and I just want to blame the government. I think I need to relocate from SoCal to recalibrate my needs.