But as Krugman has said for years now, contra CNBC, there is no fiscal crisis. If there were, the Treasury would not be able to borrow at 1.57 percent, as it did yesterday, near all-time lows and below the current rate of inflation (meaning investors are paying Uncle Sam to borrow their money). Krugman, among many others, is vehemently opposed to Simpson-Bowles, which is a deficit plan that would put an artificial cap on government revenue and reduce tax rates on the rich by 12 percentage points.
The advocacy of a certain type of Very Serious (to cop a Krugmanism) point of view isn’t the only problem with the Rise Above nonsense. It’s the reporting—poor to the point of misleading— on what the “fiscal cliff” is. You’d think if you were going to jeopardize what’s left of your journalistic credibility with a crusade that you’d do a better job explaining the issue.
First, the terminology. The term “fiscal cliff” is deeply misleading and a broader media failure in its own right (our Greg Marx has a good explainer on the nomenclature). It’s more like a fiscal slope or better yet austerity gridlock. The problem is that if no agreement is reached, current law will slash the deficit by sharply raising taxes and gutting spending.
If Obama and Boehner don’t reach an agreement by December 31, the economy will not plunge into a precipice on January 1. Here we’ll turn to no less an authority on business and investing than Warren E. Buffett, who says, “The fact they can’t get along for the month of January is not going to torpedo the economy.” Reuters notes that the tax increases and spending cuts wouldn’t be implemented for months.
But CNBC has no qualms about “fiscal cliff,” which it uses without context.
And this gets to another problem with Rise Above: Does anyone think the two sides weren’t going to hammer out some agreement to avoid $720 billion in new taxes and spending cuts by the end of next year but for the self-righteous protestations of talking heads on CNBC?
Last but not least is the hypocrisy of CNBC in talking about Rising Above politics. This is the network, after all, that kicked off the Tea Party, an austerity push that was one of the more damaging political movements in recent memory. With no apparent irony, CNBC features Rick Santelli himself in its ad, urging politicians “to reach across the aisle,” while looking angry as ever:
Reach across the aisle, losers!
This is the network that employs Larry “Goldilocks” Kudlow, whose record of being appallingly wrong is rivaled only by his record of ideological rigidity, whose lesson for Republicans three days after the election, was “Don’t Go Wobbly, GOP.” Rise Above—the re-elected president of the United States!
But CNBC is working hard to appear even-handed on its anti-politics campaign:
With the American economy held hostage by politicians from both parties, CNBC is launching a network-wide initiative to call attention to the fiscal crisis.
Note the last two words there: “fiscal cliff” has become “fiscal crisis” and fiscal crisis is a synonym for deficit spending.
But the “both parties” formulation is false equivalence. It’s simple: You can’t have meaningful medium to long-term deficit reduction without raising taxes, Obama and the Democrats have cut trillions of dollars in spending, and Republicans have refused to raise taxes. Most non-blowhards already know this—A poll by CNBC’s better half, NBC News, found that Americans say Republicans get the blame for any standoff by 53-29 compared to Obama—why doesn’t CNBC agree?
It’s just not CNBC’s job, institutionally, to campaign for anything. Cover the news, as they say, don’t become it.
— Further reading:
CNBC: kid gloves for bankers, boxing gloves for bank critics. Interviews with Barofsky, Spitzer, and Krugman underscore the network’s capture.
Waiting for CNBC. A tragicomedy in one long act.
CNBC Editor: The People Are Revolting! Rick Santelli plays Mel Brooks playing Louis XVI.
A Zombie Lie Is Born. CNBC’s false welfare-state story spreads far and wide.
Becky Quick Thinks the Fed Is Too Focused on Jobs. That makes no sense historically or in the current context.