By the way, Dean Baker did good work on yesterdays Diane Rehm Show—although such work can always be better. If you want to listen to Bakers riffs, you know what to do—just click here.
DESPITE ITS LIBERAL BIAS: Tonight, George Bush will show a little leg about his plans for Social Security. And if recent history is any guide, CBS News will continue its disgraceful reporting of this seminal topic.
How bad has it been at CBS? Consider Trish Regans astounding report on Saturdays CBS Evening News. According to worthless pretty-boy anchor Russ Mitchell, Regan was begin[ning] a two-part series on who would gain and who would lose with Social Security change. And fairly clearly, Regan knows the Official Script for reports about Social Security (links below). After a brief overview statement, she brought on a Requisite Clueless Guest—a 20-something who didnt know his keister from a keyhole:
REGAN (1/29/05): Right now Social Security is running a surplus, but by 2018, the Social Security Administration projects that surplus will be gone. And by 2042, there will only be enough cash on hand to pay 73 percent of all scheduled benefits. It's something that's hitting home with younger Americans like 27-year-old Charles Davis.Of course, young Americans who agree with Charles dont have a clue what theyre talking about. As any semi-literate journalist would know, there is no projection under which SS wont be there for people like Davis. Indeed, Regan herself had just described the official projection of the SS trustees, according to which young workers like Davis will get 73 percent of promised benefits, even if no adjustment is ever made to the program. And as any journalist should know, that assessment is based on gloomy assumptions; this weeks CBO report says that full benefits will be paid until 2052, with 78 percent of promised benefits paid after that. But no matter! Many young people—people like Charles—have been misled by decades of pseudo-con spin; theyve to come believe that Social Security wont be there for them, a bald-faced, complete misconception. And guess what! Even though these people are grossly mistaken, screaming incompetents like Trish Regan know how SS reports must be typed. As if she were in a zombified state, Regan dragged the hapless Charles on the air, where he repeated his gross misconception. And Regan never explained an obvious fact. She never explained that Charles was wrong, that his understanding is totally bogus.
DAVIS (videotape): We think it won't be around when we retire.
REGAN: According to a recent CBS News-New York Times poll, 65 percent of Americans under the age of 30 agree with Charles.
Of course, Charles is hardly the only young person who lacks the first clue about Social Security. To all appearances, the attractive young Regan is clueless as well—when she says this, for example:
REGAN: Critics say one problem with privatizing Social Security is that it will cost upwards of $1 trillion, a steep bill when the country is already running a budget deficit.Good God! Critics say that privatizing will cost upwards of $1 trillion? To learn what critics actually say, read the following passage from a recent Paul Krugman column. Krugman cites a well-known memo by White House aide Peter Wehner:
KRUGMAN (1/11/05): Advocates of privatization almost always pretend that all we have to do is borrow a bit of money up front, and then the system will become self-sustaining. The Wehner memo talks of borrowing $1 trillion to $2 trillion ''to cover transition costs.'' Similar numbers have been widely reported in the news media.Duh! At this point, even the White House is talking about upwards of $2 trillion—but thats just the cost of the programs first decade! As Krugman notes, the cost over time would be much larger—around $15 trillion in all, he says. Krugmans work appears in the New York Times, a fairly well-known American paper, but its not clear if Trish Regan reeds reel gud. If she does, her on-air work doesnt reflect this great skill.
But that's just the borrowing over the next decade. Privatization would cost an additional $3 trillion in its second decade, $5 trillion in the decade after that and another $5 trillion in the decade after that. By the time privatization started to save money, if it ever did, the federal government would have run up around $15 trillion in extra debt.
So lets see: Regan started by presenting a know-nothing kid who recited a piece of total cant. Later, she quoted a price for Bushs plan that vastly understates what even Bush aides are saying. But what made up the bulk of her effort? She quoted a single financial planner, David Yeske, who has run the numbers and found that Charles, who's a high earner, would come out ahead in a private account (full text below). But nowhere in her report, or on the CBS web site, does Regan explain Yeskes calculations. Viewers must make a leap of faith. They have to assume that Regan—incompetent in everything else—has handled this matter correctly.
Its almost impossible to fathom the total incompetence found in this disgraceful report. Indeed, CBS seems unwilling to report on Social Security without dragging some deluded 20-something on the air (links below). But then, most of the CBS staff seems to fit in this category too. Trish Regan, thank you so much, the scrub-faced Mitchell pleasantly said as his helpless correspondent concluded. Mitchell and Regan looked good on the air. They also committed malpractice.
In any industry that actually mattered, incompetence like this would not be accepted. Regan and Mitchell would be out the door fast, so fast that they wouldnt have time to say good-by to their make-up, wardrobe, hair and nails people. But CBS has routinely bungled this topic, and theres no sign the network intends to stop. And oh yes—all over the country, citizens hear about this nets liberal bias. Major scribes dont voice a word of dissent. Next week, a key question: Why is that?
REGAN TURNS TO AN EXPERT: During its ludicrous Bill Burkett blunder, CBS was widely scolded for relying on a single expert. But thats exactly what Regan did when she determined how Charles would make out:
REGAN: Under President Bush's plan, Charles could invest a portion of his Social Security money into a private account, much like a 401(k). While the president has not yet outlined specifics, a 2001 Social Security report commissioned by the White House suggest workers divert 4 percent of their earnings, up to $1,000 a year, into private accounts.Wow! According to Yeske, Charles would do much better with that private account. But how did Yeske perform his calculations? Theres no way to tell from Regans report, and the CBS web site offers no information. You have to trust Regans producers—manifest bunglers—to have handled this matter correctly.
Using that formula, we asked financial planner David Yeske to run the numbers and found that Charles, who's a high earner, would come out ahead in a private account. If Charles put $1,000 a year into an index fund for 38 years, based on long-term market trends, his monthly Social Security benefit would be more than double what he would receive under the current program. But Yeske warns most investors don't have the discipline to stay in an index fund for the long haul.
By the way, Regan notes that the White House now suggests letting workers invest 4 percent of their earnings. But uh-oh! When the White Housed went from 2 percent of earnings to 4 percent, the estimated cost for the programs first decade jumped from $1 trillion to the current $2 trillion. Not unlike her buddy Charles, Regan is simply too clueless to know things like that. How can it be that hacks like this rule the roost at our biggest news networks?
VISIT OUR INCOMPARABLE ARCHIVES: Its the law! When network reporters discuss SS, theyre required to find a 20-something to recite this absurd misconception. In December, CBS John Roberts played this same stupid game; see THE DAILY HOWLER, 12/13/04. But then, Aaron Brown had dragged out a know-nothing too; see THE DAILY HOWLER, 12/10/04. This game has been played all over the nets—and despite its troubling liberal bias, CBS shows no sign of stopping.