Good news, after being filtered through the national media, can
become bad news.
The most recent example: A congressionally appointed panel of
economists found that the Consumer Price Index (CPI) overstates
inflation by about one percentage point per year. This means that
entitlement programs, whose budget-busting increases are determined
by the CPI, have grown too much in recent years and that their
growth can be slowed while still providing for recipients based on
their actual costs of living.
Great news, right? Not if you ask ABC and CBS. "We begin tonight
with money," announced ABC's Peter Jennings on the December 5
World News Tonight. "Maybe a little less for you, depending on
who you are, and certainly a little more for Uncle Sam." Reporter
Lisa Stark then explained that "one third of the federal budget is
tied to the CPI, so cutting the official inflation measurement 1.1
percent would lower all government payments based on cost of living,
saving the government a trillion dollars over the next twelve years.
But cutting those payments would affect 60 million Americans,
including seniors who stand to lose an average of $100 a year in
According to Dan Rather, on that same night's CBS Evening
News, "A plan officially proposed in Washington today could
affect the incomes of millions of Americans, especially those older
or at the lower end of the economic scale." Reporter Ray Brady
explained the mechanics of the CPI with an example: "Take the
average Social Security check. It will rise from $724 to $745 a
month in January, but it will rise to just $737, a difference of
eight dollars, if the congressional commission has its way."
Brady ran a soundbite from Margrit Pittman, a Social Security
recipient at a seniors' center, who said, "For many people who come
here, eight dollars a month is a big loss. That may be the only
eight dollars they have to ever go to the movies."
But how can someone "lose" what they never had? And if the
cost-of-living increases in these programs match the actual cost of
living, why would any entitlement recipients have to change their
lifestyles? Neither Stark nor Brady asked.
And none of the networks pointed out how the CPI adjustment
undermines one of their favorite economic stories from early this
year -- wage stagnation. Dan Rather said that "millions of American
workers know it. Despite soaring profits and a record Wall Street,
U.S. businesses are still cutting good jobs and barely raising
wages." CBS' Wyatt Andrews described "an increasingly anxious middle
class, whose dreams of upward mobility have met a downward reality."
ABC's Jeff Greenfield reported on "something very disturbing
behind the record Wall Street numbers and corporate profits." He
interviewed an economist who said, "This surge in financial markets
was really based on an untenable situation of workers taking a real
squeeze in living standards to improve corporate profit margins and
competitive prowess." And NBC's Tom Brokaw announced that 1996 would
be "another long, anxious year for the American middle class."
But according to economics columnist Robert Samuelson, writing in
the December 11 Washington Post, the commission's report
"demolishes the theory that living standards have stagnated."
Samuelson pointed out that the "stagnation theory has always been a
statistical illusion. If your income rises three percent and prices
rise three percent, then you've got no 'real' income gain. But if
inflation has actually risen two percent, then income is up one
percent. This is what's happened."
Declared Samuelson: "No longer should it be possible for some
economists and politicians to contend that average families have
simply run in place in recent decades." Such a contention shouldn't
be possible for journalists, either.