By Arthur Alpert
Pity the poor politicians who edit the Albuquerque Journal.
It won’t be easy adjusting the narrative to fit the oligarchy’s new strategy, but soon they’ll do just that.
The newspaper’s narrative (or line or editorial agenda) matters because at the Journal, it dictates what gets published – syndicated opinion, Op Ed opinion and “news.” Or not.
Their problem lies with the “deficit crisis” and “austerity.” The latter is a fancy word for cutting government spending, mostly on services. It’s been the oligarchy’s answer to the heavy debt levels bestowed by the financial sector collapse of 2008.
Of course, austerity punishes the victims, not the perpetrators, but that’s not why there’s change afoot.
It doesn’t work.
Austerity has slowed the economies that sipped the hemlock, like the U.S. and it’s killing the chug-a-luggers.
Now, belatedly, the financial Establishment is noticing; the manager of PIMCO, the world’s top bond firm; President Jose Manuel Barroso of the European Commission; Blackrock, the influential investment bank and Martin Wolf, finance commentator for the Financial Times, have all decried austerity recently.
And the Wall Street Journal, whose reporters write stories the editorial page hates, has noticed.
Friday, April 26, the WSJ had three “austerity” stories.
The Page One account ran under this rubric:
On page 16, next to the cover story jump, WSJ editors ran “Europe’s Unemployment Problems Worsen”.
And on page 13, the WSJ reported Germany Chancellor Angela Merkel’s (surprising) suggestion some European countries need lower interest rates, liquidity, akin to the cheap money the Fed has injected here, over protests from the American Right.
Yes, austerity’s failure is big news and if you are a Journal politician-cum-editor, it gets worse – core elements of that very American Right are defecting.
Even the American Enterprise Institute!
AEI, whose experts include John Bolton, Lynne Cheney, Newt Gingrich, Paul Wolfowitz and Richard Perle, just published (April 24) Establishment economist John H. Makin’s “Austerity Undone”.
Here’s his précis:
“The US is on a sustainable fiscal path. Congress should focus on long-term tax and entitlement reform rather than short-term fiscal reform. And fiscal austerity in Europe — especially in southern Europe — remains too severe.”
Ignore the plutocratic mantra of “tax and entitlement reform.” What’s novel is his message – enough deficit reduction, please. And statements like these:
“As Europe proves, severe austerity can slow growth or lead to recession.”
The infamous Reinhart-Rogoff claim that big national indebtedness vs. GNP slows growth is “seriously flawed.”
“ US inflation is slowing and bond yields are falling, notwithstanding warnings….”
“American fiscal austerity has been moderate and probably, at the current pace of deficit reduction of about $300 billion per year over the next half decade, has proceeded far enough for now.”
Please re-read that last, where Makin characterizes our national policy thusly:
“American fiscal austerity has been moderate.”
Funny, but that’s not what the Journal has reported or opined. The Journal’s narrative has the Administration spending too much.
Funnier still, Makin is channeling Paul Krugman!
More on wild-eyed leftist Krugman below, but first here’s the journalistic point:
There’s been a near-total eclipse at the Journal of Makin’s subject matter, little real, complex economic theory and practice and minimal analysis of where politics and economics intersect.
Has the Journal ever noted that the major parties agree on the principle of deficit reduction, ever asked if that was wise or wondered (as I do) if what they share isn’t evidence that somebody’s behind a curtain pulling strings?
Not that I remember. No surprise; there’s nothing in the Journal narrative about Corporate America’s power over the parties.
No, the daily has done little but beat the drums for doomsday deficit scenarios in its “news” columns.
Beat the same drums in its editorials.
And lined up syndicated (and some local) columnists to beat the same tired drums in the opinion pages.
Finally, leaving no doubt it’s driven by a political agenda, our daily has never published a well-organized, full-throated counter-narrative to what the song of the drums.
Not a single major essay, I mean, hypothesizing that cutting deficits in a Lesser Depression is economic malpractice and that investing (taking on greater debt short-term) should revive the patient.
A column, that is, along the lines of Paul Krugman’s “refresher” on spending cuts in the Monday, April 29 N.Y. Times, which opens with the news that European hardliners are, at last, questioning “premature fiscal austerity.”
Krugman’s column is a double reminder. First, that while many American economists and even some business organizations agree we him (invest in jobs and the economy now, cut deficits later), the Journal won’t allow that thesis to besmirch its pages, except for a few letters.
Secondly, with the Europeans and even AEI edging away from austerity, the paper’s politician/editors soon will have to squirm into a new editorial stance to conform with the changing oligarchic wisdom.
It will be fun to watch.