NWA Times shooting the messenger – Updated

This is rich. NWA Times attacks “liberal bloggers” for quoting their own report. Last week, Arkansas Media Watch pointed out a Northwest Arkansas Times report (copy of cutout below the fold) according to which Senator Mark Pryor had made the wrong and insulting statement:

Pryor said various tax breaks have created a system in which 45 percent of Americans don’t pay taxes. “It’s hard to have a fair tax system where only about half the people are paying,” he said.

This blog pointed out that most Americans do pay taxes (payroll taxes, gas and sales taxes etc.), even those too poor to pay federal income taxes. The issue of wrong or misleading statements about tax fairness has been in the air lately. Pryor’s Senate colleague John Boozman is on record with a similar wrong statement: “51 percent of the public don’t pay any federal taxes”. A recent, well researched New York Times editorial pointed out the fallacy in these claims.

Arkansas Media Watch has not only criticized the two Senators for making inaccurate statements, but also the local media for letting them get away with inaccurate statements. Pryor’s office has now maintained that Pryor was misquoted. Arkansas Media Watch has contacted NWA Times (editors Greg Harton and Lisa Thompson and publisher Rusty Turner) twice (on August 24 and 29) and requested clarification. No response.

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Pryor on taxes

UPDATE, April 17, 2012: While Senator Pryor’s office in the below statement claims that Pryor is concerned about millionaires not paying their fair share in taxes (“It is maddening that hundreds of millionaires pay virtually no federal income taxes, and this should change”), Pryor recently joined Senate Republicans in voting down President Obama’s proposal for a minimum tax on income millionaires (the “Buffett rule”). What does Pryor really stand for? A fairer tax system, or tax privileges for the super rich? His actions unambiguously point to the second.

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Michael Teague from the office of Senator Pryor emailed Arkansas Media Watch a clarification regarding Pryor’s remarks about tax fairness. Full text below the fold. It is essentially the same account as recently given by John Brummett: Pryor allegedly was misquoted.

AMW has asked NWA Times editor Greg Harton and journalist Larry Henry for confirmation what Pryor actually said and they have not responded. This is not reassuring. The newspaper pretends to have a policy of correcting any factual mistakes. So far this hasn’t happened. Let’s hope that the newspaper takes the incident seriously and is more careful in its future reporting.

On the other hand, Pryor’s clarification still raises some issues. Pryor expresses concern “that 1,470 taxpayers who earned $1 million or more paid no federal income taxes in 2009″. But a statement like “It’s hard to have a fair tax system where only about half the people are paying”, assuming it is meant to only refer to the federal income tax, seems to imply that more of the working poor and the elderly should be paying income taxes. Or does Pryor think half the people are millionaires? When you care about tax fairness, why would you single out just one component of the tax system? Why discuss only “the inequities in the federal income tax system, [as opposed to] city, state or even sales or excise taxes” – not to mention federal payroll taxes?

The full statement from Mark Pryor’s office below the fold:

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Senator Pryor insults half his constituents

Northwest Arkansas Times today reports on remarks made by Arkansas Senator Mark Pryor at a Rogers Rotary Club luncheon (article cutout below the fold):

Pryor said various tax breaks have created a system in which 45 percent of Americans don’t pay taxes. “It’s hard to have a fair tax system where only about half the people are paying,” he said.

This is a whopper. After Pryor’s colleague Boozman wrongly declared half Americans don’t pay federal taxes, the nominally Democratic Senator found a way to frame himself as even more politically extreme by claiming that half Americans don’t pay any taxes, which is of course completely false and an insult to a significant portion of Pryor’s voters and constituents. With political leaders like Boozman and Pryor, who either don’t have the slightest clue about how the tax system works (which consists of income taxes, payroll taxes, sales taxes, gas taxes, etc. etc.) or are deliberately lying, prospects for any economic recovery in the United States are all but non-existent and a double-dip recession, if not depression, is looming on the horizon. One has to conclude that the leaders Americans have elected to help solve their problems live in a fantasy world completely disconnected from the reality ordinary (and tax-paying) people experience day by day.

The NWA Times reporter, Larry Henry, has nothing to say to correct Pryor’s wildly inaccurate statements. Unfortunately we don’t have a mass media in this country any more that has the integrity and courage to challenge politicians on their lies, hold them accountable, and act as a corrective and a check on their power. This is maybe the really scary part of it because in a functioning democracy with a media system that does its job, Washington insiders like Boozman and Pryor would be in trouble.

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Senator Boozman insults half his constituents

Arkansas Senator John Boozman appeared yesterday on KUAF’s Ozarks At Large show discussing taxes and the budget with Talk Business producer Roby Brock (the Boozman segment starts around 7:45). At one point he declares that he would reject any tax increase on the rich even if every dollar in new taxes were “offset” by 10 dollars in spending cuts. Nothing surprising there. Boozman also claims that the tax burden on US businesses is “second only to Japan” in the world (not true but Boozman does mention the issue of tax loopholes), that “the majority” (50-60%) of those filing in the highest federal tax bracket are small business owners (false), and that US federal spending “historically” has been around 19% of GDP (Reagan spent between 21.2% and 23.5%).

By far the most brazen distortion out of the Senator’s mouth comes in response to a question about taxing billionaires, at 10:15 in the podcast:

“51 percent of the public don’t pay any federal taxes right now.”

This of course is not true. Boozman meant to say that half the public don’t pay federal income taxes. This would still be highly misleading. The federal income tax is by design a progressive tax which mostly falls on earners of mid and high incomes, based on the principle that everybody should contribute according to their means. But all working people in America pay significant amounts in federal payroll taxes (which fund Social Security and Medicare), federal gas taxes (which fund interstate highway construction and maintenance), and others including state and local sales and income taxes. Most of these taxes disproportionately burden low income workers. For example, incomes above about $106,800 are exempt from payroll taxes! As a result, as documented in an earlier post, the US tax system taken as a whole is not progressive at all: the rich pay about the same overall tax rate as the poor.

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ADG again ridiculing Reagan deficit spending

Arkansas Democrat Gazette editors are really picking on poor old Reagan. Today, their editorial opens with a quote attributed to physicist Richard Feynman:

“There are 10^11 stars in the galaxy. That used to be a huge number. But it’s only a hundred billion. It’s less than the national deficit! We used to call them astronomical numbers. Now we should call them economical numbers.”

The quote can be found on numerous internet sites but none of them seem to give a precise source. Wikipedia classifies the quote as unsourced and doesn’t allow it to be attributed without authentication. Assuming it is authentic, however, it can be deduced what Feynman was actually referring to: namely, you guessed it, Reagan deficit spending. Reagan was the first and only president during Feynman’s lifetime (1918-1988) to exceed the 100 billion dollar national deficit mark, and the first and only to exceed the trillion dollar debt mark. Not that you’d know it from reading Arkansas Democrat-Gazette editorials.
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Arkansas Democrat Gazette editors make fun of Ronald Reagan

Today’s Arkansas Democrat Gazette editorial is a lighthearted satire on Reagan deficit spending. It opens with the following quote from Saint Reagan himself:

“Governments don’t reduce deficits by raising taxes on the people; governments reduce deficits by controlling spending and stimulating new wealth.”

Excellent joke – I never thought Paul Greenberg had a sense of humor. Reagan of course never balanced a budget, on the contrary he was responsible for record deficits as high as 6% of GDP, almost tripling the national debt. Neither did he control spending – he presided over a 69% increase in federal spending, much of which went to the military. He raised taxes on the people no fewer than 10 times during his tenure, including a massive tax hike in 1982 in the middle of a recession. No question, Reagan knew what he was talking about. He’s exactly the right person to ask for advice about balancing the federal budget precisely because he never managed to balance his budget, just as in our little Arkansas media world, ADG columnist Bradley Gitz is the right person to lecture Obama on economics precisely because he declared bankruptcy a few years ago. Yes, bankrupt deficit spenders are the fiscal experts of the hour. We need to hear more of their advice!

Oh wait, What are you saying?
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Arkansas Democrat-Gazette playing politics on front page

ADG opened today with the following front page headline:

Still no give in debt impasse
As deadline nears, 2 sides remain dug in

This followed a very similar headline just two days ago:

Neither side blinks in debt showdown

This is nonsense. There is one (1) side that is dug in, and that’s the Republicans. They have declared that they won’t vote for any raise in revenues (fn1) no matter what. As ADG reported on Tuesday:

“House Speaker John Boehner stood firm in opposition to higher taxes. (…) Said House Majority Leader Eric Cantor: “We are not going to raise taxes. That’s all. (fn2)
Obama called on Republican leaders to show flexibility, saying he has “bent over backwards” to accommodate them in deficit talks. “I’m prepared to take on significant heat from my party to get something done, and I expect the other side should be willing to do the same thing if they mean what they say”, Obama said.

Obama has already offered wide-ranging budget concessions, including Social Security and Medicare cuts. The ADG storyline of “2 sides” unwilling to compromise is simply inconsistent with the facts.

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ADG’s Bradley Gitz reinvents US economic history

Sunday’s Arkansas Democrat Gazette featured a column by Bradley R. Gitz titled “Obama’s economics” . The article is really an exercise in “how many mistakes can you make in so many paragraphs”. The column contains so many demonstrable factual errors, even this cynic is mildly surprised by the ADG’s lack of editorial oversight. How many times can the ADG opinion editors afford to be caught red-handedly lying without causing embarrassment?

Gitz is a regular ADG columnist whose right-wing extremist views are well known. I won’t waste time examining these views. I continue to believe that the Gitzes of the world are entitled to their opinions but not to making up their own facts. We’ll consider his factual statements only. How many mistakes can you catch in just the following paragraph?

“As Milton Wolf notes in a perceptive column for the Washington Times, when Ronald Reagan assumed the presidency in 1981 the nation was experiencing an especially severe recession featuring double-digit inflation and double-digit unemployment. Reagan’s response was to implement a recovery program consisting of tax, spending and regulatory cuts coupled with a strong dollar monetary policy. Recovery came quickly enough for him to win 49 states in 1984, by which time the country had also embarked upon what would become two decades of virtually uninterrupted economic growth and wealth creation.
Barack Obama came to office facing comparably difficult economic circumstances.”

Here are the main factual inaccuracies in that single paragraph (scroll down for charts on unemployment, debt and deficits):

1. In 1980/81, as Reagan took over the presidency from Jimmy Carter, the nation did not experience a severe recession and unemployment was not in the double digits.

2. In fact, a severe recession started after Reagan had taken office. “The early 1980s recession was a severe recession in the United States which began in July 1981 and ended in November 1982. The primary cause of the recession was a contractionary monetary policy established by the Federal Reserve System to control high inflation” (in other words, what caused the recession was precisely the strong dollar monetary policy that Gitz praises.) (wikipedia)

3. Unemployment had been 6% in 1978 and 1979 and was below 8% in 1980 (Carter presidency). It shot up to almost 10% during the early Reagan years (1982 and 1983), which is higher than it has been at the height of the current crisis. It started declining in 1984.

4. The “two decades of virtually uninterrupted economic growth and wealth creation” were in fact interrupted by the 1981/82 recession (Reagan), the 1990/91 recession (George H. W. Bush), and the 2001 recession (George W. Bush), to be followed by the Great Recession that started in 2007 (again under George W. Bush’s presidency). Only the Clinton-years from 1993 to 2000 were recession-free.
UPDATE: Paul Krugman weighs in with a chart showing GDP long term growth rates. Reaganite growth rates were anything but miraculous. See also Richard S. Grossman debunking similar claims made in the Wall Street Journal.

5. Reagan did not cut federal spending, at least not in the aggregate. The federal budget continued increasing under his watch, mainly due to massive increases in the military budget. In total, Reagan presided over a 69% spending increase. Federal spending as a share of GDP reached an unprecedented 23.5% in 1983.

6. Reagan did enact tax cuts but also tax increases. He started with a major tax cut in 1981 (The Economic Recovery Tax Act) but this was followed by a series of no less than ten (10) tax hikes, beginning in 1982 (during the recession) with the Tax Equity and Fiscal Responsibility Act, which collectively took half of the 1981 tax cut back (source).

7. Reagan never managed to balance the budget. His tax cuts and military spending were deficit financed. All of Reagan’s deficits were higher than all of Carter’s and all but one of Clinton’s. On average, Reagan’s deficits were 4.3% of GDP, compared to Carter’s 2.4% and Clinton’s 0.1%. The federal deficit reached an unprecedented 6% of GDP in 1983. In the words of Dick Cheney, Reagan “proved deficits don’t matter”.

8. In consequence, the federal debt almost tripled under Reagan’s watch, from about $1 trillion to $2.85 trillion (not adjusted for inflation).

9. Obama came to office inheriting from his predecessor the worst recession since the 1930s, triggered by a global financial crisis worse than anything seen in 80 years. Recall that the recession officially lasted from late 2007 to mid 2009, while Obama took office in January 2009. Reagan did not face a recession at all, let alone a crisis comparable to the Great Recession, when he took office in 1981. In fact, the main difficulty he faced was high inflation, which he brought under control at the price of a recession. Obama, in contrast, faced deflation. Does Gitz even know the difference?

In other words, you can’t possibly go wrong when you rely on Professor Bradley R. Gitz (PhD University of Illinois, “William Jefferson Clinton Professor of International Politics” at Lyon College), as long as you take the exact opposite of his claims to be true. Let’s point out the obvious. If any of us regular folks who actually work for a living, instead of being employed by a right-wing propaganda machine, managed to make so many mistakes in so short a time, we would be fired in an instant. Is there any kind of accountability at the Arkansas Democrat Gazette? Nope. None at all.

Update: Gitz’s Bankruptcy filing


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Charts

Unemployment Rates (for monthly rates, check the BLS)
The chart indicates Republican vs. Democratic presidencies by red/blue shading. Try looking for “double digit unemployment” during the Carter years (1977-1980). You’ll actually find it in 1982/83.

US Unemployment Rates

Federal Receipts, Outlays, and Deficits
Try looking for Reagan’s “spending cuts” – the orange line goes steadily up. Recessions are indicated by shading. Notice that only the Clinton years were uninterrupted by any recessions.

Federal Receipts, Outlays, and Deficits

UPDATE: Federal Spending as % of GDP
Due to military spending, the federal government was bigger under Reagan than under both Carter and Clinton. More precisely, the average of federal spending as share of GDP was 22.3% for Reagan compared to 21.2% for Carter, 21.9% for Bush I, and 19.4% for Clinton.

US Federal Spending

Gross Federal Debt
How did Reagan (as well as both Bushes) pay for tax cuts? Easy – by raising the national debt.

US Federal Debt by President

Womack confesses ignorance about the Ryan Medicare plan

The Arkansas Democrat Gazette today reported on Steve Womack’s ignorance about the Ryan budget plan. It’s worthwhile reading some excerpts:

Womack challenges Democrats for its Medicare plan

Rep. Steve Womack, criticized Sen. Mark Pryor on Tuesday for “lashing out” at a Republican plan to privatize Medicare. (…) The Republican said Democrats have no plan to save Medicare, which the nonpartisan Congressional Budget Office projects to be insolvent as early as 2020. (…)

The Democratic Senator [Mark Pryor] was quoted in Tuesday’s Democrat-Gazette saying if the Ryan plan were passed into law, the elderly would pay for about 68 percent of their health care costs, up from the about 25 percent they currently pay. (…) “It greatly, greatly shifts the burden of paying for your health care to you and takes away the Medicare system,” Pryor said. “Shifting the cost to seniors is not the answer, it’s not the solution.”

“I don’t know where he’s getting those numbers”, Womack said after Tuesday’s Bella Vista town hall-style meeting. “Pryor said he can’t support our plan. Well, where’s his plan?”
Womack said he didn’t know if the numbers cited by Pryor are accurate.

Yep, Womack says we should support his “plan” but he doesn’t even know whether it’s true that it would shift 68% of health care costs on the elderly (in other words, it would ruin and/or deny health care to millions of retired persons, most of whom could never afford to pay for two thirds of their health expenses out of pocket). If he really doesn’t know, he must have lived under a rock for the past couple months because the 68% figure has been widely reported. If Womack really doesn’t know where Pryor got his numbers, he must be ignorant, incompetent, and not doing his job, and a cynical hypocrite on top of all that. The numbers are, of course, the result of an analysis by the non-partisan Congressional Budget Office (CBO), as anybody who has paid any attention to this issue would know.

This of course raises the question whether the journalist (Bill Bowden) knows these facts. He certainly should, and if he doesn’t, he should have asked Pryor where he got his numbers. One would think that it was the journalist’s duty to provide the crucial information (where the numbers came from and how credible they are) to readers. But he doesn’t. Instead, the journalist leaves readers with the impression that this is all say-so and nobody really knows. It’s another sad case of “he said/she said” journalism: Democrat claims 2+2=4, Republican either denies it outright or counters that he has no idea where D got those numbers from, and newspaper titles “Views differ over the result of 2+2″. In this case, just look at the headline the ADG came up with: Instead of “Womack confesses ignorance”, it is “Womack challenges Democrats”.

The article further down attempts a summary of the Ryan budget plan. It states that

“it wouldn’t balance the government’s books until 2040, in part because it also would cut corporate and individual tax rates.”

Ok but can you be a bit more specific? By how much does Ryan propose to cut tax rates, and who would benefit? Ryan is specific about that and so should the newspaper: the top tax rates would be cut from 35% to 25%, massively benefiting the rich and the super-rich.

Does the ADG think its readers can’t handle the truth?