Reform is meant to be hard. After all, things like health care and tax policy are infinitely complex, with overlapping incentives and disincentives created by an intricate web of legislation, regulation and economic behaviors. But it’s been made nearly impossible by a media who seems wedded to the status quo, regardless of the long-term impact.
The reporting following President Donald Trump’s tax plan is the perfect example. There wasn’t a sober analysis of the good-and-bad, the inherent trade-offs of certain choices, or the potential economic impact. Instead, we were treated to glorified editorials that lambasted President Trump’s plan as a giveaway to the wealthy, even going so far as to point out that it would “richly benefit Mr. Trump” personally.
Holman Jenkins, Jr., writing for the Wall Street Journal, show how ludicrous it all was:
“Trump’s Plan Shifts Trillions to Wealthiest,” went the New York Times headline.
Shifts? The plan doesn’t raise taxes on anybody, except the affluent and businesses by ending certain deductions, and does so partly to pay for lower rates for the affluent and businesses. There is no taking from the poor to give to the rich. Our income tax is almost exclusively a tax of the affluent and business. Working-class Americans are taxed through payroll taxes, which fall far short, even so, of covering their expected future benefits.
Perhaps more telling is that when discussing the White House’s tax plan, the media suddenly decides that the deficit is worth caring about. Never mind that they reported glowingly about President Obama’s profligate ways for the entirety of his presidency. Apparently, there is some magic in the government spending money, rather than letting Americans keep it, that makes the deficit less important.
But, as economic Tyler Cowen writes, the reality is exactly opposite:
The simplest way to think of an unfunded corporate tax cut is that the federal government has to borrow more money, say at rates in the range of 1 percent to 2 percent, while corporations have more money to invest. Estimates vary for the rate of return on private capital, but 5 percent to 10 percent is one plausible estimate. So in essence, society is borrowing money at 1 to 2 percent and may be receiving 5 to 10 percent in return. That is a net gain, not an economic cost.
Of course, pointing out the media’s logical backflips in order to fit the prevailing narrative, is akin to pointing out the idea that water is wet. We discovered that some time ago and don’t necessarily need more evidence to support the case. But the tragedy in their hypocrisy is that it makes it impossible to change.
Any budget cuts—no matter how small—are accompanied by sob stories and fear mongering, as if there is nary a dollar misspent by our bloated bureaucracy. As one New York Times’ writer said of Trump’s budget, “Reading through the Trump budget, I feel as the Romans must have felt in 456 AD as the barbarians conquered and ushered in the dark ages.” Any reforms to entitlement systems are discussed in terms of forcing the elderly to eat cat food or throwing granny off a cliff . And yet there is little to no reporting on what happens when Medicare or Social Security’s trust fund runs dry, which they are scheduled to do within the next two decades.
And heaven forbid any reductions or reforms in taxes, which can only be viewed through the lens of whether the wealthy will pay more or less. In case you needed a cheat sheet, more is good, less is bad, for reasons that nobody is exactly clear on other than it seems to feel right. What the media doesn’t tell you is that it’s nearly impossible to do tax reform that doesn’t favor the wealthy, because the top 20 percent of earns pay about 84 percent of income taxes. And when President Trump does try to reduce taxes for workers, by cutting the corporate tax, it’s somehow framed as a giveaway to executives, which, according to the economic evidence, is simply not true.
So in the end we exchange a potentially more prosperous future for what? A more “exciting” news cycle? Policymaking is plenty hard enough with facts. Unfortunately, those are rarely what drive the media narrative.