How the Mainstream Media Broke Up With Austerity

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Politico's Mike Allen, with Simpson and Bowles. Photo: Politico

Sometime last year, an odd thing happened to the austerity debate in America: All of a sudden, reporters began asking questions.

For years, much of the U.S. mainstream media has treated the debate about government debt and spending with a bizarre lack of skepticism. And not just op-ed columnists, mind you. Some of the worst offenders were straight news reporters, writing for the news sections of major American media outlets — the kind of just-the-facts-ma'am sticklers who typically take care never to reveal their own views while covering their beats.

Despite their ideological commitment to neutrality, these reporters often borrowed the language of the pro-austerity movement unquestioningly – including warning about an "imminent debt crisis," or approvingly quoting people with skin in the austerity game, like former senator Alan Simpson and Erskine Bowles, without quoting any of their detractors.

But recently, the tide seems to be turning. After the core findings of an influential study by Harvard professors Carmen Reinhart and Ken Rogoff that was used by the pro-austerity camp to prove its case were debunked by a 28-year-old graduate student earlier this month, most media outlets have dedicated space to outlining the other side of the debate. It's not notable that they're doing so; what's notable is that they're only doing it now.

The American austerity debate has two main camps. On one side are pro-austerity deficit hawks, people who are very concerned about the size of America's national debt, and who tend to use hyperbolic phrases like "fiscal Armageddon" and "stealing from our children" to emphasize the need for immediate deficit reduction.

On the other side are economists like Paul Krugman, who believe that the government should increase spending to combat unemployment and grow the economy. These people see the unemployment crisis, not the debt, as the most pressing issue facing the country, and generally think that cutting spending during a recession only results in more pain and slower growth.

Mainstream reporters are supposed to synthesize the views of both sides and write about the debate impartially, like they do with other topics. But for decades, many of them seemed to take the immediate danger of the deficit as an accepted premise for their articles — kind of like pointing out that the sky is blue, or that puppies are cute.

A 2009 Wall Street Journal was typical in this regard. Fiscal policy reporter John D. McKinnon wrote in a news story that the U.S. government's annual deficit had reached "a once-unthinkable level that could threaten any nascent economic recovery by undermining the dollar and driving up interest rates." The use of "could" makes it clear that McKinnon was hedging a bit, but the overall tone of the piece came close to Simpson/Bowles levels of alarm. And it omitted facts inconvenient to its argument, like the fact that the growing national debt had not, at that point, driven up interest rates. (It still hasn't.)

The New York Times also used deficit-spook language in a scolding 2008 story, in which it compared growing deficits to "water rushing over a river’s banks." (Though the paper allowed that deficits were perhaps permitted to rise, briefly, while the economy was in full meltdown.)

It doesn't take much — often, only a sentence or two — to give airtime to both sides of the austerity debate. But often, reporters failed to include even those perfunctory acknowledgments that, yes, another side did exist.

A September 2012 Bloomberg Markets magazine story was the perfect example of how supposedly impartial news coverage could take on the tenor of a committed deficit-scold. Its headline ("Romney or Obama Win Means No Escape From Fiscal Crisis of Debt") and lead paragraph (which claimed, with no outside attribution, that "it’s the government’s turn" to get its fiscal situation in order) set the tone. And the rest of the article was a slavish recitation of pro-austerity talking points that quoted not only Simpson and Bowles, but Carmen Reinhart (of the discredited Reinhart/Rogoff study) and Maya MacGuineas, Alice Rivlin, and David Cote — all dedicated deficit hawks and members of the Fix the Debt coalition. If "Austerity Bingo" were a game, Bloomberg Markets' story would have filled the entire card.

It wasn't always that obvious. Sometimes, the press's love affair with deficit hawks manifested itself in the way reporters approached their subjects, like a buddy-buddy breakfast chat engineered by Politico's Mike Allen that featured Simpson, Bowles, and a few dozen softball questions. The video of that event — which features a number of anti-austerity protesters being escorted from the premises by Politico security — tells you all you need to know about the framing of the debate in 2012. On one side of the line, reporters and austerians; on the other side, angry protesters who don't want their Social Security cut.

The fiscal cliff standoff at the end of 2012 brought the deficit to the front of the national news agenda, and gave politics and economic reporters alike a chance to report on the austerity debate again. Some did so gracefully, but a significant number did not.

The Washington Post's Lori Montgomery, for example, tipped her hand in a series of articles like this one from November 2012 that borrowed the austerity camp's urgent language ("Simply delaying the pain is not an option, economists say") and slippery-slope arguments ("Avoiding hard decisions could have grave consequences, analysts say, potentially undermining the U.S. economic recovery and the world’s confidence in American leadership") without making clear that many "economists" and "analysts" took a different view.

CNBC, the TV home of business elites, started a network-wide "Rise Above" campaign that executives said was inspired by an appearance by Simpson and Bowles. The campaign was designed "to increase the understanding of the core issues and to raise the level of dialogue" about the fiscal situation, but ended up functioning as a ham-handed advertisement for the panicked pleas of the austerity movement.

It's tempting to give reporters a pass for falling under the spell of the austerity camp. After all, "a rising wall of debt is about to crush America!" makes a much better media narrative than "the deficit is shrinking and long-term debt will be brought down mostly by fixing healthcare costs, so we should worry more about unemployment." And organizations like the Peter G. Peterson Foundation and Fix the Debt had spent millions of dollars touting a bipartisan "grand bargain" that had support from both sides of the aisle. But the views of the actual other side — those who didn't believe government should cut spending while the nation was in an unemployment crisis — went largely ignored.

This isn't just between-the-lines media criticism or an obscure academic debate. Debate shapes policy, and the more Americans saw news reports that talk about America's "looming fiscal disaster" or its "debt challenge" (as CNNMoney called its series on the budget debate) as a proven fact, the likelier they were to support that side of the argument. In February of this year, a Pew/USA Today poll showed that 70 percent of respondents believed that passing deficit reduction legislation was the "most important issue on Congress' plate." When President Obama took office in 2009, deficit reduction didn't even rank near the top of the priority list.

But early this year, after a fiscal-cliff deal was struck that did basically nothing to address the long-term debt, the love affair between austerians and the mainstream press began to fall apart. The Times complicated the austerity narrative by pointing out that many of the key backers of groups like Fix the Debt were wealthy businessmen with corporate interests in the outcome. And the Post's Wonkblog (which has always been even-keeled about the debt debate) ran a story about how massive a setback the deficit-hawk movement had experienced.

The final straw in the breakup came earlier this month, when a 28-year-old UMass Amherst grad student named Thomas Herndon found flaws in the seminal Reinhart-Rogoff study, which was used by politicians and pundits alike to justify a push for immediate spending cuts.

Herndon's paper didn't just influence the academic debate over austerity — it changed the media coverage of the debate, too. Within days, Krugman's views on the deficit not being an immediate threat (which were once considered so fringe that Joe Scarborough labeled him a "debt denier") became respectable. Bloomberg ran a story pointing out that interest rates hadn't risen in response to growing debt levels, a common claim made by austerians. Henry Blodget proclaimed, "The argument is over. Paul Krugman has won." And countless TV shows and magazines (including this one) profiled Herndon within the larger context of the austerity debate, finally giving the anti-austerity side a chance to make its case.

Just like a compliant media sped the ascendance of the austerity movement, a newly skeptical media (perhaps prodded by hybrid old-new media publications like Wonkblog) seems to be bringing austerity to its knees. Finance leaders at the G20, reportedly citing the mistakes in the Reinhart-Rogoff study, backed away from the austerity agenda. Within days, it was no longer fashionable to support cutting government spending and reforming entitlements, no matter how many "Harlem Shake" videos Fix the Debt put out.

As if to cement how much the debate has changed, this weekend, Politico — the same Politico that all but carried Simpson and Bowles's briefcases last year — ran a story about the "intellectual shift away from austerity" among high-profile politicians on Capitol Hill. To add insult to injury, that day's "Morning Money," the Politico newsletter that carried the story, was sponsored by the pro-austerity Peter G. Peterson Foundation.