Are World Financial Markets Talking to the NYT?

November 23, 2012

If they are, the paper should charge more for its subscriptions. Come on folks, a sentence that tells readers:

“once the target numbers are settled, negotiators would have to come up with a down payment on deficit reduction to show the world’s financial markets that Washington is serious.”

has no place in a serious newspaper. Someone obviously told the NYT reporter that it was necessary to have a “down payment” to convince world financial markets that “Washington is serious.” The NYT did not get this tidbit from the financial markets themselves. We want names; who said this? How often has this person (persons) been completely wrong in their assessment of the economy over the last 5 years?

In the same vein, can we leave the philosophical discussions out of the budget reporting, as when the NYT tells us:

“arguments over the fallback [the default budget provisions if a second round of negotiations scheduled for 2013 fails to reach an agreement] reflect a philosophical divide.”

Where does philosophy fit into this picture? We are talking budget negotiating strategies by politicians. Are we next going to hear that this involves competing recipes for preparing duck?

The piece also makes two major substantive errors. It reports on a plan to phase out the lower tax brackets for high income people, the article quotes “one aide familiar with the idea” as saying:

“It would not impact the top marginal rate, and no one would have an effective rate over 35 percent.”

Actually, some people would face a marginal tax rate above 35 percent as the phase out of the lower tax rates would push the effective rate in the zone of the phase out above 35 percent. Of course, very wealthy people whose income pushed them above the phase out zone would only see a marginal tax rate of 35 percent.

Finally, the piece begins by saying:

“Congressional negotiators, trying to avert a fiscal crisis in January…”

Congressional negotiators are not worried about a fiscal crisis in January. They are worried about an economic downturn that would result if a deal is not reached to prevent scheduled tax increases and spending cuts from taking effect. There is no fiscal crisis in this picture.

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