CyberAlert -- 06/03/1997 -- Re-writing Reaganomics

Re-writing Reaganomics; FNC Beats MSNBC

1. Reporters claim that Reaganomics reduced tax revenue as the cuts benefited the rich. Facts show otherwise.
2. The Fox News Channel beats MSNBC, but the ratings for both are puny compared to ABC, CBS, CNN and NBC.

1) Reporters continue to re-write the history of the 1980s to match the liberal view that Reaganomics made the rich richer and the poor poorer as tax cuts combined with defense hikes to make the deficit soar.

Here are two examples and how they measure up to the facts.

-- Back on the May 4 Sunday Journal on C-SPAN, MRC analyst Jim Forbes noted, Washington Post reporter John Yang used flawed assumptions about the '80s to discredit the tax cuts in the current balanced budget plan. Yang asserted:

"The way these tax cuts are structured, many Democrats fear that they will explode, the costs will sort of explode in the second five years and that we're getting ourselves into the same situation we got into with the 1981 tax cuts....I think there's concern that we're getting into a situation where we're going to have to pay for these tax cuts over the second five years from 2002 out, and that's gonna cramp the government, have even less money for spending and less money for programs."

Reality Check 1: As documented by the Heritage Foundation's Daniel Mitchell in the foundation's Issues '96 book, "Tax revenues expanded from $599 billion in 1981 to $991 billion in 1989. Even after adjusting for inflation, revenues grew by 20 percent."

Reality Check 2: As explained by Jim Glassman in a May 20 Washington Post column on the balanced budget plan: "The Treasury was expected to collect $1.5 trillion from citizens and businesses in 1997. According to the new bipartisan budget, that figure will rise to $1.9 trillion in 2002. Meanwhile, spending will rise from $1.6 trillion to $1.9 trillion. And there you have it: a balanced budget."

How exactly does that "cramp" the government? It really cramps taxpayers.

-- In a May 22 USA Today profile of Congressman Richard Gephardt, reporters Jill Lawrence and William Welch scolded him for voting for the 1981 tax cut plan.

Lawrence and Welch declared as fact: "He voted for the 1981 Reagan tax cuts that were a windfall for wealthy Americans."

A few paragraphs later the disinformation duo repeated Yang's false assertion: "'This all started, in my view, back in 1981,' Gephardt said. He didn't mention that he had voted that year in favor of the deep Reagan tax cuts that fed the federal budget deficit."

Reality Check: As cited in the December 1991 MediaWatch, IRS figures showed that "the share of income tax collections paid by the top one percent of taxpayers grew from 18 percent in 1981 to more than 27 percent in 1988." The share paid by the top ten percent also rose as the percent paid by those earning less than $30,000 fell.

2) Though it's available in fewer homes, the Fox News Channel (FNC) is capturing more viewers than MSNBC. But the audience for both of the new cable offerings is minuscule compared to CNN and the broadcast networks.

Relaying "some bootleg rating figures from Nielsen for the month of April," Washington Post TV columnist John Carmody reported May 19:

-- "MSNBC...has grown to a distribution base of some 33.8 million cable homes. Yet its 24 hour average audience during April was just 21,000 cable homes -- or a rating of 0.06. And in prime time last month, the audience increased -- to only 29,000 cable homes (a 0.09 average).

-- "The Fox News Channel...had risen to a 20.2 million home subscriber base by April...FNC, despite lagging in total homes, surpassed MSNBC in 24-hour Mondays-Sundays count with a 22,000 home average (a 0.11 rating) and in prime time with a 33,000-home count (0.16) Mondays to Sundays 8-11pm."

On the bright side, this provides ammunition to bolster Fox. Its "We report. You decide" approach is offering a news product more appealing than MSNBC's which often is just more of the same liberal take provided by NBC.

On the other hand, the audience for both channels nationwide is smaller than that captured by any one radio talk show in any one major market.

By comparison, Carmody noted, "CNN, with a universe of 71.1 million homes, averages about 577,000 homes in prime time." And if you ever wondered why my tracking of scandal coverage concentrates on the broadcast networks, they each attract 9 to 12 million viewers for their evening newscasts, or about 32.7 million total viewers.

Doing a rough calculation to make an accurate cable vs. broadcast comparison (there are about 2.77 persons per TV household), MSNBC's 29,000 evening home average translates to about 80,000 viewers. For CNN, I get about 1.6 million viewers in the evening. (I'm no Nielsen statistician, so I emphasize that these are rough calculations. If anything, I'm overestimating the number of cable viewers.)

For every one evening MSNBC viewer there are:
> 20 people watching CNN
> 149 people watching ABC's World News Tonight
> 409 people in total watching World News Tonight, CBS Evening News or NBC Nightly News.

For every one person watching CNN at night there are:
> 7.5 people watching World News Tonight
> More than 20 people watching the ABC, CBS and NBC evening newscasts.

The irony is that the more diverse the media grow and the more the broadcast networks lose viewers, in a certain sense, the more influential the networks become. Even if ABC, CBS and NBC reach fewer viewers, they still are seen by more people than any new network. They provide the best way for advertisers to reach a wide cross-section of America in one hit. Which is why prime time network advertising revenue grows each year even as audience size declines.

-- Brent Baker