MediaWatch: March 1992

Vol. Six No. 3

Janet Cooke Award: NBC: News By Kevin Phillips

In these recession-plagued '90s, you would think the boom years of the 1980s might be looked on with a sense of nostalgia. By now, the same critics of a "decade of greed" might be wondering how to repeat the Reagan recovery. But the media's ritual critique of the '80s lives on. For the latest installment in the networks' encouragement of class warfare, NBC earned the March Janet Cooke Award.

On the February 7 Nightly News, Tom Brokaw introduced Keith Morrison's story: "The fact is, for many American families, the economy has been stuck in neutral for more than two decades. In terms of 1990 dollars, the average yearly income for median families has been stalled since the 1970s." NBC aired a graph which read: "1970s, $34,300; 1980s, $33,900; 1990s, $33,350."

Misleading. Lumping median income data into decades obscures both the bad news (the dramatic income decline after Carter's inflationary binge) and the good news (the persistent income growth of the Reagan years). Using constant 1990 dollars, in 1980, the last year of the Carter presidency, median family income fell a record $1,209, the largest one-year decline since World War II. But median family income increased in every year but one from 1982 to 1989, rising a total of 13 percent.

Morrison's '80s fable featured real estate guru Mike Glickman: "He is the image of the '80s, super-entrepreneur, who by the time he was 25 had built a huge and gaudy real estate empire...And he was the prince of laissez-faire who could do no wrong." But Glickman went bankrupt. By selecting him as an example, NBC begs the question: so what happened to the "rich" in the 1980s? Did they get richer or did they fail? In fact, dramatic social mobility in the last ten years, in which about 33 percent of the population rose or fell into other income classes in each year, belies the notion that a certain stratified "rich" are gaining and an immobile "poor" are perpetually losing.

Morrison continued his social gospel: "Oh, there was a party alright, one of the biggest, most avaricious displays of ostentation in a hundred years. But who threw it?" Who did Morrison select to answer his question? Kevin Phillips, professional Reaganomics-basher and the media's favorite "conservative," whose book The Politics of Rich and Poor tops the Democrats' reading list. Said Phillips: "The party in the '80s was thrown for and by people in the top one or two or three percent." Why did Morrison rely on Phillips? He told MediaWatch: "I got the idea for the story after reading Kevin Phillips' book."

Morrison had just been warming up: "The amazing thing is most people seem content to believe that almost everybody had a good time in the '80s, a real shot at the dream. But the fact is, they didn't. Did we wear blinders? Did we think the '80s left behind just the homeless? The fact is that almost nine in ten Americans actually saw their lifestyle decline."

Wrong, wrong, wrong. The Census Bureau's data shows median family income increased in all income classes from 1981 to 1989, usually measured in fifths (or quintiles). By contrast, they fell for nearly every fifth from 1973 to 1981. Morrison told MediaWatch he got the figures from Phillips' book, but he conceded that it didn't measure just the 1980s, but 1973 to 1988.

But Phillips' own book proves Morrison wrong. Appendix C contains a Census table on median family income from 1973 to 1987. In 1973, median family income was $30,820 in constant 1987 dollars. In 1987, it was $30,853, after dipping to a low of $27,591 in 1982. Any reporter who knows math cannot claim that nine of ten Americans lost incomes if median income gained.

Morrison added: "A median income in the '80s? George Hooker earned one, still does in the store he runs." Hooker declared: "You still make the same amount. It's just harder to get by now than it was then. It's just slowly, gradually getting worse." He followed with another soundbite of Phillips: "What you had in the 1980s was the top one percent really making out and opening up a gap, but the average person didn't realize how much of the gap was there yet."

Wrong. Morrison (and Phillips) get their claims from the liberal Congressional Budget Office, which says the income of the top one percent went up 87.3 percent from 1980-90. But CBO refuses to index capital gains income for inflation and excludes capital losses over $3,000, and thus overstates gains and understates losses.

Liberals also ignore the effect of tax changes. In the 1980s, the government simplified the tax code and cut marginal tax rates dramatically. In the 1970s, prohibitive income tax rates (up to 70 percent), inflation, and a myriad of shelters led the rich to hide their income, while the reforms of the 1980s caused the rich to come out into the open and declare more income. So the "rich getting richer" may not simply be an increase in wealth, but an increase in declared wealth.

Morrison suggested that the American people didn't really gain in the '80s, but they didn't hear that gloomy reality in TV ads. Morrison introduced ad executive Paul Donaher: "What you found was, is that a lot of ads were very image-based and not particularly rational. We thought imagery perhaps as well as ostentatiousness was a way to sell a product." Actually, "image-based and not particularly rational" is a good description for network economics reporting.

Morrison concluded: "And of course what they [the advertisers] sold was debt. Here's an eerie echo. Sixty years ago, the Secretary of Commerce wrote about the '20s: 'It was a decade of easy wealth for a few, inadequate income for the majority and a mountain of debt that crushed the economy.' Sound familiar? And if the pattern holds, the '90s will be defined the way the other eras were, a backlash by the middle class against the rich." By coincidence (?), Morrison's conclusion almost exactly echoes the dominant theme of Phillips' book.

When asked by MediaWatch about the tone of his story, Morrison replied: "There are so many different ways of looking at the current economic situation. I think all you can rely on is a range of opinion, and you try to report on a range on opinion." After MediaWatch pointed out that he had no range of opinion in his story, Morrison wryly responded: "I would have, except -- here comes the line that you're going to love -- I wanted to say something with a point of view. I set out to do that. And I think quite reasonably so. I would not for a moment suggest that that should be everybody's point of view, or that that will be the next reporter's point of view."

Morrison explained: "It wasn't even that I was making a case against Reaganomics. It was that -- look at what we have today, isn't it amazing given that we were all so optimistic in the '80s? We're all so pessimistic now. The fact is that in the '80s, we weren't as well off as we thought we were, and maybe now we're a little better off than we think we are."

Morrison sounded congratulatory: "You can go back and tell them `He was out there making a f---ing statement!'" But where are conservatives making a one-sided statement for the Nightly News? Morrison responded: "Now there's a very good point. Maybe we should pursue that. I'll tell you why. I was thinking about that yesterday, when Bush went to see Reagan, you know, get the warning that a lot of people aren't that happy. That seems like a pretty good cue to go into the conservative community and do kind of a non-candidate-related story." We'll be watching and waiting.