Friday, December 31, 2010

My best wishes to all of you in 2011.  May you enjoy good health, prosperity, happy tidings and serene contentment.

Two stories that were played next to each other recently on the front page of The Wall Street Journal serve to illustrate the news media’s schizophrenic reportage on the economy.  On the one hand, there was this chirpy report on employment: “Job Offers Rising as Economy Warms Up”.  Never mind that some estimates put current joblessness at nearly 20%  – more than twice as high as the official figure – or that the statistics behind the headline were squishier than a mermaid’s bath sponge. But there was also this story, providing a very different picture of a U.S. economy that is likely to be burdened for years by the overly generous pension benefits promised to city employees across the nation: “Pensions Push Taxes Higher”. The bland headline dosen't begin to convey the seriousness of the problem.  Some acute examples from Pennsylvania, New York and Illinois were cited in the article.  In Upper Moreland, PA, for instance, annual pension contributions have risen from around $100,000 in 2005 to an estimated $1.1 million in 2011. Spread over a population of just 26,000, that’s quite a hit on taxpayers.  Like countless other municipalities, Upper Moreland had assumed that the juicy investment returns of just five years ago would continue indefinitely, lulling the town into underfunding pensions at a time when they should have been stepping up contributions. If the Journal and other national newspapers seem not to be making an honest effort to put good news and bad news in proper perspective, it is mainly for two reasons. The first is that the need to sell advertising ultimately trumps the need to report the news honestly. We have reams of evidence to support this assertion, having come from a background in journalism ourselves.  In the 1990-91 recession, a reporter friend who had won