According to top Republican operative Larry Kudlow, “Stock markets are the best barometer of the health, wealth and security of a nation”
So what did the stock market think of the passing of the Democrats' socialist health care program?
The Dow closed up 44 points.
Wow, the stock market must like socialism, or communism, or fascism!
Yeah, I guess they must, because according to this major study published in finance's most prestigious journal:
The excess return in the stock market is higher under Democratic than Republican presidencies: 9 percent for the value-weighted and 16 percent for the equal-weighted portfolio. The difference comes from higher real stock returns and lower real interest rates, is statistically significant, and is robust in subsamples. The difference in returns is not explained by business-cycle variables related to expected returns, and is not concentrated around election dates. There is no difference in the riskiness of the stock market across presidencies that could justify a risk premium...Using data since 1927, we find that the average excess return of the value weighted CRSP index over the three-month Treasury bill rate has been about 2 percent under Republican and 11 percent under Democratic presidents -- a striking difference of 9 percent per year! This difference is economically and statistically significant.
As for the prescription drug benefit? The prescription drug benefit didn't go through reconciliation. It was passed through the normal order.
Brooks is simply wrong on this.To recap, Brooks argued that reconciliation is being used more frequently, and that past reconciliation bills, like Bush's tax cuts and prescription drug benefit, were significantly bipartisan. Reconciliation is, in fact, being used less frequently, past reconciliation bills like the tax cuts were not significantly bipartisan by any stretch of the imagination, and the prescription drug benefit did not go through reconciliation.
Wow, I wonder if this column would have ever been published in anything like its current form if the New York Times had mandatory careful, thorough fact checking of columns by a well paid, well staffed, large, highly expert force. Of course, I guess that's too expensive for them to do and stay in business (or make their profits as large as possible). But what if it wasn't? Hmmm.
Former executive editor of the New York Times, Howell Raines, writes in a Washington Post op-ed today:
Why has our profession, through its general silence -- or only spasmodic protest -- helped Fox legitimize a style of journalism that is dishonest in its intellectual process, untrustworthy in its conclusions and biased in its gestalt? The standard answer is economics. Some prominent print journalists are now cheering Rupert Murdoch, the head of News Corp. (which owns the Fox network) for his alleged commitment to print, as evidenced by his willingness to lose money on the New York Post and gamble the overall profitability of his company on the survival of the Wall Street Journal...
Under the pretense of correcting a Democratic bias in news reporting, Fox has accomplished something that seemed impossible before Ailes imported to the news studio the tricks he learned in Richard Nixon's campaign think tank: He and his video ferrets have intimidated center-right and center-left journalists into suppressing conclusions -- whether on health-care reform or other issues -- they once would have stated as demonstrably proven by their reporting. I try not to believe that this kid-gloves handling amounts to self-censorship, but it's hard to ignore the evidence. News Corp., with 64,000 employees worldwide, receives the tender treatment accorded a future employer.
Wow, look at that last line. Former New York Times editor Howell Raines appears to believe there's a reasonable case that reporters at the mainstream outlets are, "suppressing conclusions -- whether on health-care reform or other issues -- they once would have stated as demonstrably proven by their reporting.", at least in part because they fear losing their jobs due to inadequate profits, and then needing a job at the highly profitable Fox, which, like the rest of the right wing machine, holds a grudge, intimidates with revenge, and generously rewards loyal cronies.
How would this affect the profit equation, and the relative profit equation?
First, it would make it much more profitable for serious, unbiased (relatively, and the bias that exists is towards the right, with the mainstream media constantly not calling them on their lies and misleading) news organizations to not lay off serious reporters, editors, and related staff (as has been happening en masse), and to, in fact, hire many more – I'm talking about a tax credit of 50 to 80 percent that's refundable (with sensible limitations), something big enough to have a huge impact, not a tiny little effect around the margins.
Second, this tax credit would benefit serious unbiased (relatively) news outlets more than Fox type news outlets. This is because at Fox it's not about serious investigation to find the truth and be accurate. It's much more about selling opinions, disinformation, and outright fabrication. They therefore have a much lower relative expense for research, fact checking, expert help, and serious investigation.
The result then, is that with such a tax credit reporters at serious news outlets would be a lot less fearful of losing their jobs and having to get new ones at Fox, or similar outlets, greatly allaying Raines' fear. I would like to note here that Raines' conjecture is stunning, but he is a former executive editor of the New York Times, so we should think about it seriously.
And, of course, in addition to greatly decreasing any intimidation of reporters by Fox, such a tax credit would address positive externalites that are simply colossal. A tremendous amount of good would come from greatly increased spending on journalistic research, investigation, fact checking, debunking, expert support, etc. For more on this see here.