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Secretary Paulson in a remake of Rashomon

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Treasury Secretary Paulson made his first speech today. What did he say? Here are some headlines:

Paulson Calls World Economy `Robust,’ U.S. Growth `Strong’ (Bloomberg News [2])

Paulson: US Must Welcome Competition (AP [3])

Paulson Warns on Benefits (Reuters [4])

Evidently, he gave a special speech to the New York Times [5]. The headline at the Times:

Treasury Secretary Sees Inequities in US Economy

Just a little bit different, huh? [6]The Bloomberg and Reuters stories don’t even mention the inequity theme. The AP story mentions it about 80% toward the bottom of the story:

Paulson said his top priorities would be achieving reform of Social
Security and the other benefit programs, advancing the nation’s energy
security, bolstering global trade and addressing the problems of income
inequality between the wealthy and lower-income Americas.

(Aim high, I always say, but this is a little ridiculous. After knocking off social security reform, Medicare reform, securing the nation’s energy supply and encouraging trade—all in the last two years of a lame duck administration, he’s going to tackle income inequality.)

Here’s how the Times’s story opens:

Treasury Secretary Henry M. Paulson Jr. [7], delivering his first public remarks since taking office last month, pledged today to work with Democrats [8]
to revamp Social Security and Medicare, and in a gesture aimed at Bush
administration critics he said he recognized that the economy was not
benefiting all Americans.

“Amid this country’s strong economic expansion, many Americans simply
aren’t feeling the benefits,” Mr. Paulson said in a speech at Columbia
Business School. “Many aren’t seeing significant increases in their
take-home pay. Their increases in wages are being eaten up by high
energy prices and rising health care costs, among others.”

It will be interesting to see how the coverage of the speech evolves over the next 12 hours. Will wire services or other papers change their focus to this "concession?"

I know a lot of people find the Times to be a frustrating source of news and that their reporters are biased toward the left. A simpler theory is that the Times, like any other producer tries to please its customers. The average reader of the New York Times finds the Times’s interpretation of the Paulson speech invigorating. Finally—the Bush administration admits its doing a horrible job for the average American. Left unresolved is what the Bush administration (or its Secretary of the Treasury) might possibly do to change this state of affairs, but the Times has an idea—it comes later down in the story after some discussion of the rest of Paulson’s speech:

Though he spoke of economic inequalities, for example, he did not offer
any hint of lack of enthusiasm for the administration’s record on tax
cuts.

This isn’t as absurd as Krugman’s suggestion of raising the minimum wage [9] as a way of fighting the unfair gains of the top 5%. But it’s close. If the average American isn’t sharing in the growth of the economy, letting the Bush tax cuts expire isn’t going to make any difference.

The whole thing is a charade.

There are a bunch of people out there who believe or at least claim to believe that the average American hasn’t shared in any of the extraordinary growth of the last 25 years. What these people (and the reporters for the New York Times) don’t seem to understand is that if that’s true, then increasing the minimum wage and raising taxes on the rich aren’t going to solve the problem. If you really believe most of the gains of the last 25 or 10 or even 5 years have all gone to the rich, then the system is totally broken. You should be a real socialist. So either they don’t really believe their claims about what’s happening to the average American or they don’t really want to do anything about it anyway. They just want to posture.

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