Small Business

Reporting Lies

Date: July 17, 2009
Author: Bob Griendling
Categories: Media Criticism, Small Business, Taxes, Washington Post

"People have been allowed to get away with . . . making statements that they knew weren’t factual….Washington games are still being played with the truth."

–Robert Gibbs, White House Press Secretary

Politicians and political advocates (or adversaries) will speak lies.  Often, it’s not just bending the truth to fit an agenda, but flat out making things up.  That, alas, we’ve come to expect.

But what responsibility do journalists have when they know someone is misstating the facts?  I think they need to – at the very least – challenge liars or even folks who unintentionally state the wrong facts. 

We see a prime example of that with The Washington Post’s Mike Shear and Virginia Republican Congressman Eric Canto.  Shear is a good reporter, and I don’t think he has a bias, at least not one that regularly comes through in his reporting.  But I can’t understand why he – and he is not alone on this; he’s just a recent example –allows Cantor to make a knowingly false statement in a story last Sunday.

"Remember the promises? They promised you that if you paid for their stimulus, jobs would be created immediately," Cantor said. "In fact, they said that unemployment would stay under 8 percent. Yet just months later, they are telling us to brace for unemployment to climb over 10 percent. They promised jobs created. Now they scramble to find a way to play games with government numbers by claiming jobs saved."

When I read this, I knew Cantor was not truthful.  The administration hadn’t said it would stay below 8 percent; it was 8.5 percent.  Is that a relatively small difference?  You be the judge.  But it was clearly inaccurate and Shear knew it. 

Why do I know he knew it?  Here is Shear writing today.

Obama’s team had predicted that the stimulus package would keep unemployment to a peak of about 8.5 percent, but the rate soared to 9.5 percent last month….

If Shear know Cantor was misstating the fact, why did he use the lie in his Sunday story?

I have objections to journalists reporting some positions that are not clearly defensible.  One is the myth that “small businesses” create most of the jobs in this country.  The other myth is that higher tax rates on incomes of more than $250,000 impact small business people the most because their profits are  reported to the IRS on their individual tax returns, when in fact less that two percent of small business owners make over $250,000. Moreover, of the 600,000+ small business making over $250,000 (which includes companies as large as 500 employees) many of them are sole proprietorships that have no employees (lawyers, accountants, consultants, etc.); hence a greater tax on them doesn’t cost jobs.

But when a politician misstates a fact of who said what when, the role of a reporter is to say “that’s not true,” and either point that out in the article or refuse to report the misstatement.

Gibbs is right, but that probably won’t change anything.

Myth of Small Business Job Creation

Date: July 8, 2009
Author: Bob Griendling
Categories: Economic Policy, Healthcare, Small Business

The Washington Post’s Steve Pearlstein argues that the meme that comes mostly from Repugnicans is patently false.

Suffice it to say that, in terms of new job creation, the data show that most of it happens in a small number of very fast-growing companies that are no longer what most of us would consider small. There are lots of reasons for the success of these fast-growing firms, among them the ingenuity and hard work of their founders, the availability of capital and a culture that celebrates risk-taking.

But the dirty little secret is that a lot of small-business job growth has also been driven by the decision of big businesses to outsource many tasks that they used to do in-house. In an economic sense, jobs haven’t been so much "destroyed" and "created" as they have been shifted from one company to another.

Pearlstein says the healthcare debate is colored by this myth. If we have universal coverage that requires all businesses offer healthcare and all employees must buy it, the impact on small business will be nil.  If all must offer it, none would get competitive advantage and thus be put out of business.

Pearlstein goes on to explain that many jobs created by small business is because big business has found that it is cheaper to outsource work to small businesses that are not saddled with healthcare costs.

What Pearlstein leaves out is that small businesses cited by GOPers are defined as companies with less than 500 employees.  I doubt most Americans think a business of 499 employees is a small mom-and-pop small business operation.