It is a common thing these days for me to finish reading a newspaper or come to the end of a TV news broadcast, and find myself thinking that I live in a separate plane of reality from the people who keep me abreast of current events.
It happened again this morning, when I read an Associated Press report on the modest quarterly profit announced by General Motors. In that story was this passage:
To keep GM afloat and get it through bankruptcy court, the U.S. government gave the company $50 billion. GM repaid $6.7 billion that the government considered loans, with the remaining $43.3 billion converted to a 61 percent stake in the automaker.
Problem is, GM didn’t repay the loan — at least not in the way that any reasonable person would define the word “repayment.” As the New York Times explained nearly three weeks ago, GM simply used other taxpayer funds to pay back the debt:
Herbert M. Allison Jr., assistant secretary for financial stability, confirmed that the money G.M. used to repay its bailout loan had come from a taxpayer-financed escrow account held for the automaker at the Treasury.
The closest the AP came to acknowledging this was at the bottom of its story, where it noted:
James Schrager, professor at the University of Chicago Graduate School of Business, said GM has a history of making boastful claims, only to disappoint. A recent television ad in which CEO Ed Whitacre declared that the company had repaid its government loans in full, with interest, was misleading, he said.
So the AP reported the loan repayment as fact, but then also reported that maybe it wasn’t really a fact and that GM’s assertion about the payback might be “misleading.” The result is that I’m left with a raging case of cognitive dissonance.
I had a similar reaction a couple of months ago, when news outlets reported that the Congressional Budget Office had declared that health care reform would lower federal spending deficits — despite the reform measure’s nearly $1 trillion price tag. True, that’s what the CBO said. But one person uniquely positioned to know the reality of the situation (he was a former CBO director) pointed out that the numbers had been cooked:
…. the budget office is required to take written legislation at face value and not second-guess the plausibility of what it is handed. So fantasy in, fantasy out.
That didn’t even slow down most journalists. Congress had clearly gamed its own budget watchdogs, but news accounts continued to give straight-faced credence to the CBO report. It’s alarming when the people you depend on to draw back the curtain are instead helping to pull it shut.