Time's Terrible Two: The perils of Barlett and Steele

National Review, July 17, 2000 by Ramesh Ponnuru

Is there a journalism award that Donald Barlett and James Steele have not received? A pair of investigative reporters now at Time magazine, Barlett and Steele won two Pulitzers while at the Philadelphia Inquirer. A series they wrote in Time last year received eight different prizes. In 1990, the Washington Journalism Review called them "almost certainly the best team in the history of investigative reporting-Woodward and Bernstein included."

The crowning moment of their careers came in 1991, when they wrote a massive series (nine parts, 73,000 words) for the Inquirer. "America: What Went Wrong?" was a diagnosis of what ailed the nation's economy, then in the middle of a recession. The paper got 400,000 requests for reprints before it quit taking orders. The series became a best-selling book, which Bill Clinton used to support his indictment of President Bush's economic policies. The book popped up again in President Clinton's last State of the Union speech, when he mentioned its title to show how much the national mood had improved since he took office.

The book is hopelessly dated. To read America: What Went Wrong? today is to travel back to a time when Democrats seriously argued that the United States faced long-term decline unless it reined in Wall Street, got tough with Japan, and adopted an industrial policy. Not even Dick Gephardt believes that anymore. But Barlett and Steele still do. To judge by their recent work, they are determined to be spokesmen for what remains of the labor Left-even if they have to do sloppy reporting to retain the role.

Nobody has ever accused Barlett and Steele of a strong grasp of economics. They have always preferred to tell economic history as a morality play, with venal politicians and greedy, short-sighted CEOs ganging up on working stiffs. The 1991 series recycled every Democratic cliche about Reaganomics. According to Barlett and Steele-let's call them B&S for short-the country was de-industrializing. The only new jobs were in hamburger-flipping. Corporate debt was rising, thanks to junk bonds. So was the trade deficit. Companies were dismantling their pension guarantees. Deregulation had been a disaster for everyone but the rich. The middle class was vanishing. The solution was for the government to raise taxes on business and the rich, prohibit "corporate raids," cap executive salaries, and direct investment toward strategic industries.

If all this was untenable then, it seems downright quaint today. Almost everybody now sees that the debt-financed restructuring of corporate America in the '80s left it much more able to succeed in the '90s. "Junk bonds," no longer demonized, are simply called "high-yield bonds." Deregulation clearly cut the cost of transportation; only by ignoring inflation were B&S able to obscure this fact. The rise of services created not only dislocations, but opportunities. People prefer their 401(k)s to yesterday's pensions for the simple reason that the newer accounts have higher yields. And by participating in capital markets, these accounts direct resources to promising industries far more efficiently than government could.

None of this experience registered with B&S. In 1996, they wrote another bloated series for the Inquirer, "America: Who Stole the Dream?" The message was substantially the same as before, although with more time spent bashing trade and immigration for lowering wages. Service industries still didn't produce "good jobs." As in the previous series, an endless stream of hard-luck cases was made to represent the overall trend of the economy.

But by 1996, there was neither a recession nor a Republican White House, and journalists were treating left- populist economics more skeptically than in 1991. Newsweek columnist Robert Samuelson called the B&S series "junk journalism" that "fails the basic test of journalistic integrity and competence." The Seattle Times, which had planned to reprint the series, pulled the plug after the first installment because its assertions were "unsubstantiated."

Leftists who believe that the middle class is being immiserated need to explain why that class has not revolted against its oppression. Now that "false consciousness" has been discredited, a corrupt campaign- finance system has become the favored explanation-one that B&S have adopted at Time, with a vengeance. "In essence," they wrote in February, "campaign spending in America has divided all of us into two groups: first- and second-class citizens. . . . Call it government for the few at the expense of the many." They thus inaugurated a new series explaining, as Time's headline writer put it, "How the Little Guy Gets Crunched" by campaign contributions.

The very latest big B&S article was a mid-May expose-or rather, attempted expose-of the bankruptcy bill before Congress. The bill is a response to the explosion of bankruptcy filings over the last 15 years: There were 300,000 in 1984, 1.4 million in 1998. But to hear B&S tell it, Congress is simply "punishing the downtrodden" at the behest of credit-card companies.