The Newsroom: Counterpoints

I've written about The Newsroom in the past, and while I still find it television worth watching, the obvious political slant can get pretty grating at times. So if you're watching it as well and would like to read reasonable counterarguments against the stuff they say on the show, keep going. I'm thinking about making this a weekly thing, so let's start with last night's episode, Amen (7/22/12): 

1. Newsroom Argument - Glass-Steagall ruined our country (seriously, they should have just said Gramm-Leach-Bliley raped America. It's that heavy handed). The economics expert in the show argued that after Glass-Steagall, we got out of a Depression, won WWII, put a man on the moon and we got a computer in every pot, or something like that.

First off, correlation-causation problem. Glass-Steagall was responsible for approximately none of that shit.

Second, let's stop pretending that allowing commercial banks and investment banks to be housed under one corporate entity destabilized the US. Banks in Europe didn't have the same restrictions, which is why there was bipartisan support in Congress and in the executive branch to repeal Glass-Steagall. It was the chief reason Bill Clinton cited when he signed GLB into law.

Third, even if the banks were separated, it's still impossible for "Wall Street to melt" while Main Street gets off easy. In 2008, money market funds (considered as a near-cash equivalent component of M2) "broke the buck" and highly rated corporate bonds also tanked. Commercial banking divisions have a provision where they can only buy highly rated fixed-income assets with their deposits, and we still had AAA rated assets default and fall in value. A panic is a panic and it affects everybody.

Oh, and as an aside, nice misuse of the term "firewall", Aaron Sorkin. In the finance industry, the firewall (aka "Chinese wall") is there to prevent divisions within the own company from discussing matters that could lead to conflicts of interest. A firewall can only exist within a company itself. Glass-Steagall would prevent commercial banks and investment banks from being part of the same company. There is no such thing as a firewall between two completely individual entities, at least not in current financial parlance.

2. Newsroom Argument - Governor Scott Walker should not have tried to dismantle the unions by stripping of their ability to collectively bargain. The average state worker in Wisconsin doesn't get paid that much, anyways.

 The problem with this argument is that Walker didn't strip public sector unions of their ability to collectively bargain wages. They stripped non-police and non-fireman unions from their ability to collectively bargain health and pension benefits, which account for a disproportionate amount of a state employee's total compensation package.

The salaries of existing workers aren't what's causing budget crises in our various state capitols. It's the health and pension benefits that's breaking the bank. And Walker actually increased the take home pay of most state workers by allowing them to opt out of direct deposit of union dues from their paychecks. And the majority of state employees have chosen to do so after being given the ability.

3. Newsroom Argument - Thomas and Scalia should have recused themselves from Citizens United v. FEC due to their connections with the Koch Brothers who are huge donors to Citizens United.

Come on, man. Oh, and Clarence Thomas didn't disclose his wife's income because they file taxes separately.

4. Newsroom Argument - The deregulation craze got started under President Reagan.

Actually, it was Carter. Seriously.