The Joy of Fiat News

Every morning, we run The Narrative Machine on the past 24 hours worth of financial media to find the most on-narrative (i.e. interconnected and central) stories in financial media. It’s not a list of best articles or articles we think are most interesting … often far from it. But for whatever reason these are articles that are representative of some chord that has been struck in Narrative-world. And whenever we think there’s a story behind the narrative connectivity of an article … we write about it. That’s The Zeitgeist. Our narrative analysis of the day’s financial media in bite-size form.

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There may not be a single news outlet on the planet that doesn’t dabble in Fiat News techniques from time to time. That is the nature of a competition game, after all – the rules are defined so that you either play or you lose.

But nobody – nobody – does Fiat News like the New York Times does Fiat News. Sure, CNN, MSNBC and Fox are a bit bolder, using every tool at their disposal to grey the line between analysis and news, to introduce affect into every term, to assign and present coverage that is at once entirely factual and entirely misleading. If we were being supremely charitable (and we won’t be – this is just a hypothetical), you might even argue that the Foxes and MSNBCs of the world are Not-Even-Fiat-News in some meta sense of the idea, simply because everyone knows that everyone knows that a decision to visit those pages is a decision to read a lot of opinions masquerading as news. They’re Not Even Pretending Anymore (TM), as someone might say, so if you’re reading them with any semblance of earnestness, you’ve basically given up.

But the sheer joy with which the Paper of Record publishes obviously affected content as news is a different thing entirely. And in their case, they really are still pretending. I am confident that this piece was published with a serious belief that it met news standards. I’m confident that view is still held. And yet.

Elizabeth Warren on a Wealth Tax [New York Times]

Look, we haven’t identified a systematic way to track down affect and intent in image selection, but to grossly paraphrase Justice Stewart, I know it when I see it. Let’s just say that the Times’s proprietary archive of GOP candidate images was somewhat less flattering. I won’t hold it against you if you disagree. This is clearly in Rusty’s-opinion-land.

“By now, Senator Elizabeth Warren of Massachusetts is known for being the candidate ready with a plan. But back in January, she was just getting her campaign started. And one of her very first proposals was to impose a wealth tax.”

But this isn’t. This is some sublime A-level Fiat News. The lede of the piece is an unclothed Common Knowledge Missionary statement that communicates zero factual content and an assertion described as something that is ‘known.’ By whom? I dunno. Based on what? No idea. Maybe it’s true. It is certainly the impression that I have, but that raises some uncomfortable questions about how, exactly, ideas about what we all know we all know enter our collective subconscious. Hint: it’s pieces like this.

“When the United States government wants to raise money from individuals, it taxes what people earn — the income they receive from work or investments. But Ms. Warren wants the government to also tax the accumulated wealth — think stocks, real estate and retirement funds — held by the very richest Americans.”

This is not a Fiat News point, but an aside to say how delighted I am that anyone thinks ‘retirement funds’ represent a meaningful portion of this figure.

“It is expected to generate $2.75 trillion in revenue over a 10-year period — money that could help pay for expanded social programs.”

Passive construction probably isn’t halal with the style guide anyway. But when you omit the “who”, you aren’t just communicating vaguely. You are effectively presenting what amounts to an estimate, projection or judgment as a fact. The inclusion of the paired-up issue that follows is pure affect. Whether it’s Facebook Boomer Memes about “every dollar spent on X could have been spent on wounded veterans”, or a New York Times writer saying that we could use these taxes to expand social programs, you know you’re dealing with someone who wants you to draw a relationship between two things which does not exist.

That relationship is not intrinsic. Presenting it is an emotional appeal. Every time.

That’s what it means for someone who has a subtler grasp of the tools of Fiat News to tell you how to think.

There are plenty more to be found, but the last one may be the best.

“Well-funded opponents of the tax would be nearly certain to wage a legal battle against it.”

It’s obviously analysis rather than fact, but what is so marvelously plain about this statement is its intent to prime the pump on the issue. Before you hear any opposition, we want you to know that it is “rich people” who oppose doing all these good things.

Here’s the funny thing: putting aside big constitutional issues for a moment, I think that a wealth tax is generally better and more conducive to freedom than an income tax. It aligns better with what government ought to do, which is to act as an ongoing defender of the assets of its citizens against threats both internal and external. Paying like we would pay for insurance makes sense to me. The hilarious absurdity of any attempt to actually value what rich people own, however, means that I prefer to shift more of our tax structure to capital gains from income rather than try to pretend we know what someone’s private assets are worth year-to-year. It’s a view I think Ben shares, albeit in a more exaggerated way, perhaps.

In other words, this isn’t about us disagreeing with Warren, because in a lot of ways, we don’t. As always, this is about how we’re being told how to think. And it’s all the more seductive when it IS an idea we actually favor.


  1. I’ll use the same challenge I make for the VAT tax (whenever it has one of its periodic moments of vogue, usually argued as more “efficient,” “fair” and/or “loves puppies more” than the income tax) for the wealth tax: link the two in the same law as in “the same bill that creates a VAT or (not and) wealth tax eliminates the Income Tax.”

    Otherwise, no matter what is said about the “efficiencies,” “fairness,” etc., of the wealth tax versus the income tax, all we’ll really end up with is both and, after a few years, when everyone forgets that it was “only going to be used on the rich,” its threshold will drop right down to the middle class which is (1) where the real tax-generating money is and (2) what the plan was all along.

    I don’t know if it’s clear eyes / full hearts or just experience, but the new tax takes out the old one or all it is in another - and additional - new tax that will soon hit the middle class.

  2. The next tax that is shelved will certainly be the first! But as I note, efficient or aligned or not, a wealth tax per se doesn’t work. Valuations just impossible. That’s why I agree with Ben’s view on cap gains treatment going ordinary, and these taxes already exist and are our best proxy.

    My strong preference would certainly be to pair that with a corresponding income or other payroll tax cut rather than, as the NY Times contributor helpfully suggests, expanding the scope of the state.

  3. To debate is fiat. Government policies are for sale - party affiliation makes no difference. You think the opiate crisis was an aw shucks accident? Frozen pizza tomato paste became the vegetable in school lunches after intelligent debate? For-profit colleges and colossal student debt an oversight? Designed-to-fail mortgages were just a accounting error. These are the elements of our intangible net worth being monetized.

  4. Absolutely right. The linked analysis amply supports this perspective.

  5. Thanks Christopher. The starting point for debate should be: what’s moral is what’s legal and what’s legal is for sale.

  6. Of course, NOBODY will ever campaign on cutting spending, like the insane amounts we pay for"defense." Or cutting “entitlements” like the crazy welfare system we call “Social Security.” Fiscal restraint is so early 20th Century. Dick “5 deferments” Cheney: "Reagan proved that deficits don’t matter.’ Like the way Hemingway described going bankrupt…gradually, then suddenly. And into the gyre we go. Who says anyone is entitled to anything, other than life, liberty and the pursuit of happiness? Besides, IMHO happiness is not a place, it’s a state of being while you are on your way to your destination.

  7. Well, some defense insiders have been trying to reduce costs, or at least make an effort to acknowledge the problem: However, note that the author works at an FFRDC (federally funded research and development center), and it teeters on the edge of being fiat news pandering to … I’m not sure yet. Pandering to technical (software) illiterates, maybe.

    The customer of the publically owned for-profits (such as RTN, LMT, GD, BA, NOC) has demanded “agile” programming environments for the ossified integrated defense sectors of defense, probably because it worked so well for FB, GOOG, and other Si Valley tech companies.

    Which is ridiculous - “agile” did not get us to the moon ( – also: and systems engineering did not prevent the preventable 1986 Challenger disaster.

    Chaos (that “agile” and “systems” try to prevent) does not interfere over the course of a well-run programs, if the average design knowledge, ethics, dedication and respectfulness are high enough. This is similar to Epsilon Theory’s “pack” mentality promotion.

    Streamlining has resulted in mergers, which has often reduced competition for large defense contracts between 2 specialists and a third “outsider”. For example RTN and LMT battle for work work in one project space (with NOC a distant third) while NOC and BAE may be the leads duking it out in another type of product contract space. Given the panic-driven “systems” timeline (“IPDS gate keeping” – look for that in systems publications) the for-profits have reduced their research & development or let the FFRDCs take all of it. If neither major competitor has any good ideas, well the end product is a stinker. Possibly a multi-billion dollar stinker.

    Employees are commodities and either have to pick an employer because there is no other choice, or move. That is not conducive to building strong teams.

    Or “packs”. I like that term better. I recently rewatched “From the Earth to the Moon”, to celebrate the 50th anniversary of the Apollo 11 landing. Packs led the way to success! Not scrum teams.

Continue the discussion at the Epsilon Theory Forum


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