Inflation is a dirty word in business reporting – except when it’s the journalists themselves doing the inflating.
In the recent Katrina-driven gas scare, network news shows pumped up actual gas prices an average of 75 cents — higher than any state’s gas taxes. Prices shown on the screen were up to $3.25 higher than the national average for the day’s gas. On the other hand, when prices started dropping after Labor Day, the networks’ daily price patrols were scarce.
NBC was the worst offender, with prices shown averaging $1.01 higher than the national price. The network’s Anne Thompson said on the August 31 “Nightly News” that “no matter what kind of gas is sold, today it’s now unbelievably expensive.” Though the national average that day was $2.62, Thompson showed the “unbelievably expensive” backdrop of $3.49 for regular.
On ABC the same night, Charles Gibson proclaimed that gas was “approaching $4 a gallon in some places.” Reporter Dean Reynolds’ story was filled with gas lines, localized price spikes and one analyst who said $5 gas was the “worst-case scenario that we’re hearing out there.” Reynolds, like Thompson, stood in front of a sign advertising $3.49 for regular – 87 cents higher per gallon than the average price.
A Free Market Project analysis of nightly broadcast news shows in the two weeks around Katrina’s impact found the video showing prices an average of 75 cents higher than the national average at the time. Four out of five images showed gas prices higher than the actual price for gasoline. CBS’s pictured prices averaged 89 cents higher and ABC’s 48 cents higher.
The Free Market Project analyzed 30 gas price stories around Hurricane Katrina, which included 46 images of gas signs. Those stories fell in the week of and the week after the storm, between August 22 and September 3, on the “CBS Evening News,” ABC’s “World News Tonight” and “NBC Nightly News.” Prices shown on the screen were compared with the national average for regular gas for that day, according to AAA’s Fuel Gauge Report.
During that time period, the national average for regular gas rose about 26 cents to $2.87. But even when reporters stated the actual average in their stories, they showed footage of much higher prices. The reporting of extreme prices was far from balanced – prices shown were higher than the average 80 percent of the time. Only one-fifth of the prices shown were lower than the average. Rather than showing where people could find the country’s cheapest gas, journalists focused on where the most expensive gas was, fueling fears of gas lines and shortages.
CBS showed one station’s sign where gas was $5.87 per gallon when the national average was more than $3 cheaper at $2.62. NBC showed prices as high as $3.99 and $4.47 when the national average was only $2.71 per gallon. NBC did not show any prices lower than the average during the analysis time period.
Of course, reporters were talking while images flashed across the screen. Sometimes, journalists stated the national average in their reports, but the spoken word was overshadowed by visuals of much higher prices. The September 1 “CBS Evening News” had Bob Schieffer quoting the national average at $2.68, but then he said that “in some places it jumped a whole lot more.” Jim Axelrod’s report followed from Atlanta, Ga., where he said post-Katrina “you’ve got gas prices spiking big time here in Atlanta and in much of the country.” Axelrod contrasted two gas station owners – one who “promised” to keep his price for regular below $3, and another who had “briefly” raised his price for regular to $5.87. The latter stated that he wanted “to stop people buying it for a while.” Axelrod, indignant at the man’s use of the free market to stave off a shortage, pressed him: “So you couldn’t just go out and put a sign up that says ‘No more gas today’?”
The August 25 “CBS Evening News” took a more lighthearted approach but communicated the same exaggeration. It featured a Texas station that was having a little fun with its gas price listings. Its sign had a picture of an arm and a leg, as well as “your first born,” in the price slots beside the different gasoline grades. (That graphical “price” was not included in the analysis.)
Declining prices aren’t such big news
In recent months, the networks have covered daily increases in gas prices, frequently citing “record highs” that weren’t when prices were adjusted for inflation. The Free Market Project has documented this reporting trend extensively. The combination of Katrina’s impact on the oil and gas markets with holiday traveling demands pushed the national average above $3 per gallon on Labor Day weekend. But prices started falling shortly thereafter and were back below $3 by the following weekend.
In contrast to the constant coverage of rising prices, the networks gave only passing mention to falling prices. When prices declined steadily for nine working days in a row – a 25-cent drop from September 8 to September 20 – the daily price updates vanished. The September 20 price of $2.79 was 27 cents below the recent high.
That didn’t stop ABC’s Terry Moran from introducing a September 18 “World News Tonight” report “in these days of soaring gas prices.” And Matt Lauer, on NBC’s September 16 “Today,” bemoaned the country’s “price tags,” including “gas prices so high.”
In fact, the “CBS Evening News” was the only nightly news show that admitted the declining trend. John Roberts alluded to it on the September 9 broadcast, noting that “the price started falling this week, ever so slowly, and is now $3.02.” On September 12, Bob Schieffer said “the price of gasoline is slowly coming down,” adding that “gas is down now to a national average $2.96 for self-serve regular.” Schieffer mentioned it again on the September 19 show, which included a chart showing gasoline’s rise and fall. He said “gasoline has now given up more than half its post-Katrina gain. The nationwide average price is down to $2.81 a gallon.”