Dan Gainor's blog

            The Japanese have gone so gung-ho with energy conservation that some parts of that nation have turned off heat and leave workers freezing at their desks. Rather than criticize what would likely be illegal were it tried in America, Post reporter Anthony Faiola lauded it, suggesting “perhaps no people serve as better role models than the energy-miser Japanese.”

            That wasn’t the story Faiola presented. Images of shivering workers, massive government regulation and enormous costs were commonplace in his February 16, front-page piece. “To save on energy, local officials shut off the heating system in the town hall, leaving themselves and 100 workers no respite from near-freezing temperatures,” he explained. The story said “rows of desks were brimming with employees bundled in coats and wool blankets while nursing thermoses of hot tea.”

     CBS’s Bob Schieffer offered viewers “a solution to high energy prices” that “may be as plain as daylight.” Yet the truth of the matter was far different and the November 10 report showed the network was in the dark about its own story on solar energy.

     The story didn’t just wildly underestimate the cost of one family’s “tiny electric bill.”. It also forgot to mention that the tax breaks for solar power all come out the pockets of other taxpayers – in this case, more than $10 billion worth.

     The “Evening News” went to Barry and Anita Mathis’ house to look at solar panels as a way to cope with higher energy costs. Mrs. Mathis showed reporter Thalia Assuras her bill, which was just $43.01. “It was kind of mind-blowing when I first moved into this house because I'd open power bills and I'd just start laughing,” Mrs. Mathis said. “It just didn't make any sense that you could save this much money on electricity.”

     From television to newspapers, the media have gone wild over oil companies’ profit reports this week, asking “how much is too much?” 

     That question alone demonstrated journalists’ omission of free market principles in their reporting. America’s free market allows the small businessman to become a large business if he is able. Once companies are publicly traded, millions of others share in the business’s profits. Yet, the media have pitted businesses against consumers, leaving out the fact that these large companies distribute dividends to millions of individuals.

     Covering oil companies’ profits, reporters operated on the assumption that there should be a profit ceiling for a business, and that anything above that would be unacceptable. They also attempted to whip up consumer “outrage,” even though it is consumer demand and oil scarcity that drive up prices – not an arbitrary decision by oil companies. Just a few highlights:

     With the nomination of a new Federal Reserve chairman, “inflation” is the buzzword of the week. But the media have been warning about rising inflation since Hurricane Katrina hit – some even likening today’s situation to the Jimmy Carter 1970s, a notorious time for both high oil prices and inflation.

     “For the second day in a row the stock market took a drop,” said CNN’s Miles O’Brien on the October 6 “American Morning.” “And I think it’s – what do we need, those ‘Whip Inflation Now’ buttons, maybe.” Andy Serwer agreed: “Back to the ’70s. Turn your thermostat down, get your cardigans out.”

     The way to the media’s heart is to take jabs at Wal-Mart – JibJabs, that is. JibJab.com, the maker of several popular political videos, unleashed an assault on the nation’s biggest retailer that one CNN journalist called “priceless” and another called “hilarious.”

     CNN was especially friendly to the team of Evan and Gregg Spiridellis, dwelling on the video in two separate programs. CNN’s Money.com Managing Editor Alan Wastler even called the video company “our friends at JibJab” during the October 22 “In the Money” show. Not to be outdone, anchor Jack Cafferty said, “I love those guys.”

     That was how CNN led into a clip of the anti-Wal-Mart attack that features a potbellied shopper filling first a cart and then a house with mountains of retail “crap.” CNN pointed viewers to the video by naming JibJab one of its recommended “Funsites.”

     One of the few pieces of major legislation that has recently passed with overwhelming support from both parties was the bankruptcy reform bill, signed into law by President George Bush in April. While a bipartisan majority in both houses of Congress endorsed the bill, the media have lamented the new law’s reforms.

     Journalists on NBC, CBS, and ABC have called Chapter 7 bankruptcy a “safety net,” a “new lease on life,” and “a fresh start.” In contrast, as one interviewee put it, there’s “a special place in hell” for those who crafted the reform bill. While not every story took such a hyperbolic tone, the media used the victims of Hurricane Katrina to lobby against a reform they didn’t particularly like.

     The networks showed roughly the same interest in bankruptcy after Katrina as they did when the bill was in Congress. The Free Market Project analyzed network news stories between April 1 and October 17, finding six full stories in the weeks surrounding the bill’s passage. In the wake of Hurricane Katrina’s destruction, as the new law’s effective date approached, the media coverage was seven full stories. The recent stories tied the victims’ welfare to the “obvious choice … to file bankruptcy,” as NBC’s Alexis Glick put it on the October 10 “Today” show.

     CBS reporter Kelly Cobiella’s reaction to flooding in the northeast United States was to call for federal aid. All she needed to do to understand that wasn’t a good idea was to watch her own news show.

     Cobiella’s call came during the October 13 “Evening News,” which did a two-part segment on flooding in the northeast. Cobiella was in New Hampshire and Claire Duvall reported from New Jersey. Cobiella began the report and after surveying the New Hampshire flood damage she declared “There is a real need for federal help here.”

     Duvall then followed up, interviewing Oakland, N.J., resident Ruth Brock. Brock lamented that flooding “has happened three times since April. Prior to that it was three times since 1955.”

     For the media, Hurricane Katrina has been a story of zeroes – the more, the better. While reports before the hurricane’s landing incorrectly warned of tens of thousands of deaths, one prediction that has panned out is the gargantuan cost of the storm. Katrina wrought tens of billions of dollars in destruction and set in motion a $250-billion rebuilding effort.

     While not as visible of a step, freeing the market of government intrusion is almost as important as the endless zeroes in the relief budget. One broadcaster who has given these new policies serious attention is CNN’s Lou Dobbs. Unfortunately, he disregards free market solutions on a regular basis. Even raising the minimum payments for credit cards is a “mindless” step engineered by “idiots at the U.S. Treasury Department.”

Spending federal money without raising taxes? Broadcasters have been incredulous at the thought, especially since Hurricane Katrina hit – so much so that 59 percent of their tax-related stories have suggested tax hikes. Reporters turned to everyone from Bill Clinton to the man on the street to fellow journalists to make the case for taxation.

A typical question from a network reporter showed annoyance at the president’s tax policy and implied that anything but raising taxes is irresponsible, sounding something like this: “The last thing in the world that George W. Bush wants to do is raise taxes, but the amount of money that we’re talking about here, we’re talking about many, many, many tens of billions of dollars. Can that be done without raising taxes?” That was ABC’s Ted Koppel following Bush’s address to the nation on September 15. Journalists made sure the audience didn’t forget several things – namely, that Americans are paying for military operations in Iraq and that the United States has a deficit. As the Free Market Project has shown reporters frequently refer to deficits as if they are inherently bad, though they are actually a small percentage of a multitrillion-dollar economy and should not inspire panic.

     Even when journalists try, they just don’t understand Middle America. CBS proved the point with a story on the multi-billion dollar business of NASCAR. Even in a story made possible by the enormous success of the sport, CBS’s “60 Minutes” depicted racing promotions as “hucksterism” and advertisers as “not wholesome” while the product itself was portrayed as an “good ol’ boy Southern Confederate flag sport” hostile to minorities.

     Reporter Lesley Stahl’s October 9 piece described the depths of the free market that NASCAR was willing to delve into: “They'll even rename a race for a sponsor. Warner brothers got the “Batman Begins 400” this summer.” Stahl overlooked the fact that sporting events, like college football bowl games, are often named after advertisers.

     Stahl also criticized NASCAR’s aggressive marketing, telling CEO Brian France, part of the sport’s founding family “You are unabashed in the hucksterism category.” France had nothing to apologize for. According to a September 5 Fortune magazine story, “NASCAR had total corporate sponsorship revenue last year of $1.5 billion, compared with $445 million for the NFL and $340 million for Major League Baseball.” Fortune added that 106 of Fortune 500 companies are involved as sponsors – “more than any other sport.”

     That wasn’t enough to keep Stahl from criticizing NASCAR’s sponsors. When France told her, “I mean, we have limits,” about which sponsors are accepted, Stahl replied: “You do? Could’ve fooled me.” The exchange continued and Stahl complained that “You do Viagra, you do liquor.” Stahl then got to the heart of her critique: “You promote this sport as family values. You are sponsored by things that are just not wholesome. I mean, for years it was cigarettes. I mean, come on. Now it's liquor.” Stahl never mentioned that all of the products she criticized were legal. She was unhappy because they were “just not wholesome.”

     Fortunately, NASCAR’s all-time winningest driver Richard Petty was on hand to explain the free market beauty of the sport and its founding family. “They took nothing, and kept working. And over 55 or 60 years this is what you see, okay? That's capitalism.”

ABC, CBS, NBC skip $40-billion catastrophe at mortgage giant.

     Network news continues to ignore the ongoing $40-billion crisis at mortgage giant Fannie Mae, despite new accounting problems and a recent one-day stock drop of 11 percent.

     Print media, led by The Wall Street Journal, have pointed out the many flaws in the Fannie Mae operation. A September 29 Journal piece said that investigators had “found new accounting violations, including evidence that the company may have overvalued assets, underreported credit losses and misused tax credits…”

     That report and others received no network news attention. In the six months from April 5 to Oct. 5, 2005, the three broadcast networks combined mentioned Fannie Mae just twice even though the stock has dropped almost $30 billion in value during 2005. One of those reports was a passing mention of Fannie Mae mortgages and the other was a spirited defense of the company by liberal Rep. Barney Frank (D-Mass.) complaining that “you have the administration in an ideologically driven attack on Fannie Mae and Freddie Mac.” In the June 12 report from “This Week With George Stephanopoulos,” Frank went on to criticize “free market fundamentalism going after the two institutions that have done a great deal to make the 30-year mortgage possible through the secondary mortgage market.”

     Frank’s comments were an attempt to camouflage the massive wrongdoings at Fannie Mae, including $10.8 billion in overstated earnings – and that doesn’t count the new accounting problems. During the six months that the networks ignored the firm, it has been the subject of congressional hearings, appointed a new chief executive and twice failed to meet deadlines for its earnings reports. In addition, Fed Chairman Alan Greenspan warned that the size of Fannie Mae posed a threat to the economy.

     None of that was aired on the network news shows.

     This is consistent with findings of an April 4, 2005, Free Market Project study about Fannie Mae media coverage entitled “Government Sponsored Enron.”  That analysis found broadcast news covered the Enron debacle far more than the crisis at the mortgage leader, even though Fannie Mae’s accounting problems were 19 times the amount of Enron’s. Fannie Mae, a Government-Sponsored Entity, has a special congressional charter, special tax breaks and an implied taxpayer-funded bailout if things go wrong.

     In fact, the networks are still discussing Enron far more than Fannie Mae. The Enron fiasco has become network shorthand for business corruption, cropping up at least 33 times in six months.

     Enron has been linked consistently with every kind of corporate misconduct. New York Times reporter Judith Miller went even further on the July 6 “Good Morning America,” saying, “From Watergate to the financial scandals of Enron, to the abuses that took place in Abu Ghraib prison, all of these stories required confidential sources.” The August 3 “CBS Morning News” also told viewers of “another settlement for investors burned by the Enron collapse.” None of these stories discussed the more current – and more expensive – catastrophe of Fannie Mae.

     Unlike the broadcast networks, both Fox News and CNN acknowledged the Fannie Mae problem. Fox was the only network to do a complete story on the issue. CNN addressed the topic twice, once in a brief about Greenspan’s criticism of the company. The other time was in a June 15 “Judy Woodruff’s Inside Politics” story about “the revolving door between key White House jobs and big business.” Rather than use that opportunity to point to the huge controversy at Fannie Mae, where several key Clinton staffers once found a home, reporters Suzanne Malveaux and Dana Bash downplayed that and highlighted problems for Bush.

     Malveaux simply said, “Clinton budget director Franklin Raines left the White House for Fannie Mae, a private mortgage giant backed by the government.” According to the October 5 Washington Post, Raines and former chief financial officer J. Timothy Howard are being sued by Fannie Mae shareholders after “they were forced from Fannie Mae last year amid allegations that they flouted accounting rules to boost earnings, which in turn triggered millions of dollars in bonuses for themselves and other top executives.”

     However, the reporters didn’t mention that. Instead, Bash followed Malveaux’s mention of Raines with this: “But energy ties of Mr. Bush and of the vice president has created a perception problem from day one here about the president’s environmental policy.”

ABC, Times use new study on Arctic’s seasonal ice shifts to sound global-warming alarm. 

     The global warming alarmists are out again. The polar ice caps aren’t leaving us forever, but ABC and The New York Times seized a new study this week about seasonal change to proclaim the end of the North Pole and the polar bears’ habitat.

     ABC’s Bill Blakemore reported for three straight days on a NASA study of Arctic ice patterns that found less ice at the end of the 2005 summer than in years past. On the September 29 “World News Tonight,” Blakemore spoke of creatures living in the icy water – creatures anchor Bob Woodruff described as “in enormous peril.” Woodruff introduced the segment as part of ABC’s reporting on “the serious concern among scientists that the polar ice caps have been melting,” and Blakemore said of the Arctic sea ice: “before the end of the century, it could all be gone.”

     But the truth is, scientists on both sides of the global warming debate agree that the ice cap isn’t in “peril.” As Myron Ebell, director of global warming and international environmental policy at the Competitive Enterprise Institute said, the Arctic is experiencing “natural cycles of warming and cooling.”
Yet, on the September 27 “World News Tonight,” ABC’s Elizabeth Vargas introduced him with “a staggering headline tonight about the planet getting warmer.” “Researchers say the summertime ice cap, which covers the North Pole, could be gone in 100 years,” Vargas said. Blakemore then declared that “the frozen surface of the Arctic Ocean is melting away,” warning that “villages are tumbling into the sea.”

     “Good Morning America” continued the hype on September 28. Diane Sawyer said NASA’s study provided “startling and alarming images” – “brand-new satellite photos showing the ice pack around the North Pole melting and shrinking. Stark proof that the world is getting warmer.” Blakemore appeared again, lamenting: “These vast fields of ice of the frozen Arctic Ocean are so immense, so beautiful, with such a huge silence, it’s hard to imagine them ever disappearing. And yet, that is exactly what some scientific scenarios say could well happen before the end of the century.”

     Blakemore did admit that he was talking about “summer sea ice,” but that was halfway through his report, and the overall tone was alarmist. He ended by linking hurricanes, summer heat waves and global warming. Sawyer asked him, “Is this the final proof about global warming?” Blakemore replied, “It’s the latest, it’s the latest very strong proof. The scientists are quite worried about it.”

     Not all scientists are as worried as Blakemore was. In fact, scientists on different sides of the global warming debate even agreed that reporting on the study has been overblown. The missing point, they said, is that NASA’s study, in conjunction with the National Snow and Ice Data Center (NSIDC), provides information about the seasonal melting that occurs in summertime – which doesn’t mean the ice caps will be gone during the rest of the year.

     “The Arctic Ocean was ice-free at the end of the summer for 40 percent of the last 7,000 years. What’s the big deal?” said Pat Michaels, a senior fellow at the Cato Institute and a research professor of environmental sciences at the University of Virginia.

     Michaels said he didn’t see how “the conditions that dominated three millennia can be construed as some type of disaster.” “If the issue is that human beings are capable of changing the climate – they’ve been doing that for thousands of years,” he said. “So what’s new?”

     Mark Serreze, a senior research scientist with the NSIDC at the University of Colorado-Boulder, said he and Michaels would disagree on many points on climate change, but they agree that the media have been missing the point of the Arctic story.

     “The media are trying to simplify this or don’t understand what we’re talking about,” said Serreze, who was quoted in The New York Times’ September 29 article about the study. He said the media, in his experience, are “not necessarily trying to find your story – they’re trying to get their story.”

     The Times story, by Andrew C. Revkin, skipped straight to global warming in the second paragraph, stating that the shift in summer ice “is hard to explain without attributing it in part to human-caused global warming, the team’s members and other experts on the region said.”

     Revkin wrote, “One of the most important consequences of Arctic warming will be increased flows of meltwater and icebergs from glaciers and ice sheets, and thus an accelerated rise in sea levels, threatening coastal areas. The loss of sea ice could also hurt both polar bears and Eskimo seal hunters.”

     But Serreze told the Free Market Project that there is an important distinction the media often don’t clarify – the difference between ice in the ocean and ice on the land. Melting sea ice “has essentially zero effect on sea level,” he said, another point on which he and Michaels agreed. Both scientists gave the example of a glass of ice water: if ice cubes in the glass melt, the water level in the glass remains the same.

     It’s ice melting from land into the sea that causes ocean levels to rise – but even so, Serreze said that “right now, the sea level rise that we observe is quite modest.” He said the rate could increase in the future, though that is debatable depending on forecasts.

     In the meantime, the media continue to trot out natives of the Arctic region, whether human or animal, in support of a global warming disaster theme.

Story compares caffeine to Steroids, but leaves out how commonplace it is.

     A new energy drink for kids, KickStart Spark was treated as a gateway drug and as bad as steroids on the September 26 ABC “World News Tonight.”.

     ABC’s problem with the beverage was the amount of caffeine it contained – less than a cup of coffee. While the report mentioned that children already consume a lot of caffeine from soft drinks and chocolate, it exaggerated the danger and downplayed the benefits of KickStart Spark.

     Reporter Dan Harris began the story by linking the drink to a major drug controversy. “There's been growing concern about the use of performance-enhancing substances by young people since baseball’s steroids scandals.”

     ABC then interviewed Einstein Medical College dietician and nutritionist Keith Ayoob on the drink and heard his fears it will lead to more hazardous behavior. He explained, “It worries me that first it starts out with caffeine, and then it goes on to other things that could be even more dangerous.” The report didn’t explain what would be worse.

     If caffeine were a gateway drug, then this nation would be in peril. The average American consumes 1.64 cups of coffee per day. Fifteen percent of the average beverage consumption per person was coffee and tea in 2004. Worldwide, more than 400 billion cups of coffee are consumed every year.

     No one who liked the drink or anyone from the company, Advocare, was shown in the report. The company’s Web site was displayed on the screen, and quoted twice. The first time was a simple statement of what the product does – “provides focused and long-lasting energy that's just right for children.” The second time the company’s statement was quickly refuted.

     Advocare stated that KickStart Spark “contains vitamins and minerals essential for children's balanced nutrition.” Harris quickly responded that “nutritionists say children can get those vitamins without the caffeine, just by eating healthy foods.” While a true statement, no mention if getting vitamins and minerals with caffeine is worse than no vitamins at all. According to Advocare's Web site, only 8% of children are getting all of the daily recommended nutrients.

The media continue to use the 60th anniversary of the United Nations as a platform to criticize U.S. foreign aid as “second lowest of any wealthy country.” This is part of an ongoing, celebrity-filled push to get the United States to give billions of dollars in aid – totally ignoring the massive contributions already made by American charities.

The General Assembly has been debating what are called U.N. Millennium Development Goals, which attempt to mandate that each industrialized nation give 0.7 percent of its Gross National Product to foreign aid. The media have used the event to misrepresent U.S. foreign aid and to highlight celebrities like actress Angelia Jolie, an outspoken supporter of increased taxpayer-funded aid.

ABC’s “Good Morning America” interviewed Jolie September 13, along with with Dr. Jeffrey Sachs of the U.N. Millennium Project. Sachs is author of “The End of Poverty,” in which he indicted the United States for supposedly lagging behind other countries in aid for the poor. The two have produced a documentary about a trip to Kenya that is being shown on MTV on September 14.

Tax cuts have been the latest craze in gas price management, but CNN’s Miles O’Brien suggested on the September 8 “American Morning” that raising taxes might be the way to go.

“I think there’s a lot of people who’d tell you long-term, raising the gas tax would be a good idea,” O’Brien said. Andy Serwer replied, “Oh yeah. That’s right. But it’s politically suicidal to suggest that, as we’ve seen.”

Serwer was reporting the amount of federal and state taxes factored into consumers’ gasoline costs, noting that Georgia had temporarily cut its gas taxes. His report on “stubbornly high” gas prices was filled with economic malfeasance:

• It’s their money anyway: Serwer said other states were considering gas tax cuts. “But there’s some downside,” he said. “Number one, the states lose hundreds of millions of dollars of revenue, and number two, it may discourage conservation. On the other hand, maybe we all need a break.” The idea that tax relief is a loss to the government is the standard media approach – ignoring the fact that consumers get to keep more of their hard-earned money.

     Misinformation continues to flow about supposed “record high” gas prices. Over the holiday weekend, the national average for gas rose to a little more than $3, still below the inflation-adjusted record of $3.11 set nearly 20 years ago.

     That didn’t stop “The Early Show” on CBS from claiming a record-high $3.20 national average for regular unleaded gasoline. On the September 6 broadcast, both Julie Chen and Hannah Storm made the same incorrect claim.

     According to Chen, “The huge hit Hurricane Katrina put on the area helped send gas prices shooting up 75 cents to an average of $3.20 a gallon.” Storm went even further claiming that the numbers she was citing came from AAA. “Since the storm hit, almost 70 percent of normal oil production has been shut down. And that, of course, has had a dramatic effect on gas prices. According to AAA, gas has gone up 75 cents. That puts the average cost of regular unleaded at $3.20 a gallon,” explained Storm.