It took the force of Hurricane Katrina to wake up the media to a big story: U.S. oil refining.
Following a summer of relentless gas price coverage, the storm’s threat to refineries in the Gulf of Mexico added urgency to reports about the oil industry. But only one network news story in three months of summer coverage has attempted to explain the role of U.S. oil refining in the nation’s gasoline supply. Instead, networks have made passing references to the causes behind pricing and have criticized the free market.
One way the networks addressed refining was to hype the profits oil companies were gaining from higher prices. As NBC’s Katie Couric said on the August 17 “Today,” “As we pay through the nose, someone has to be smelling some pretty big profits.”
Likewise, the August 11 “World News Tonight” pounded the oil market for making a profit. ABC’s David Muir asked, “But are any of those increasing profits, both overseas and at home, being spent to fix those refineries or to help solve the shrinking U.S. gas supply?” Mike Rothman, an oil industry analyst, replied: “There has in fact been an increase in investment, both for production of oil as well as refining. But the impact of those is not immediate.” Muir responded as if he had not heard what Rothman said, continuing his attack: “But analysts say they’ve yet to see any improvement. And oil companies are busy spending billions in their profits reinvesting in themselves.” Muir didn’t look into how much of that “reinvesting” went to compliance costs for regulations on the industry.
To people who heard Fed Chairman Alan Greenspan speak in Jackson Hole, Wyo., at the end of last week, the housing boom will “simmer down.” But to those viewers at home watching “CBS Evening News,” housing is in a bubble and bubbles typically burst.
The August 27 CBS broadcast began with a scary introduction by reporter Bob Orr asking, “Is the roof about to fall in on the hot condo market?” Later, a segment on house hunting opened with a graphic entitled “Condo Bubble” and a brief restatement of what Greenspan said. Anchor Russ Mitchell then turned the story from a discussion of housing growth to more bubble time by dwelling on the “condominium bubble” “showing signs of being overstretched.”
Greenspan addressed housing in a more reasoned manner, but that didn’t earn him much attention in the CBS report. The August 28 New York Times explained Greenspan’s position. “In Mr. Greenspan's view, the housing market will inevitably ‘simmer down,’ and sales and prices are all but certain to slow. ‘House turnover will decline from currently historic levels, while home price increases will slow and prices could even decrease,’ he said.”
Alan Greenspan “might well be the best central banker who ever lived.” That statement, from the August 26 New York Times, reflects the attitude of even most Greenspan critics – except for the Times.
The Times looked back on the Greenspan tenure as Federal Reserve Chairman by emphasizing a threatened “housing bubble” that Greenspan doesn’t even believe in. Reporter Edmund L. Andrews characterized a Fed chairman washing his hands of a looming threat. If “housing prices do turn out to be a bubble that bursts,” said Andrews, “Mr. Greenspan will no longer be around to take the blame – or clean up the mess.”
The article, “The Doctrine Was Not to Have One,” described Greenspan as a classic free market supporter who has been wildly successful in his job. Rather than emphasize that, Andrews undercut him as a man “leaving a brilliant record but a murky legacy.” The problem? The fact that it will be difficult for a successor who “faces a near-impossible task in replicating Mr.Greenspan’s success in managing monetary policy,” said Andrews.
Many of the more than 2,000 words were devoted to talk of a looming housing bubble. But a quick search of the Times’ own archive shows that Greenspan disagrees with that entire premise. In a May 31 piece, he explained the situation. “Mr. Greenspan acknowledged that housing prices showed signs of ‘froth.’ Though he remained skeptical about the existence of a nationwide housing bubble, he said there were signs of ‘lots of little bubbles’ in particular local markets.”
Despite that, Andrews hammered home “the potential bubble in housing prices today.” In an article that was far from complimentary, he added: “But for all his triumphs, Mr. Greenspan also presided over a stock market bubble that burst and, in helping minimize the damage from that fiasco, laid the groundwork for the housing boom – and potential bust – that followed.”
Buried in the piece were a few key points about the Greenspan tenure:
The left-wing crusade against mercury appears to have been deadly. ABC’s August 26 “Good Morning America” focused on a “controversial autism treatment that may have killed a child.”
According to reporter Lisa Stark, the child went into cardiac arrest during the procedure known as chelation. It “is used to remove heavy metals like lead and mercury from the body. Some parents and researchers believe autism is mercury poisoning. Caused partly by a mercury preservative once routinely used in vaccines,” she explained. The medical community across the board state that there is no link between mercury and autism, but that hasn’t stopped left-wing activists.
Stark described the child’s death: “The Pennsylvania boy was receiving the intravenous form of chelation when he went into cardiac arrest. C.P.R. was administered but the boy died at a local hospital. An autopsy was inconclusive. More tests are planned.”
Call him a protectionist or just call him “the Dan Rather of financial journalism,” as one conservative critic referred to CNN’s Lou Dobbs. No matter what you call him, the truth is he’s one of the biggest opponents of free trade anywhere. Dobbs, who anchors “Lou Dobbs Tonight,” is a veteran business reporter who spends his time these days giving industry the business. The worst part of it is that viewers are missing the real story. Ninety-four percent of the show’s reports about trade over a four-month period blamed free trade for horrors ranging from “destroying” the U.S. middle class to leaving a “legacy of environmental degradation, lost jobs, and increased illegal immigration.” A defense of free trade never received a fair hearing. CNN has promoted the show as “news, debate and opinion.” But it’s hard to tell the difference between the three the way Dobbs delivers them. This is all part of a new analysis by The Media Research Center’s Free Market Project.
Jim Axelrod of CBS “Evening News” provided the perfect metaphor for media coverage of gas prices last night. Axelrod just started traveling from New York to San Francisco as part of a new “Cross-Country Price Patrol,” On the first leg of his journey, he showed that he didn’t know where he was going with the story. Talking while he was driving, Axelrod said the following: “We know what kind of crazy drivers plague the streets in Manhattan. The recent spike in the price of gas has made going to the pump... I'm going the wrong way! Holy [bleep].”
Sunday’s New York Times Magazine cover story was one part ‘Mad Max’ mixed with one part poor economics. The 7,400 word piece by Peter Maass was a gusher of scaremongering end-of-world predictions and claimed that an oil “crisis” is imminent. Maass filled his story with comments and views from Matthew Simmons, author of a new book called “Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy.” The story did its best to paint a great scary oil conspiracy and an inevitable “crisis ahead” “whether in a year or 2 or 10.”
Maass joined the growing journalism crowd by calling oil prices a “record.” Just as others before him, Maass ignored basic math and didn’t adjust the prices for inflation. Maass also referred to the threat of oil hitting $100. But then he quoted Simmons who said “I wasn’t talking about low triple digits.” Yet the same story said that oil prices would drop again. To quote Maass, “So after a brief windfall for producers, oil prices would slide as recession sets in.”
Blog readers were among the first to see the results of a Media Research Center Free Market Project analysis that showed the economy doing well while broadcast media coverage has shown otherwise. Today's Wall Street Journal bears that out. In an editorial labeled "Media Bears," the Journal points to the Free Market Project analysis as an answer to the question: Why is the American public down about the economy.
For those of you who don't get the Journal, and you should, here is an excerpt: "The paradox of the year is why so many Americans tell pollsters they feel bad about an economy that's been so good, with solid job growth and corporate profits, rising wages and home prices, and a huge decline in the budget deficit. Perhaps one reason is because the media keep saying the economy stinks.
The economy is doing well -- the federal deficit is shrinking, unemployment has fallen to 5.0%, and America has enjoyed more than two straight years of job growth and 3.5 million new jobs. That hasn't stopped the media from describing the economy as “dicey,” “volatile” and “slow.” The Media Research Center's Free Market Project analyzed all of the broadcast network's economic stories since the start of President Bush's second term, and we found that a big majority (62%) cast the economy in negative terms.
Even when good news made it to viewers, journalists undermined it with bad news 45 percent of the time. For example, on World News Tonight back on March 4, Dean Reynolds presented an upbeat report about strong job growth, but stuck a knife in at the end: "While job growth is up, wage growth is not. And the question now is how long consumers will keep spending and fueling the economy without a raise in pay.”
The media continue their daily gas price hype on all networks. It's more than high-priced TV talent whining about the cost of a gallon of gas. Many of the stories contain serious factual errors. In an attempt to address the problems in the coverage, the Media Research Center's Free Market Project has launched a daily item called "Gas Hysteria" that will include the best and worst gas hike news.
A few notes from today: CBS's Trish Regan seems to think $2.55 (the average price for a gallon of gas) is somehow "hovering near $3.00 a gallon." NBC explained that hybrid cars don't save any money and while ABC's Charles Gibson seems to understand that gas in some places is "well over $3.” Gibson could have noted that if gas is “well over $3” some places, it is well below the national average of $2.55 in others.
The MRC's Free Market Project is releasing a study today showing how badly the media have covered the economy during Bush's second term. The study shows that 62 percent of the broadcast network stories about the economy are negative. That doesn't sound so bad until you realize that almost half the positive stories are undermined with negative news. Reporters say that Bush isn't getting any bump from the good economy. This explains why. The networks cover negative issues like gas prices, the housing "bubble" and layoffs far more than good news like job growth, GDP growth or low unemployment.
The study itself is going out as the lead piece in the first issue of FMP's new newsletter, The Balance Sheet. Newsbusters readers can sign up for the newsletter and get access to a free special report on media coverage of business as well. The entire study will be posted on the Free Market Project site later today.
Sometimes it’s not what the networks report that is the problem. With global warming, it’s what they leave out. President Bush signed a pivotal climate change agreement on July 27 and the three broadcast networks totally ignored it. This pact even includes China and India, both of which were left out of Kyoto.
Instead of this agreement, CBS and ABC focused on the questionable link between climate change and allegedly more powerful hurricanes. For anyone who has followed this debate, the network treatment isn’t new, but it is amazing. For more, see Amy Menefee's article on the Free Market Project Web site.