BMI's Top 10 Worst Economic Myths of 2009: From jobs 'saved or created' to Climategate

Each year the Business & Media Institute looks back on the year's news and selects the top 10 worst economic myths. Here is our 2009 list:

10. CBS, NY Times Support Ecuadorian Shakedown of U.S. oil company
9. Media Fail to Scrutinize Obama's Job Claims  
8. Government Stimulus is the Answer to Our Economic Problems
7. No Tax Increases for the Middle Class
6. The Recession was Over ... by July.
5. Cash for Clunkers was a ‘Success'
4. Reagan vs. Obama on Jobs: Same Rate, Different Story
3. Health Care Reform will be ‘Deficit Neutral'
2. Tea Parties aren't made up of grassroots protestors; they're just ‘Astroturf.'
1. ClimateGate

10. CBS, NY Times Support Ecuadorian Shakedown of U.S. oil company.

Media myth: Chevron is responsible for abandoned oil wells across Ecuador.

A South American country is trying to squeeze $27 billion out of Chevron for environmental cleanup from discarded oil wells - all with the help of the U.S. news media.

CBS "60 Minutes" and The New York Times took the side of "eco-radicals" at the Amazon Defense Coalition who have filed suit against Chevron, even though the government of Ecuador signed off on the company's cleanup actions more than 10 years ago.

It all began when Texaco Petroleum drilled for oil in Ecuador decades ago as the smaller part of a consortium with the state-run PetroEcuador. Oil is a messy business and when TexPet was ready to leave the country, it worked out a cleanup deal. TexPet spent $40 million cleaning up 40 percent of the sites - equal to its share of the consortium. It did a thorough job with the clean-up and the government of Ecuador signed a paper absolving TexPet of all obligations.

Since Chevron now owns Texaco, the environmental litigators have come after the company claiming that the oil wells have polluted the ground water and made people sick.

Scott Pelley's May 3 CBS report included six anti-Chevron voices versus just one spokeswoman for the company. It also ignored the corruption of the Ecuadorian courts. Pelley also used deceptive video footage - showing not the TexPet sites in question, but the government-run oil pits PetroEcuador is responsible for.

That's in part because PetroEcuador has a horrendous environmental record with more than 1,000 oil spills since 2000. In 2006, BusinessWeek said the company had "suffered an oil spill every two days this year."

The Times also stirred up hostility toward Chevron on May 15 saying, "Texaco's roughnecks are long gone, but black gunk from the pits seeps to the topsoil here and in dozens of other spots in Ecuador's northeastern jungle. These days the only Chevron employees who visit the former oil fields, in a region where resentment against the company runs high, do so escorted by bodyguards toting guns."

9. Media Ignore Failure of Stimulus Package to Stop Job Loss

Media myth: Obama administration claimed spending would keep unemployment from rising about 8 percent, but as losses climbed news outlets spun the numbers.

"For every day we wait or point fingers or drag our feet, more Americans will lose their jobs," Obama said on Jan. 8 at a speech in Fairfax, Va. At that time the unemployment rate was 7.2 percent.

Obama also claimed that the country would face double-digit unemployment without the stimulus package while the Congressional Budget Office forecast was slightly lower: 9 percent unemployment by 2010.

To boost support for his stimulus, Obama's economic team released a report that estimated unemployment wouldn't rise above 8 percent with a stimulus package, according to Associated Press. Even without a stimulus, Obama's team echoed the CBO claim that the economy would shed 3-4 million more jobs, reaching 9 percent unemployment by 2010.

By April 2009, the claim was null and void as unemployment soared to 8.9 percent (it would later climb as high as 10.2 percent). But rather than report those failed jobs numbers the media found the "silver lining."

On June 1, The Washington Post spun the projected loss of a half million jobs, saying, "Economists forecast that employers will have shed another 530,000 jobs and that the jobless rate will rise to 9.2 percent [in May], from 8.9 percent. Although those numbers are steep, they would provide ammunition for the glimmers-of-hope crowd."

Similarly, when April data was released the first week of May, The New York Times, Washington Post, CBS "Early Show," and NBC "Today Show" found the good news in the bad - the exact opposite of how they treated economic news under Bush.

None of those reports mentioned that Obama's stimulus package was supposed to prevent unemployment from rising so high.

Many in the media also accepted the administration's claim that the stimulus would "create or save" 3 million new jobs - the phrase "create or save" became an easy out as unemployment skyrocketed to 10.2 percent in October. A convenient line for the White House since it cannot be proven or disproved.

Yet, journalists reported the claims uncritically, like Charles Gibson did on May 11 and 13, saying the stimulus would "save or create one-and-a-half million jobs this year."

But as James Sherk explained for the Heritage Foundation, "it is impossible to hold the President accountable to these promises because there is no way of measuring ‘jobs saved'."

8. Stimulus is the answer.

Media myth: $787 billion stimulus needed to fix the economy.

Stimulus wasn't just supposed to create jobs. It was the jolt of cash the economy needed to get going - at least, that was the broken-record claim from the liberal news media. From auto bailouts, to the stimulus package, to cash for clunkers, to calls by some for a second stimulus; journalists had trouble finding a downside to the government's massive spending spree financed by taxpayers' dollars and debt.

Two broadcast networks - ABC and NBC - showed particularly strong support for the president by relying on pro-stimulus voices by a more-than 2-to-1 ratio (139 to 56). As reporter Scott Cohn told the NBC "Nightly News" audience about a struggling Indiana community. "Economic stimulus isn't just a political debate around here. It could be a matter of survival."

Never mind the cost to the great-grandchildren of current taxpayers, the networks didn't even bother to ask how Obama and Congress would pay for the roughly $800 billion package.

Reporters like ABC's Dan Harris turned to experts like Mark Zandi in stimulus reports. Zandi declared "we have no choice," and then backed them up saying, "Most economists agree, we have no choice."

The news media also perpetuated the myth that the $787 billion package would be spent on infrastructure. CBS's Chip Reid said on Jan. 12, "The total size of the plan is about $750 to $800 billion - roughly $300 billion is for tax cuts for businesses and individuals. The rest will be spent on everything from roads and bridges to renewable energy to create three to 4 million jobs. Republicans are raising red flags about the amount of spending."

But in reality, little more than 3 percent of the funds would be allocated to road and bridge construction.

Months later, the media were still giving Obama credit for the stimulus program. Michelle Gielan of CBS "Morning News" said on Oct. 16, "there is new evidence this morning that President Obama's stimulus program is working. Federal contractors say it helped to create - to create or save 30,000 jobs, mainly in construction."

You can find the complete list from the Business & Media Institute here.

Julia A. Seymour
Julia A. Seymour
Julia A. Seymour is the Assistant Managing Editor for the MRC's Business and Media Institute.