The Top 10 Worst Economic Myths of 2010
Each year the Business & Media Institute looks back on the year's news and selects the top 10 worst economic myths. Here is our 2010 list:
10. GM Repayment Shows Taxpayer Bailout Worked
9. All the Economy Needs is More Stimulus
8. Soda is Like Cocaine and Ads Cause Obesity
7. Obama the Tax Cutter
6. The Tea Parties are Astroturf, but Green Groups Aren't.
5. Despite Largest Budget in History, Obama is Fiscally Conservative
4. Lack of Press Freedom in Gulf Doesn't Point to Obama
3. Nearly 10 Percent Unemployment Isn't So Bad
2. ClimateGate? What ClimateGate?
1. The Chamber of Commerce is Taking "Secret Foreign Money" for Election
10. ABC's Diane Sawyer and Media Boast about GM Repayment
Media myth: GM's bailout repayment means the taxpayer auto bailout worked.
Like a magician creating an illusion, the news media, Treasury Department and General Motors pulled one over on taxpayers in early 2010, or at least they tried to. The bailed-out auto company issued a highly misleading advertisement claiming, "We have repaid our government loan, in full with interest, five year ahead of the original schedule."
The Treasury then bragged about the GM repayment, bolstering claims that the taxpayer-funded bailout worked. In an April 21 press release, Treasury said GM "has fully repaid its debt under the Troubled Asset Relief Program (TARP). GM paid the remaining $4.7 billion of the total $6.7 billion in debt owed to Treasury." Obama economic adviser Larry Summers cited it as proof that the "politically difficult" bailout decision was correct.
All three claims were heavy on spin, yet the networks repeated them calling them a "happy surprise," and said that GM was "keeping faith with taxpayers." The three broadcast networks couldn't muster any skepticism of the GM claim, even though the truth was that the company paid off the "loan" portion of its $52 billion bailout with part of that same bailout.
Even the liberal New York Times saw through the deception, saying, "What neither G.M. nor the Treasury disclosed was that the company simply used other funds held by the Treasury to pay off its original loan." Sen. Charles Grassley, R-Iowa, caught the trick and challenged the Treasury Department calling it a "TARP money shuffle."
Unfortunately, it was no surprise that the three broadcast networks had little skepticism of GM's claim. They were looking for ways to praise the success of the auto bailout they promoted nearly two years earlier with almost three times as many pro-auto bailout stories as balanced stories (31 to 12). Only one story had an overall anti-bailout tone.
9. Media complain about stimulus running out, leaving teachers in a lurch.
Media Myth: Despite Obama's failed promises about stimulus keeping unemployment from rising above 8 percent, stimulus is still needed in 2010.
Ever since the recession was identified, the push from the news media has been more and more economic stimulus. Stimulus, reporters said, would heal the economic illness.
The biggest push was for President Barack Obama's $787 billion stimulus plan, but the media also promoted the auto bailout, Cash for Clunkers, and have called for additional spending to stimulate the economy.
Reporters like NBC's Scott Cohn warned of what might happen without stimulus in a Jan. 30, 2009, "Nightly News" report. "Economic stimulus isn't just a political debate around here. It could be a matter of survival," Cohn said.
But in 2010, the "need" for stimulus remained, according to the media. On June 28, CNN's "American Morning" lamented poor hiring prospects for teachers after thousands of layoffs. Despite unions, state budget crises and overall economic troubles, CNN blamed the lack of stimulus.
New York Times columnist Paul Krugman attempted to scare up more government spending with talk of a "Third Depression," and when Obama himself called for "continued spending to support growth" in June the news media offered support by ignoring opposition.
CNBC's Rick Santelli was one of the only media voices to oppose the spending strategy. On June 28, Santelli shouted, 'I want the government to stop spending! Stop spending, stop spending, stop spending, stop spending! That's what we want, stop spending!'
8. CNBC's Erin Burnett Says Soda is Like Cocaine
Media myth: Obesity is caused by advertising and some foods and drink are like illegal substances.
The news media love promoting food regulation about as much as kids love raiding a Christmas cookie tray. Media attacks on food and calls for regulation became even more outrageous in 2010 with comparisons between soda and cocaine, attacks on Happy Meal toys and other stories.
CNBC's Erin Burnett provided an absurd comparison to illegal drugs on Nov. 8, as she discussed the possibility of a "fat tax." Burnett asked the president of the American Beverage Association, "Let me ask you, is there anything good about drinking a full-calorie soda? Why do they even sell it? What's good for me in drinking it?"
When ABA's Susan Neely replied that "it tastes delicious" and many things are "fun to drink or eat," Burnett interrupted her to say, "I'm sure you could say we like cocaine, right, right? But we don't allow people to do drugs. Where do you draw the line?"
This year, the media also continued its criticism of food advertising. Back in June, news outlets seized on a study published in the Journal of the American Dietetic Association saying, "TV ads for food may be skewing our decisions on what we eat in powerful ways."
Find the full countdown at the Business & Media Institute website.