So much for the recovery. Even liberals admit employment is “weak,” that household wealth hasn’t recovered and consumer experts say middle-class retailers are “struggling.” But two of the three broadcast news networks have been much more focused on “proof that the economy is getting stronger,” than on economic worries since the May jobs report was released June 6.
Federal Reserve Chairman Ben Bernanke surprised some on Sept. 18, when he postponed the tapering off of its huge monetary “stimulus” policy called quantitative easing (QE). At the same time, the Fed cut economic growth forecasts. Reuters reported that “the Fed cut its forecast for 2013 economic growth to a 2.0 percent to 2.3 percent range from a June estimate of 2.3 percent to 2.6 percent. The downgrade for 2014 was even sharper.”
But Bernanke’s concerns over the state of the economy may have been shocking to viewers of CBS “Evening News” and ABC “World News with Diane Sawyer” which have aired almost twice as many positive economic stories in the past three months as negative ones (26 to 14). The MRC’s Business and Media Institute analyzed evening network news stories that mentioned economy or economics (or a variant like economies) from June 6 through Sept. 17.
BMI found that CBS and ABC were touting jobs growth in the auto industry, falling gas prices and a housing market “crackling with new energy,” among other good news during those three months. In contrast, NBC actually seemed more aware of the problems with the economy. It aired more negative economic reports than positive ones (13 to 6).
Two days before Bernanke’s remarks, President Obama touted his economic successes bragging about a “healing” housing market, lower unemployment and saving the auto industry. But at least two of the network had been promoting those same claims for months.
ABC’s “World News with Diane Sawyer” was the most upbeat (11 to 3) of all three networks. The show emphasized housing news saying that “the economy overall is actually doing better,” causing mortgage rates to rise. The show did four separate positive economic reports in July on housing alone. On July 5, Rebecca Jarvis called the rush of people trying to lock down a mortgage “The price we pay for an economy truly on the mend.” Later that month, the housing market was “crackling” with energy according to anchor George Stephanopoulos.
While ABC focused often on home sales, CBS found good news, especially in the showrooms and in auto plants. CBS aired 15 positive stories and 11 negative ones. According to the “Evening News” and its anchor Scott Pelley showrooms were “proof” of the strengthening economy.
On Sept. 6, CBS “Evening News” anchor Scott Pelley said that the auto industry was “seeing a lot of jobs growth.” Transportation correspondent Mark Strassmann interviewed Jessy Davis who had built a “career” at a VW plant in Tennessee. She testified about what the plant has meant to people who started working their three years ago: “[T]heir glasses were kind of broken and their teeth might have been a little bit frayed, kind of brown. I mean you look at them now, you know, they’ve got, like, designer glasses on. Their smiles are beautiful again, and they just -- their confidence level has changed.”
CBS found other good news too. The network noted a “big improvement in the employment picture” on Aug. 15, and “upbeat reports about the economy” on Aug. 1.
The Fed decision to not slow down QE spending was not without controversy. As of Sept. 22, the Fed owned $3.39 trillion in debt, more than “more Treasuries and MBSs than the total value of the publicly held U.S. government debt amassed by all U.S. presidents from George Washington though Bill Clinton,” according to CNSNews.com
What had all that accomplished? According to a study by economists from the San Francisco and New York Federal Reserve Banks, “asset purchase programs” like QE “appear to have, at best, moderate effects on economic growth and inflation,” Investor’s Business Daily reported. The business paper said on Aug. 20, that a study of $600 billion in QE2 spending only “boosted GDP by a mere 0.13 percentage point.” IBD criticized the Fed program for becoming “the No. 1 enabler of a spendthrift government that’s pushing us to the brink of fiscal disaster.”
Wall Street has been a fan of Bernanke’s monetary easing and initially the stock market reacted favorably to the decision not to taper QE spending. But Reuters reported on Sept. 23, that “euphoria” had started to subside “as the message the Fed was sending about a less-than-stellar economy sinks in.”
"The Fed's no-confidence vote in the economy really causes us to revisit our profit estimates for the rest of this year and next," Leo Grohowski, chief investment officer at BNY Mellon Wealth Management in New York, told Reuters. "I would not be surprised to see consensus numbers get adjusted."
Methodology: Business and Media Institute analyzed evening network news stories that mentioned economy or economics (or a variant like economies) from the release of the May jobs report on June 6 through Sept. 17, the day before Bernanke spoke. Stories that were not about the U.S. economy or some economy within the U.S. were excluded. Each was graded based on how it portrayed the economy: positively, negatively or neutrally.