Matthews Blames Tuesday's Stock Collapse on Debt Agreement, Ignores Bad Economic Data
If the economy stagnates or falters in the coming months, it seems a metaphysical certitude Obama-loving media will do everything in their power to blame it on Tuesday's debt ceiling agreement rather than any of the other factors already in play.
MSNBC's Chris Matthews gave us a foreshadowing of such deception on "Hardball" when he blamed Tuesday's stock market collapse on the newly-signed legislation rather than the bad economic data announced in the morning (video follows with transcript and commentary):
CHRIS MATTHEWS, HOST: Plus, politics aside, let’s look at what this deal did to the economy. Wow! The Dow fell 265 points today. It was down for the eighth day in a row. A first rough reaction, and not a good one, to what Congress did.
That was how the "Hardball" host teased the issue at the beginning of the program. Later he began a separate segment:
MATTHEWS: Welcome back to HARDBALL. And as you just heard, I guess, in the news today, the Dow took a beating today, perhaps a sign that the markets don’t like the debt deal. Perhaps? What, are we kidding? So is there any chance that a deal that focuses on debt and not job creation is going to help the economy in the long run or even the short run?
Joining me right now to talk about this is CNBC’s Simon Hobbs, who is great as this --
MATTHEWS: -- and MSNBC political analyst Eugene Robinson, who understands the politics. I’m setting you both up, gentlemen. And all I can ask, a simple question. The Dow Jones down 265 points today. Were there any winners in this whole kerfuffle, Simon, you first, except gold? Gold went up, which tells me nobody trusts anything except bullion.
Matthews was either being dishonest or ignorant with that last sentence, for there was another big winner Tuesday: United States Treasury paper!
As you can see from the above chart, the yield on the 10-year T-note dropped to its lowest level of the year as investors piled into U.S. treasuries in the wake of the debt ceiling agreement and as a safe haven given continued declines in global stocks.
I guess Matthews didn't want viewers to know the strong vote of confidence investors were giving America's debt.
But that wasn't the only deception, for throughout this entire eight-minute segment, Matthews never informed viewers about two disappointing pieces of economic data released Tuesday that traders felt caused the stock selloff.
As Dow Jones reported shortly after the markets opened:
U.S. stocks opened lower Tuesday as consumer spending worries trumped any enthusiasm surrounding the House passing a deal to raise the debt ceiling. [...]
Markets were disappointed after data showed Americans cut their spending by the most in nearly two years and saved at a faster rate during June, a pair of signs that underscored the economy's lack of vigor.
Spending decreased 0.2% after rising an upwardly revised 0.1% in May, according to the Commerce Department. The drop was the biggest since September 2009. Incomes rose 0.1%, after increasing 0.2% in May.
The downbeat consumer spending figures highlight another troubling aspect of the weak recovery. Last week brought news that the U.S. economy barely grew in the first half and on Monday came a report showing that manufacturing is shaky. Friday's employment report is expected to continue to show a stagnant labor market.
Notice that quite contrary to Matthews' view, Dow Jones felt the selloff was precipitated by continued bad economic news and not the debt deal.
This was echoed by MarketWatch which also expressed concern over another disappointing economic report Tuesday:
With their incomes barely rising, Americans spent less in June and saved more money, according to the latest government data.
The cautious approach of households is reflected in a spate of reports showing the economy has slowed since late spring with little evidence of a sharp rebound in sight. Unless consumers spend more, that’s unlikely to change.
In June, personal income increased a seasonally adjusted 0.1%, the smallest gain since last November, the Commerce Department said Tuesday.
Half the increase stemmed from higher government payments for social programs such as Medicaid and unemployment compensation. Wages and salaries actually fell.
Notice that last sentence: "Wages and salaries actually fell."
So, not only was it reported Tuesday that consumer spending in June declined by the largest amount in almost two years, it was also disclosed that wages and salaries fell that month.
As Bloomberg reported after the markets closed, this was a recipe for a bad day on Wall Street:
U.S. stocks tumbled, erasing the 2011 gain for the Standard & Poor’s 500 Index, after an unexpected decline in consumer spending increased concern that growth in the world’s largest economy is faltering. [...]
“We’re in a sluggish economy,” Mark Bronzo, a money manager at Security Global Investors in Irvington, New York, said in a phone interview. His firm manages $26 billion. “Now that we’ve moved past the debt ceiling fears, people are really focused on growth. The market is very unforgiving. We’re in this period where people don’t love the stock market. They think economic growth is slow. So, there’s a flight to safety.”
Quite dishonestly, Matthews didn't share any of this economic data with his viewers. He also chose to ignore positive reports from two of America's credit rating agencies (via UPI):
The United States' credit rating remains top-notch but with an asterisk, two key credit rating firms said Tuesday.
While Moody's Investor Services and Fitch Ratings both said they will keep the country's credit rating at triple-A for now, the firms said a downgrade is still possible if the U.S. financial situation deteriorates or if promised federal spending cuts don't materialize, the Los Angeles Times reported. [...]
The two credit ratings firms issued their assessments after President Barack Obama signed into law compromise legislation passed by Congress to raise the nation's debt limit and cut its budget deficit. [...]
"The fundamental economic and financial underpinning of the United States' AAA status remains strong despite the heated political debate over the role of government and how best to reduce the out-sized federal budget deficit," Fitch said.
The firm added "despite the intensity and theater of political discourse in the United States, there is the political will and capacity to ultimately do the right thing."
So, two of America's credit rating agencies chose not to downgrade our Treasury paper following the debt ceiling agreement. This should have been good news concerning this issue that warranted reporting if, of course, you were an honest journalist interested in doing honest reporting.
But that's not in Chris Matthews' Obama-loving playbook.
Sadly, this is what the public should expect in coming months: negative economic data will be blamed on this debt ceiling agreement with total disregard for the truth.
Folks like Matthews now have a way to give the President cover if the economy double-dips.
Makes you proud to be an American, doesn't it?