A recession is classically defined as two back-to-back quarters of negative growth in gross domestic product (GDP), something that last happened six years ago with the 2001 recession. So what did Witt see that portended an imminent collapse?
Well, "[f]inancial experts were blindsided by a new report today that found 4,000 jobs were cut last month. That is the first time that's happened in four years. These numbers follow another report that finds home foreclosures have hit a record high," Witt explained.
Voilà! Two scary negative statistics and there you have it, the economy teetering of the brink of utter ruin. Only, we've heard the media hype about pending recessions before. From our friends at the MRC's Business & Media Institute:
Gabriel Resources, a mining company based in Toronto, Canada, has begun to fight back against the lies and war of misinformation being waged against its proposed Romanian gold mine by leftwing billionaire George Soros. As I have written about several times on my own blog, BillHobbs.com, the poverty-stricken place village of Rosia Montana, Romania, is seeing its best-ever chance at economic progress and a better life for its people blocked by environmental groups and NGOs, and by Soros, a wealthy man who doesn't lack for things like indoor plumbing and electricity the way many of the people do in Rosia.
The New York Times, PBS and other media outlets have in recent weeks presented a false picture of the Rosia Montana project, describing it as a small village trying to fend off destruction by a big Canadian mining company. The real picture is much different - the truth is, the people of the village largely support the proposed mine, and want the benefits it will bring, and the opposition is largely non-local and heavily funded by Soros.
Much like tasty snacks, the networks can never stop their addiction to “food police” groups like the Center for Science in the Public Interest.Yesterday morning it was Good Morning America that was shilling for them, saying, “Did you realize you were paying more for less food?”
What was the target this time? The 100 calorie “snack packs,” that CSPI themselves have fought for. CSPI is upset about the cost, even though companies have gone out of their way to create less fattening snacks, (in smaller portions, and with some new recipes).
GMA reporter Elisabeth Leamy starts off the segment like this:
What happens a guy with verifiable liberal credentials (contributing editor at Rolling Stone and a contributor to The New York Times Magazine, The New Republic and Air America) just happens to have written a book highly critical of the coal industry – “Big Coal: The Dirty Secret Behind America’s Energy Future”?
But if you’re a viewer, you might not know Jeff Goodell is predisposed for a variety of reasons against the coal industry. Goodell is opposed to coal as an energy source because he believes it contributes to global warming, is not convinced technological advances will make it more environmentally friendly, thinks it is unsafe to mine and has doubts about its sustainability as a resource.
The powerful "manufacturing is in decline" meme won't go away soon, but it should.
It apparently isn't enough that the Institute for Supply Management's Manufacturing Index has read "expansion" in 48 of the past 50 months. It has become an article of faith among reporters and opportunistic politicians that American manufacturing has been, and continues to be, in a long-term decline.
The fact is that government reports also show the exact opposite. Why apparently no one, including the sector's supporters, has done, or at least published, the simple math involved to debunk the myth of "deindustrialization" is indeed a mystery.
There has been support by anecdote. For example, on August 6, Joel Kotkin, a presidential fellow in Urban Futures at Chapman University, wrote an op-ed piece for the Wall Street Journal ("The Myth of Deindustrialization"; link requires subscription). His column led as follows:
The Los Angeles Times reported a run of Countrywide Bank by its customers as more and more are panicked about the potential of the nation’s largest home lender to go bankruptcy – something fueled by many of the reports in the media.
“[S]ales of existing homes fell in 41 states from April through June,” said CBS correspondent Susan McGinnis on the August 16 “The Early Show.” “Meanwhile, foreclosures continue to soar. And there are growing worries about the nation's biggest mortgage lender; Countrywide Financial could be forced into bankruptcy.”
But some experts seem to think this scare from the media over Countrywide’s bankruptcy is a little premature.
In a recent blog post by CBS Evening News correspondent Cynthia Bowers we find that she has had some problems with the housing market herself. Bowers apparently didn’t grasp the fact that her Adjustable Rate Mortgage (ARM) can actually adjust:
“For a while we were okay. Then that Fed rate started going up, and so did our ARM. Over a five-month period it increased the cost of our monthly mortgage by nearly 40%!” Bowers wrote.
But Bowers shouldn’t have been surprised about her rate adjustment. According to Nexis, Cynthia Bowers has been reporting on the mortgage and housing market since at least 1997. With a decade of industry reporting under her belt, you’d think she’d be able to anticipate the fact that rates shift and payments adjust.
Matt Damon dressed as gas pump? Ben Affleck as an ear of corn? No, it’s not “Good Will Hunting,” the sequel. It’s a new set of videos promoting ethanol mandates on the Web site cleanmyride.org.
The Clean My Ride site is run by the Center for American Progress Action Fund, an arm of the liberal think tank Center for American Progress. The purpose of Clean My Ride is to urge Congress to mandate ethanol as a fuel.
Earlier this week, NBC’s Lee Cowan admitted it was ethanol’s fault milk prices were “skyrocketing.” So which is it? Do environmentalists want better gas mileage or cheaper milk?
One of the other main points of the Web site is to try and get people to stop “running scared from Big Oil.” The first video, which features Affleck in a corn costume – it’s better than “Gigli” – even shows a sequence where “Big Oil” executives are chasing down an ear of corn and then bludgeoning it to death.
Today's Washington Post story about the latest legal filings in a securities case echoes the bias of liberal blogs and publications on the case.
The Post leads the story this way:
The Bush administration yesterday sided with accountants, bankers and lawyers seeking to avoid liability in corporate fraud cases, arguing that investors must show they lost money after relying on deceptions by third parties in order to proceed with private lawsuits.
"The Bush administration yesterday sided with U.S. manufacturers and their 14 million employees, arguing against a reinterpretation of securities law that could lead to an explosive rise in litigation."
CNBC’s Jim Cramer went on an impassioned rant August 6 calling for the Fed to reduce interest rates.
“Bernanke needs to open the discount window. That is how bad things are out there … in the fixed income markets we have Armageddon,” said Cramer on “Stop Trading!” Following Cramers’ rant, NBC brought him on “Today” to analyze the economy August 10.
NBC’s Meredith Vieira asked “Are the markets about to crash?” on the August 10 “Today” show.
At OpinionJournal.com on Thursday ("Fair but Unbalanced -- How the media promote false pessimism about the economy"), Brian Wesbury, who has written several times on the disconnect between the strong economy and the public's perception of it (previous references here, here, here, here, and here), had another generally stellar column about what is nonetheless a relatively small piece of the problem.
Wesbury ascribes much of the disconnect to TV's need for "balance," when giving positive and negative views equal weight is often in reality unbalanced:
If one guest or expert is a "bull," then the other must be a "bear," to keep things fair. Or, if there is a single guest on air, the host often takes the other side of the issue in order to keep things balanced. Get some sparks between guests, a little argument here or there, and it's even better for the ratings. The bigger the audience, the better the show, that's the way the advertisers see it. It's basic supply and demand.
But this idea of presenting both sides of an issue, while entertaining, informative and seemingly balanced, may paradoxically create a warped perspective of the economy.
The media have found their new poster boy to rail against the coal industry.
MSNBC's "Countdown with Keith Olbermann," but with Allison Stewart filling in for an absent Olbermann, had anti-coal liberal Jeff Goodell, author of "Big Coal: The Dirty Secret Behind America's Energy Future" on the show.
Unsurprisingly, he criticized the company involved in the Utah mine collapse, as well as its CEO, Chairman of Murray Energy Corp. Bob Murray.
"He is a sort of embodiment of a sort of 19th century kind of coal baron kind of guy," Goodell said and pointed out Murray is "a big donor to the Republican Party" and "sort of notorious with journalists."
Goodell also doubted Murray's claim that the collapse was caused by an earthquake.
The Kids Are All Right Economic literacy test: High school seniors beat Congress.
Excerpts (bold is mine):
Since its founding in 1969, the NAEP has become something of an annual exercise in American educational masochism. Last year, only 54% of students met NAEP's "basic" standard--the equivalent of a passing grade--on the science test. The previous year tested history; a mere 47% passed. But when knowledge of economics was tested this year, well, let's just say the supply curve shifted. NAEP reported this week that 79% of twelfth graders passed this first-ever national economics test. Holy Hayek.
..... The depth of knowledge shown by ordinary seniors suggests that they have been able to absorb basic economic truths from their daily experiences. Now, if this wisdom can only survive four years of instruction by your average college faculty.
As six miners are trapped in a collapsed coal mine ABC “World News Tonight with Charles Gibson” took it the opportunity to kick the coal industry while it was down – but this time in the name of global warming.
“The criticism of coal is that it’s a dirty energy source. Although many of the pollutants are being scrubbed out – it’s still high in carbon, the greenhouse gas blamed for global warming. The industry is promising some new expensive technology to remove that carbon.” said ABC correspondent David Kerley on August 8
The lesson from this post isn't bias as much as it is making sure not to get taken in by Old Media overreactions.
Jim Cramer of CNBC's "Mad Money" went mad on Friday, declaring Armageddon in this video rant on Friday (watch the whole thing to see just how out-of-control he was; his declaration is at 1:40 in the vid -- "in the fixed-income markets, we have Armageddon.").
The first trading day after Cramer's declaration of Aramageddon went thusly (from a CNN e-mail after the markets' 4PM close):
One of the Associated Press's earliest articles following Friday morning's release of the government's Employment Report, which showed July's unemployment ticking up 0.1% to 4.6% and new jobs increasing by 92,000, had this outrageous paragraph (backup link is here in case the article is revised or removed; bolds are mine):
Construction companies slashed 12,000 jobs in July. Manufacturers shed 2,000 and retailers cut a thousand. Some 28,000 government jobs were eliminated. In contrast, education and health care added 39,000. Leisure and hospitality expanded employment by 22,000. Professional and business services added 26,000 new positions.
Note that AP uses violent terminology to describe relatively modest decreases in employment caused by (apparently evil) private-sector employers, while it applies relatively bland verbs to much larger private-sector increases. Meanwhile, the description of the large reduction in government jobs slips into passive voice, with no perpetrator identified. Zheesh -- How obviously biased can you get?
More discussion, this week's winner, and a chart comparing Bush 43 and late Clinton-era economic performance are after the break.
Robin Hood would be proud of the Washington Post’s perverted view of capital gains taxation. If the newspaper has its way, he wouldn’t have to steal from the rich to give to the poor. The government would be doing it for him.
Calling it the “most controversial tax break on Wall Street,” the Post promoted the idea of wrongdoing:
“[It] is not authorized by any law and was never approved by Congress,” wrote the Post.
Our TV network media personalities really want you to believe they can relate to the average American. After all, when you’re a high-minded soldier fighting on the side of the proletariat, it’s important to be a victim of the economic injustices you bring to light, right?
Not so fast. It turns out some of the most prominent journalists are doing quite well, according to the July 26 TV Guide. Early this year, a Business & Media Institute report exposed the “income inequality” talking points of the news media. Some journalists continue to attack the wealthy and complain about the downtrodden “middle-class” despite their own $3, $8 and $15 million salaries.
“NBC Nightly News” anchor Brian Williams has been highly critical of CEO compensation, referencing “stratospheric sums some CEOs make” and complaining about “golden parachute[s].”
On this morning's Today show, NBC's Meredith Vieira and Dr. Nancy Snyderman became born-again libertarians in their opposition to New York City's ban on bottle feeding babies. Vieira called the measure "drastic" and Snyderman urged, "not so fast." The ban even inspired "Today" to coin a new series segment called "Nanny State." However, back in 2006, when New York City infringed on another right - the right to eat fatty foods, Snyderman struck a different tone, as she gravely warned about the dangers of trans fats.
First up Vieira opened the bottle feeding ban segment on the August 2, "Today" this way:
According to CNN business reporter Ali Velshi, the relationship between oil and gas prices is difficult to grasp.
"A lot of folks are saying, 'Why have my gas prices come down 17 or 18 cents in the last couple weeks when oil prices are going up?'" said Velshi on the August 1 "American Morning."
Trust me Ali, that's not what I've heard at the pump.
"Well, I hope we've all figured out there's no way, there's no mathematician in the world who can figure out the relationship between gas and oil prices, but you can expect with oil up at 78 bucks a barrel, gas prices will soon follow and that takes things—that takes money out of the pockets of consumers who keep this economy going," he continued.
But Velshi, has not always had such a tough time making sense out of oil and gas economics.
Consumer confidence hit a six-year high in July, a widely watched gauge of sentiment showed on Tuesday, as Americans shrugged off falling home prices to focus on a healthy jobs market, instead.
The New York-based Conference Board said that its Consumer Confidence Index, rebounded to 112.6, its highest level since August 2001 when it recorded a 114.0 reading. That compared to a revised 105.3 in June. The July 24 cutoff for the preliminary survey of 5,000 U.S. households was before last week's stock market tumble, however.
It has to. A six-year high is bad enough; we surely can't afford to let the index get to an 8-year high, or someone might get the mistaken idea that the current economy is as good as or (heaven forbid) even better than the Golden Age of the 1990s (even though by a couple of respected measures it is).
“News that gasoline prices are falling usually comes with a warning – don’t get used to it,” said “CBS Evening News” anchor Katie Couric. “So consider yourself warned as we tell you gas has fallen 17 cents the past two weeks to a nationwide average tonight of $2.88 a gallon. That is the lowest price in three months.”
That’s right, Katie. When it comes to gasoline prices and the CBS “Evening News,” they’re either high or probably going to get higher.
"Evening News" ignored the initial drop in gasoline prices last week.
“Don’t let that scenic [Aquafina] logo fool you, this water is not bottled from a mountain stream,” said Rob Marciano CNN’s “American Morning.”
Aquafina, the country's best-selling brand of bottled water, was portrayed as shamefully dishonest by "CBS Evening News," "NBC Nightly News," ABC "World News with Charles Gibson" on July 27. And by the July 30 "American Morning."
PepsiCo, the bottler of Aquafina, was under attack the day it announced labeling changes for the product from "P.W.S." to "Public Water Source."
Nets Barely Notice Surge in GDP as They Focus on Dow Plunge
The ABC, CBS and NBC evening newscasts on Friday all devoted full stories to the fall in the stock market, touted as "the worst two-day point drop for the Dow in five years," but barely had time for a sentence about the 3.4 percent second quarter jump in the GDP, the biggest in over a year. In fact, neither ABC nor NBC cited the specific 3.4 percent rise in the Gross Domestic Product, the measure which the AP on Friday described as the "best barometer of the country's economic fitness." Not one of the three evening newscasts mentioned how the Dow is still well above the 13,000 level it broke through in April and none noted fresh good news on inflation.
Not even reporting what second quarter GDP growth actually was (repeat: 3.4%) is flat-out negligence.
Last week's economic report couldn't have been much rosier. The economy grew at a faster-than-expected rate, faster than any time in over a year. But far from sparking runaway prices, inflation actually moderated.
But that didn't stop the Axis of Gloom, AKA the New York Times and its Beantown subsidiary the Boston Globe from publishing op-ed items this morning finding the cloud on the silver lining. A lugubrious Times editorial laments:
By the end of last week, any lingering hope that the housing downturn would be contained had vanished. As this week begins, signs of contagion seem to be everywhere . . . The fallout of housing-related turmoil is also likely to extend beyond financial markets.
The editorial ends with a call for closer monitoring of hedge funds.
Over at the Globe, liberal economist Robert Kuttner [pictured here] emits a sky-is-falling column "The crash that could come."
A week ago, NewsBusters editor and MRC vice president Brent Baker noticed that ABC had a decidedly negative slant on the Dow Jones industrial average closing above 14,000 points, much the same as it did in April, when the DJIA cracked 13,000.
In his Sunday Business section story for the New York Times, "Did McDonald's Give In to Temptation?" reporter Andrew Martin took a surprisingly moralistic look at the corporation's new menu.
One wonders what the paper's beef is with McDonald's, which after all provides safe, inexpensive food to the lower-to-middle-class section of society the Times claims to care about (and convenient bathroom facilities for the homeless, at least in Times Watch's neck of the woods). But apparently some things can't be forgiven. The source of the Times' angst? McDonald's is re-introducing its giant-size soda under a new name, "The Hugo."
"It wasn't too long ago that the only thing McDonald's seemed good at was making people fat.
Ali Velshi needs a teleprompter. Maybe then he wouldn't misstate corporate earnings by billions of dollars.
“ExxonMobil reporting quarterly earnings of $10.26 billion a share, John. We’re on this and we’re going to continue to find out where that money is being made,” said Velshi during the 8 a.m. hour. of the July 26 CNN "American Morning."