It's hard to imagine an economist being provocative, but Paul Krugman, a Nobel Prize winner, has managed to do so.
In his June 28 New York Times op-ed, Krugman argued that since governments around the world aren't willing to double-down on Keynesian policies meant to stimulate the global economy, the United States and the rest of the world are facing a third depression. But on CNBC's June 28 "The Kudlow Report," host Larry Kudlow asked if Krugman's premise were true, how come none of the measures being applied, which Krugman advocates more of, have failed to have any effect on the current economy.
"Steve Forbes, I want to focus this, coming out of G-20," Kudlow said. "Paul Krugman's remarkable op-ed today in The New York Times - he says, we are already in the early stages of a depression. He calls it the third depression in U.S. history. He says that it's primarily a failure of policy. But, Steve, the so-called spending cuts or tax increases or deficit reduction hasn't happened yet. In the last two years, we've had gargantuan spending and ultra-easy money which is what Professor Krugman has been advocating the whole time. And he still thinks we're in a depression. So I need to ask you, maybe his policies are what threaten the depression."
Forget about the riots in Greece over a social welfare system the government couldn't maintain or a $1.4 trillion annual U.S. budget deficit. Krugman claimed that the threat of deflation supersedes both of those results of runaway government spending - that is higher taxes in the long run and a debt to future generations.
In his June 28 column for The New York Times, Krugman wrote: "We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost - to the world economy and, above all, to the millions of lives blighted by the absence of jobs - will nonetheless be immense."
George Will on Sunday gave a much-needed economics lesson to New York Times Washington correspondent David Sanger that greatly demonstrated the difference between how conservatives and liberals view unemployment benefits.
As the Roundtable segment of ABC's "This Week" shifted to the G20 summit in Toronto, Sanger said, "Just the day before [Barack Obama] left, Congress could not come to an agreement on a very small extension of unemployment benefits, you know, the most basic stimulus effort that the President tried to push."
Host Jake Tapper asked, "George, why can't they pass this extension?"
With the ball sitting up nicely on the tee, Will smacked it out of the park (video follows with transcript and commentary, relevant section at 4:10):
On Thursday, a new unemployment bill died in Congress as Senator Ben Nelson (D-Neb.) joined Republicans on the grounds that government spending can't go on forever.
Instead of reporting both sides, the media couldn't seem to hide their anger.
The bill was called a "jobless aid" package that "governors were counting on" to help "the poor" across the nation. Almost all news reports began from the Democrat perspective and waited several paragraphs before weakly defending Republicans.
Worse yet, a consensus with far more damaging impact began to grow: the loss will cause the nation's economy to fall into a double dip recession, and it will be entirely the Republicans' fault.
Never mind last year's stimulus bill worth $700 billion, or the bank bailout of 2008, both of which have failed to live up to promises of recovery. No, our economy is suffering because fiscal conservatives won't spend even more.
Imagine you're representing the AFL-CIO, going on Fox News and trying to make a case that the $787-billion stimulus last year wasn't nearly enough and that more is needed, despite the prevailing argument being that Keynesian economics doesn't work based on this example.
Well, Ron Blackwell - the chief economist for the AFL-CIO faced that on the June 25 broadcast of Fox News' "Your World with Neil Cavuto." Cavuto, asking some honest questions, pressed Blackwell, who was attempting to make the case for more stimulus, as to why the idea of more government spending to help the ailing economy was a legitimate one.
"You're not creating the jobs, with all this money you're wanting us to spend - then why should we keep digging?" Cavuto asked. "What's wrong with saying let's put the shovel down - that's not working?"
That's the theme of author John S. Cohoat's new book "No Thank You, Mr. President," which tells the story of 10 private companies in Elkhart County, Ind., that made their own way to economic recovery without government handouts.
"My hope is that these stories provide some inspiration for you or make you remember why our capitalist economic policies and truly American way of life is the answer," Cohoat wrote in his first chapter, titled ‘Why This Book? Why Now?'
Cohoat characterized Elkhart County, in the northern part of the state near South Bend, as a hard-nosed area able to take care of itself. His portrayal stands in contract to the national media's portrayal of the county as the "poster child for all that is bad with our economy."
On Friday's Situation Room, CNN's Jack Cafferty tossed cold water on the Obama administration's "recovery summer" claims, stating that the "current recovery has been one of the worst for job creation ever." Cafferty also criticized the dangerous growth in the national debt, underlining that there "appears to be a rather serious disconnect," as the President requested billions in additional spending.
The CNN commentator began his 5 pm Eastern hour commentary with a contrast between Obama's "massive P.R. campaign" touting the apparent effectiveness of the $860 billion "economic stimulus bill" and the continuing high unemployment figure: "President Obama and Vice President Biden have kicked off a massive P.R. campaign, celebrating what they're calling 'recovery summer'....But the celebration may be premature. Just yesterday, the Labor Department reported new claims for jobless benefits jumped by 12,000 last week- much sharper increase than was expected."
Cafferty touted a recent editorial in the Washington Times which "suggests the administration's 'make-work' jobs program has failed, and that those infrastructure jobs, which are being funded by the taxpayers, will disappear when the stimulus money runs out- soon." He bluntly continued, "Fact is the current recovery has been one of the worst for job creation ever."
Real Clear Politics currently has a video highlighting statements by Democratic Congressman James Clyburn Jr. of South Carolina. It teases the video with a question asked by Candy Crowley of CNN.
Once one sees the entire sequence, it's clear that Clyburn really answered Crowley's question before she even asked it.
Here's the full transcript of the vid, which begins after Indiana Republican Congressman Mike Pence had apparently made some points about how steps taken by the Obama administration to revive the economy to the point where it generates meaningful job growth aren't working. Clyburn's answer to when his party will stop blaming Bush is in bold:
Clyburn: Uh, Congressman Spence, uh, Pence keeps talkin' about, uh, the fact that, uh, we are, uh, failing in our approach. We all know exactly what this president inherited, and we will stop talkin' about that inheritance, uh, when uh Congressman uh Pence and others stop talkin' about takin' us back uh to those failed policies.
The establishment press is either getting tired of being beaten up over using the U-word ("unexpectedly," or sometimes "unexpected") to the point of excess when economic news disappoints, or has itself wearied of using the word.
Retail sales plunged in May by the largest amount in eight months as consumers slashed spending on everything from cars to clothing. The big drop raises new worries about the durability of the economic recovery.
Appearing on Monday’s The Colbert Report on Comedy Central to promote his book, "The Promise," MSNBC political analyst Jonathan Alter – also of Newsweek – asserted that President Barack Obama had "prevented another Great Depression," and declared that Obama had it more difficult than Franklin Delano Roosevelt because he had to "sweep up" like a "shovel brigade" after President Bush, as he used a word that had to be bleeped out for airing. Alter: "He proceeded to make history almost right away, not only because he was the first African-American elected President ... we were all living history. This man prevented another Great Depression."
He soon added: "At the beginning, FDR only had to deal with domestic problems. Obama was left to run what you could call a shovel brigade, you know, the guys who sweep up after the elephants when the elephants leave their s- (BLEEP) all over the circus, right? ... Roosevelt didn't have to deal with foreign policy when he became President. Obama had to deal with a whole nother mess, one of Bush's messes, in Afghanistan."
The federal government saw its tax collections fall by almost 20% in fiscal 2009 compared to fiscal 2008. Through the first seven months of the current fiscal year, year-over-year collections were down by another 4.5%.
New York Senator Charles Schumer (pictured at right; obtained from wbng.com) is desperately searching for another way to fleece taxpayers (because cutting spending is of course out of the question), and has come up with a "brilliant" idea. An unbylined Associated Press story gives Schumer's idea, a foreign call center tax, undeserved cover by going back to seven year-old information about industry job losses that doesn't reflect current conditions.
Here are the first five paragraphs from the AP story, followed by a later paragraph containing the outdated information:
Schumer wants to slow exodus of US call centers
In an effort to slow the exodus of U.S. telephone work to overseas services, Sen. Charles Schumer is introducing legislation that would impose an excise tax on companies that transfer calls with American area codes to foreign call centers.
Update - 5/27, 3:08 PM | Lachlan Markay: A new Harvard study finds that increased government spending actually reduces economic activity, contradicting the basic premise behind CBO's assumptions. Details below.
Good economic news is so rare for the current administration, that when some does emerge, many in the media parrot it as fact without really examining the claims that undergird it. New CBO numbers on the stimulus, for instance, have been trumpeted as proof the legislation at least helped, despite the fact that the numbers have little to no basis in reality.
Congressional Budget Office models are based on the assumption that stimulus spending will create jobs. They assume the conclusion they purport to demonstrate, and then claim they've demonstrated it. But if the model is inaccurate or simply based on false premises, it simply goes on tallying jobs "created or saved" without regard to the actual employment rate.
In March, a reporter asked CBO director Doug Elmendorf: "If the stimulus bill did not do what it was originally forecast to do, then that would not have been detected by the subsequent analysis, right?" His response: "That's right. That's right." Yet despite those numbers' disconnect from reality, the media continue to report them as fact, and proof that the stimulus is working.
The New York Times's former Middle East Bureau Chief thinks violent revolt is a laudable response to economic woes, and that murder is at least acceptable in pursuit of a far-left agenda. The media so concerned with the potential for violence from conservative groups are completely silent.
"Here’s to the Greeks," wrote Chris Hedges at Truthdig.com. "They know what to do when corporations pillage and loot their country." Riot, by Hedges's account, is the correct response. That the riots in Greece have so far killed three innocent people doesn't seem to bother him.
Oh but it's not violence borne of a frustration with an unsustainable welfare state that finally reached the inevitable conclusion of skyrocketing public benefits coupled with a fast-shrinking population. No, the riots are "a struggle for liberation" against the oppressive bourgeoisie (capitalists). Hedges is advocating in no vague terms mass political violence. The response from the media: crickets.
On Saturday’s Huckabee show on FNC, as the show was broadcast from Las Vegas, singer Wayne Newton appeared as a guest to discuss the economic situation in the city, and, when asked by host Mike Huckabee his reaction to President Obama’s remarks from last year attacking businesses for indulging in trips to Las Vegas, Newton did not mince words: "I think that it was the most irresponsible, arrogant thing I have ever heard a President of the United States say."
Fellow guest and Nevada Governor Jim Gibbons related that hundreds of conventions were canceled after the President’s words, costing the city a fortune in lost business: "There's no doubt that the people of Las Vegas, the city of Las Vegas were severely hurt by the President's remarks. About 400 conventions, business meetings, and that were canceled because of his remarks; $100 million was lost by the community at that remark. People lost their jobs. This city took a real blow when the President made that remark. He was wrong then, and then he said it again, and I don't understand why he keeps picking on Las Vegas."
Newton jumped in again and suggested that the President has been hypocritical in holding political fundraisers in Las Vegas: "He was not so incensed with Las Vegas, that he then decided to come here and do two fundraisers."
Below is a transcript of the relevant portion of the Saturday, May 22, Huckabee on FNC:
Believe it or not, there are some who still fail to grasp the notion that the legacy media are overwhelmingly liberal. They act shocked when the media do what they usually do -- toe the liberal line -- and search in vain for some way to explain the apparent bias.
"Does the Media Care About Unemployment?" asked Kevin Drum, a writer for the liberal Mother Jones. Drum postulated that that "the media focused way more on economic hard luck stories in the early 80s than they do now."
While a liberal noting the double standard is refreshing, Drum went on to attribute it to a litany of possible reasons, all the while ignoring the obvious, and painfully simple answer right before his eyes: as B. Daniel Blatt writes, "Because a Republican’s Not in the White House."
The comparison of the results contained in the April 2010 Monthly Treasury Statement released this afternoon to April of last year is bad enough. But if the American people knew that April 2010 came in about a quarter-trillion dollars worse than both 2007 and 2008 with almost 40% less in tax collections, most of them would be appalled. Many more than are already doing so would be questioning what in the heck this administration and Congress are up to.
That's why you probably won't see establishment media outlets like the Associated Press go back more than one year in their detailed comparisons, even though during the presidency of George W. Bush, writers like the AP's Martin Crutsinger and others frequently went back to fiscal 2000 and 2001 to remind readers of the surpluses that occurred during those fiscal years. The intent, of course, was to imply that things were just peachy keen under Bill Clinton until the eeeeevil Bush ruined everything. As noted later, that ain't so.
Here is the AP's Crutsinger on today's Treasury Statement, blissfully pretending, with the exception of one cryptic reference, that the two high-collection Bush years neeeeeeeever happened:
Jeanne Sahadi at CNNMoney.com has finally realized Social Security needs urgent reform - and by reform, she means going after the wealthy, of course.
On Monday, Sahadi reported on news from the Congressional Budget Office that Social Security is dipping into savings already this year and will not be able to meet its obligations by 2037. That's at least 15 years earlier than what the CBO had predicted during the last administration, and with 27 years to go it's entirely possible the deadline will move again, especially if the current recession persists.
But Sahadi wasn't worried. In fact, she began her piece by saying "it should be a snap" to rescue the program from bankruptcy.
After blissfully assuring readers that Social Security will be fine for another 27 years, Sahadi offered three easy-peasy steps that could be enacted over time to make the program solvent. Sadly, those three ideas were all too predictable:
The man who predicted the bursting of the housing bubble as well as 2008's economic collapse says that what happened in the markets around the world today is just the next stage in the financial crisis.
"The first stage was this massive re-leveraging of the private sector that led to the financial crisis and which has responded now with a massive re-leveraging of public sectors with budget deficits of the order of 10 percent," Nouriel Roubini aka Dr. Doom told CNBC's Maria Bartiromo.
"So I think that the markets are realizing that we have socialized a lot of the private losses with unsustainable fiscal deficits."
He believes the bond markets in parts of Europe seriously began realizing the depth of the problem today cautioning, "And soon enough they're going to wake up in the United States" (video follows with partial transcript and commentary):
In the past 20 months, liberal media members have routinely blamed 2008's financial crisis on George W. Bush, Republicans, Wall Street, and greed.
Someone that has hardly ever been accused of having a hand in what led to the tumult is former President Bill Clinton.
As NewsBusters has been reporting almost since the crash began, it was Clinton who signed into law two key bills -- the Financial Services Modernization Act of 1999 and the Commodity Futures Modernization Act of 2000 -- that ushered in the malfeasance that almost toppled the world economy.
On Saturday, a former editorial page editor for the Wall Street Journal, George Melloan, made the connection even stronger as he pointed a finger at someone most in the media have shamelessly given a pass for his involvement in this crisis (h/t @RLMcMahon):
The Pentagon rescinded the invitation of evangelist Franklin Graham to speak at its May 6 National Day of Prayer event because of complaints about his previous comments about Islam.
The Military Religious Freedom Foundation expressed its concern over Graham's involvement with the event in an April 19 letter sent to Secretary of Defense Robert Gates. MRFF's complaint about Graham, the son of Rev. Billy Graham, focused on remarks he made after 9/11 in which he called Islam "wicked" and "evil" and his lack of apology for those words.
Col. Tom Collins, an Army spokesman, told ABC News on April 22, "This Army honors all faiths and tries to inculcate our soldiers and work force with an appreciation of all faiths and his past comments just were not appropriate for this venue."
President Obama has extensive ties to Goldman Sachs. Yet even given record-breaking financial contributions and sketchy relationships between Goldman executives and Obama officials at the highest level, the mainstream media will not afford Obama the same scrutiny it gave to George W. Bush during the collapse of Enron.
Obama's inflation-adjusted $1,007,370.85 in contributions from Goldman employees is almost seven times as much as the $151,722.42 (also inflation-adjusted) that Bush received from Enron. Goldman was one of the chief beneficiaries of the TARP bailout package -- supported by then-Senator Obama -- and has been a force for -- not against -- Democratic financial "reform" proposals currently under Senate consideration.
Despite the extensive connections between President Obama and Goldman Sachs, the same media that vaguely alleged unseemly connections between the Bush administration and Enron after its 2001 collapse have barely noticed the Obama administration's prominent ties to Goldman (h/t J.P. Freire).
On the surface, it's one of the Associated Press's better dispatches from the real world on the state of the economy as people are experiencing it.
Datelined in Twinsburg, Ohio, Megan Barr's Monday morning report, "Recession is ending? Some Americans don't buy it," does a good job of mixing macro and micro elements, painting a picture of a struggling town, a non-improving state economy (now eighth-worst, according to AP's "economic stress" measurement tool), a somewhat-improving national picture, and a pervasive belief on the part of most Americans that things aren't really getting better. I couldn't help but notice the irony that AP reporter Jeannine Aversa, who wrote that the top economic story of last year was the economy's "fall - and rebound," contributed to Barr's report.
But something was done to Twinsburg a year ago that goes a long way towards explaining why many people there are likely responding as one quoted resident did -- "Who are they trying to kid?" -- when asked for a reaction as to whether the economy is getting better. The AP didn't cover that story last year -- and should have -- so it didn't know that it should have referred it this year.
The media is still having trouble understanding the Tea Party movement and what it is protesting, even though its roots are clear.
On Feb. 19, 2009 during CNBC's "Squawk Box," Rick Santelli made his famous rant heard around the world, calling for a so-called tea party-style revolt. And that helped fuel the growth of a Tea Party movement that has resulted in more than 600 protests this April 15, 2010.
Santelli's call for protest wasn't about high taxes. Instead, it was a cry against the Obama administration's plan for a taxpayer-funded mortgage bailout. The very beginning of the tea parties was about bailouts and the growth of government.
But the Associated Press still seemed to miss the point about worries over an overspending government in an April 15 article by Calvin Woodward about the Tea Party rallies. In that report, Woodward defended Obama's tax policies.
"Lost in the rhetoric was that taxes have gone down under Obama," Woodward wrote. "Congress has cut individuals' federal taxes for this year by about $173 billion, leaving Americans with a lighter load despite nearly $29 billion in increases by states. Obama plans to increase taxes on the wealthy to help pay for his health care overhaul and other programs."
Whenever you are bored or in need of a good laugh, help yourself to some mainstream media coverage of the economy under President Obama.
Each month we at NewsBusters wonder how the recession will be spun anew, and each month news outlets act with increasing hilarity.
First up for April was an earnest little piece by USA Today writer Matt Krantz published Thursday. Krantz insisted on reporting "optimism" and "confidence" in the economy thanks to a phantom supply of "new jobs."
Just one little problem, though: Thursday happened to be the same day the Department of Labor announced a surge in unemployment claims that hampered the stock market.
But no matter to Krantz. You see, Krantz wasn't talking about new jobs that actually existed - he was celebrating an announcement from two companies that they would be strong enough to hire a few people sometime in the future.
NBC host Norah O'Donnell is taking it from all angles for pulling the race card on Newt Gingrich last Friday.
Speaking at the Southern Republican Leadership Conference, Gingrich said "shooting three-point shots may be clever, but it doesn’t put anybody to work,” referring to President Obama's basketball skills. Norah O'Donnell embarrassed herself Friday by claiming the comment had racial undertones.
Since then, commentators on the left and right have criticized O'Donnell's race-baiting. Bill O'Reilly and Juan Williams have both condemned her remark, and Gingrich himself has repudiated the accusation.
"The left is becoming a parody of itself," Gingrich said Tuesday morning. He added that "it's relatively hard to go from 'we need someone who is a good president more than we need three point shots' to" racism.
The anchor of "NBC Nightly News" asked just that question, pointing out the cover of the April 19 issue of Newsweek magazine that pronounced "America's Back!" On his April 12 broadcast, Brian Williams asked CNBC's David Faber if it was a little premature to make that declaration.
"I'm looking at the copy of Newsweek magazine out today," Williams said. "It says America's back and we have this classic disconnect. We hear numbers out of Wall Street. We see covers of magazines like that. People watching at home, millions of people in the grips of unemployment and poor financial times wondering when they're going to start feeling some of this."
A little over a year ago, President Obama signed into law the $787-billion stimulus legislation that was supposed to prevent the unemployment rate from exceeding 8 percent. And although the unemployment has receded some from its high, it's still well North of 9 percent. So if that stimulus is given more time, will unemployment improve?
Last week's jobless claims numbers, showing a stagnant unemployment rate of 9.7 percent, didn't provide any reason for optimism. And on CNBC's April 12 "Squawk Box," host Joe Kernen asked CNBC CME Group floor reporter Rick Santelli if this economic indicator is going to be stubborn number, which would confirm a failure of Obamanomics.
"Rick, I wasn't here last week when that claims number came out. But if I could really just dig deep down into your view, do you think a year from now we're still going to be talking about a stubborn unemployment rate, Rick?" Kernen asked.
Pop quiz: how do you cut taxes on low and middle-income wage earners and end up with a greater percentage of people paying taxes?
Such is a question the folks at the Associated Press should be asking themselves concerning a piece the wire service published Wednesday entitled "Nearly Half of US Households Escape Fed Income Tax: Recession, new tax credits have nearly half of US households paying no federal income tax."
In the same paragraph, author Stephen Ohlemacher predictably bashed former President George W. Bush's tax cuts that were "generous to wealthy taxpayers" while he applauded "tax cuts for low- and middle-income families, which were expanded when Obama signed the massive economic recovery package last year."
There's only one problem with this premise - the net result was that a higher percentage of people paid federal income taxes in Obama's first year in office than in Bush's last:
Is it possible to be so wrapped up in a media culture that one could minimize a sacred religious holiday in a shoddy attempt to write a clever headline? Mediaite's Tommy Christopher and his editors seemed to have pulled this feat off.
Christopher, who has had a much-publicized run-in with Andrew Breitbart, has a new hero, former American Enterprise Institute scholar David Frum. Christopher elevated Frum to messianic status in a Good Friday April 2 post headlined "Did David Frum ‘Die' For GOP's Sins?" specifically praising the former AEI scholar for his appearance on Comedy Central's April 1 "The Colbert Report."
Sometimes, certain claims made by establishment media reporters or people who are quoted don't pass the smell test. Then, when you dig in, to borrow a phrase from Michael Savage, the stench makes you clench.
Such is the case with a front-page story ("Number of People Living on New York Streets Soars") that went up online at the New York Times late Friday, and appeared in its Saturday print edition.
Reporter Julie Bosman opened fairly enough with this paragraph:
The Bloomberg administration said Friday that the number of people living on New York’s streets and subways soared 34 percent in a year, signaling a setback in one of the city’s most intractable problems.
The New York City Department of Homeless Services’ Homeless Outreach Population Estimate (HOME) is conducted in late January each year. It’s almost as if Bosman and/or her editors thought that this opening statement was too strong and needed some seasoning; after all, you-know-who’s administration in Washington was overseeing the economy during the entire period in question.
So take a look at how Bosman, with the help of a “clever” homeless services official, tried to massage the results in the next five paragraphs, and then be amazed at how reality differs: