Recession

Various media outlets have jumped on the comments of Phil Gramm, an advisor to John McCain's presidential campaign, that when it comes to the economy, "we've sort of become a nation of whiners." However, these same organizations, such as ABC News, have done their part to promote such things as fretting over no more Christmas presents. For instance, on the November 12, 2007 "Good Morning America," reporter Bianna Golodryga hyperbolically warned that "some people are foregoing routine visits to the doctor and are opting for cheaper foods, like pasta and peanut butter, as opposed to protein, fruits and vegetables, in order that they can save as much money as possible." She added that for certain individuals, "Even holiday gift shopping won't be the same."

Now, this is the same program that on Friday's show observed that "conservative icon" Phil Gramm's "words have been damaging at a time when McCain is trying to convince voters he feels their pain." Certainly, GMA has done everything possible to assure viewers that the economic situation, which isn't a recession, is destroying their lives. On April 22, 2008, Ms. Golodryga (see file photo above) showcased a man who had been forced to skip church because of gas prices. She then intoned, "Some people even say that they are changing their diets, cutting down on costly prescription drugs or walking instead of driving to the local grocery store."

With Starbucks’ announcement that it will closing 600 of its locations nationwide, the network morning shows on Wednesday heralded this news as another sign of a bad economy. ABC’s Bianna Golodryga on "Good Morning America" lamented that "Americans are struggling just to pay for a cup of Starbucks coffee." NBC’s Matt Lauer’s clever headline: "Trouble brewing -- Starbucks announces its closing 600 stores in the next year. Is the demand for $4 lattes dying in a tough economy?"

But CBS’s "The Early Show" took the puns and the "doom and gloom" to a new level. Host Maggie Rodriguez teased the headline news: "Starbucks shutting its doors on hundreds of stores. Tough economic times or just a grande letdown?" Correspondent Ben Tracy, in his report on the closings, quipped, "The economic slowdown has been a real grind for Starbucks' profits. After filling up their gas tanks, some coffee lovers don't have enough left to fill up their cups."

On Monday’s CBS "Early Show," co-host Harry Smith talked to economic analyst Mark Zandi about the state of the economy and asked: "Oil's up, gasoline's up, food prices up, stocks, way, way, way, way down. Home owner -- home values are down. Is there an end in sight to all of this bad news?" Zandi replied: "You just made me depressed. No. It's just bad news. It really is...It's just a really tough time for many Americans."

Later, Smith commented on how all the bad economic news seems to contribute to bad economic events: "It just seems like we're in this cumulative cycle that, you know, once one threshold of bad news gets reached, we reach to yet another one." That comment sparked this exchange with Zandi:

ZANDI: Yeah, it's a self re-enforcing negative cycle. You know, that's what happens during recessions, and that's what we're in the middle of right now.

SMITH: Whoa, is this a recession?

ZANDI: You know that -- that's a debate among economists and policy makers. But in the minds of the average American household I think there's no debate, this is a recession. I mean they're worth less today than they were a year ago, they're purchasing power is lower. I mean, for most people that's the definition of recession. So, economists can debate it but I think most people think this is a recession.

The U.S. is not in a recession, but viewers wouldn't know it from watching "Good Morning America." In the span of three days, the ABC program has eight times proposed cures in its "Recession Rescue" segment. On June 24 alone, GMA fretted about the "recession" five times. This is despite the fact that America hasn't had one quarter of negative growth, let alone the two necessary for there to be a recession.

On Tuesday, teasing a story on how bad credit can keep people from getting a job, co-host Robin Roberts previewed "important tips in our Recession Rescue." At the top of 7:30 half hour, she again told audiences to stay tuned for "important tips in this morning's Recession Rescue." Ten minutes later, news anchor Chris Cuomo promised "our Recession Rescue" would give credit advice designed to keep viewers from not missing out on a job. Later in the show, he touted another story on how to save for retirement and labeled it as, that's right, "a good Recession Rescue." Now, certainly, the economy has been struggling and many people are having difficulty, but do words not mean things to the reporters and producers at GMA? Or would they simply shrug their shoulders and say, "Close enough?"

Survey question: If the media had the results of three independent surveys of corporate executives about the economy and two of them were more negative than the third, which one wouldn't get much coverage?

In the last few days, three such surveys have been released. Two of them - the Business Roundtable's quarterly CEO Economic Outlook Index and the Duke University/CFO Magazine Global Business Outlook survey - got pretty good coverage in the media.

The third survey, conducted by the University of North Carolina's Kenan-Flagler Business School for the American Institute of Certified Public Accountants, less so.

In his report on Uncle Sam's Monthly Treasury Statement released Wednesday afternoon, the Associated Press's Martin Crutsinger incorrectly informed readers that the stimulus checks sent out by the government represented the major reason why May's monthly deficit ballooned from a year ago. The AP reporter also continued with the wire service's seemingly never-ending recession obsession.

Here's the headline, and how Crutsinger began his report:

Stimulus payments result in record May deficit

A flood of economic aid payments pushed the federal budget deficit to $165.9 billion, the highest imbalance ever for May.

The Treasury Department reported Wednesday that the May deficit was more than double what it was in May 2007. Some $48 billion in payments went out as part of the $168 billion economic relief effort to revive the economy and keep the country from a deep recession.

Here is the full text of, and response to, a question directed to Jeannine Aversa, AP Economics Writer, Washington, in an "Ask AP" item four days ago (second question-answer segment at link; bolds are mine):

Why is it important whether we are or are not in a "recession"? I have read a technical definition of the word, and I have seen and heard many news reports in which economists and government officials opine on whether we are or are not in a recession. What is resting on that determination?

Ed Hein -- Juneau, Alaska

(Aversa's response begins after the break)

"Good Morning America" highlighted how financial matters have Americans so stressed out, their health is literally deteriorating.

The segment, titled "Recession Depression," blamed personal issues on the "troubled" economy. ABC made yet another comparison between today's economy and the economy during the Great Depression. Only this time, the reference was used to predict a rise in suicides.

"The link between financial troubles and psychological problems is well documented," said ABC reporter Chris Cuomo.

It certainly wasn't surprising how press outlets desperately trying to depict the economy as depression-like in order to get Barack Obama in the White House were practically giddy following the dour jobs report released by the Labor Department last Friday.

What was shocking given the portion of May's unemployment rate rise attributed to high school and college students looking for summer jobs was that virtually no press outlets considered the impact last year's minimum wage hike might have had on young Americans finding temporary positions between school years.

Consider this op-ed published in Monday's Washington Examiner authored by Kristen Lopez Eastlick, the senior economic analyst at the Employment Policies Institute (emphasis added throughout):

Don't miss the significant reporting errors noted at the end of this post.

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If this were a boxing match, with "The Economy" in one corner, and "Expectations" in the other, we'd be seeing a third-round knockout with "Expectations" taken away in an ambulance.

But if you think the news this week has changed the tone of the Associated Press's business and economy coverage, think again.

There have been three pieces of pretty decent news so far this week:

Media coverage of the economy in recent months should make journalists wonder what kind of job they're doing, according to Business & Media Institute Vice President Dan Gainor.

"‘If it bleeds it leads' has always been one theory. That only works up to a point," Gainor told Fox Business Network host Neil Cavuto June 2. "When you are actually spinning the results so much so that they're more negative than the worst economic time period in American history, well then you really have to sit back and think, ‘Maybe we're just doing this wrong.'"

In a hard economic times story by NBC's Kevin Tibbles on Monday's "Today" show there was a not-so-subliminal pro-Obama message on display as several times pro-Obama signs found their way into the background. Reporting on the increased traffic to pawn shops by the desperate to make ends meet in the "rocky economy," Tibbles, didn't mention Obama by name but the Illinois senator's name or image popped up in the background several times.

Tibbles, or at least his cameraman and/or producer, seemed to be sending the not-so-subtle message that the presumed Democratic presidential nominee could be the savior from these tough economic times.

The following is the full story as it occurred on the June 2, "Today" show:

Matching predictions from Reuters and Bloomberg, the government's Bureau of Economic Analysis told us this morning that the economy grew at an upwardly-revised annualized rate of 0.9%.

As I've said frequently, this is nowhere near acceptable. But it sure as heck isn't a recession.

Initial reaction to the news by the Associated Press's Jeannine Aversa was unfortunately predictable (bolds are mine) --

The economy plodded ahead at a 0.9 percent pace in the first quarter - slightly better than first estimated - but still underscoring caution on the part of consumers and businesses walloped by housing, credit and financial problems.

The media have been quick to paint the slow-growing economy as though it's in recession. Indeed, as our friends at the Business & Media Institute discovered, the MSM now is painting the economy much worse than the print media reported the 1929 stock market crash that marked the beginning of the Great Depression.

But kudos are due U.S. News & World Report's Rick Newman for staking out a contrarian stand.

In his May 27 piece, "Why Consumers Are Underconfident," Newman lists five reasons why consumers are overly pessimistic and hence consumer confidence numbers misleading as far as being an accurate barometer of the economy. Here's an excerpt including one of those reasons, "the freak-out factor":

The news media have covered recent economic trials with four times as much negativity as they covered the worst economic period in the nation's history - the Great Depression - a new study from the Business & Media Institute shows.

"They were four times more negative during the Bear Stearns buyout than the worst economic couple days in our country's history," BMI Vice President Dan Gainor said on "Fox & Friends" May 27, announcing the release of the new study, "The Great Media Depression."

..... But Misses Chance to Refute "Jobs Slashed" Claims.

It's good to see that someone else is on the case of the recession-obsessed Associated Press, particularly reporter Jeannine Aversa. But even the estimable James Taranto, in his Best of the Web column yesterday, let Aversa's most obvious and repeated error go by without comment.

Aversa started out her report yesterday ("When economy revives, how will we know?") by presuming to speak for all of us, and tinged it with a bit of brattiness:

With any luck, the second half of this year will be better than the so-far rocky first half. The Federal Reserve chief hopes that is the case. So does President Bush.

For the rest of us mere mortals, it feels like the pain is getting worse.

When the economy begins to snap out of its funk, how will we know?

Taranto pounced:

If there were any doubt the media is trying to milk bad economic news for all that it's worth, look no further than BusinessWeek magazine.

BusinessWeek kicked off its "Recession in America" blog on May 2. It is dedicated solely to reporting on the "recession [that] is here (or will be soon)," as the headline of a May 19 post stated (h/t BMI advisor Chris Roush of Talkingbiznews.com).

"As the U.S. economy slows, the story is often told through broad statistics," the "about" section of the blog stated. "In this blog, BusinessWeek reporter Tim Catts travels the country to uncover the stories of how individuals are coping with the downturn."

Dan Gainor, Vice President for the Business & Media Institute, blamed part of people's gloomy perception of the economy on the "constant drumbeat" of negativity coming from the news media. Gainor appeared on Fox Business Network's "Cavuto" May 20.

"Almost 23 million people watch evening news every night. That has an affect and that's almost 1/10 of the American population. Those are people who are shoppers, who are buyers. It affects people and just the constant drumbeat of negativity here from the mainstream media affects people even at high incomes," said Gainor.

The show's host Neil Cavuto seemed to agree, "If this continues and this perception becomes reality, we've got hell to pay to here."

The business press's recession obsession continues:

• A couple of weeks ago, in the wake of the initial first-quarter GDP growth reading of 0.6%, Rex Nutting at MarketWatch.com entertained us with the notion that an economy can be in a recession even while there is real, if anemic, economic growth.
• Today, Jeannine Aversa of the Associated Press, with the help of a number of economists, told us that we can have a recession if growth is better than anemic -- even above 1.5%.
• Steven Matthews of Bloomberg went even further, as he assumed that we're in one now ("U.S. Recession to End by September, Business Economists Say").

This is getting ridiculous.

Let's start with the doleful dramatics of Aversa's report:

Someone forgot to tell the Wall Street Journal's Kelly Evans and Justin Lahart, carried here at the Arizona Republic, that they're supposed to portray the economy in a bad light whenever and wherever possible. I'll get to the pair's report later.

That "bad light" directive seems seared into the minds of the Associated Press's Martin Crutsinger and his AP colleagues, as they continue to "cling to recession," and attempt to convince consumers and businesses that if perchance we're not already in one, it's just around the bend.

The AP's persistence has borne dreadful fruit. Relentlessly downbeat reporting during at least the past six years by the wire service's business reporters -- who largely determine what most Americans see, hear, and read about the economy -- is a big reason, if not the most important reason, why most Americans, as seen in the latest consumer confidence report, have a negative economic outlook and are convinced that we are in a recession.

Friday, Crutsinger worked mightily to take the lemonade that was the good housing starts report and turn it into lemons:

How different do you think Americans' take on the current economy would be if the business press picked up on the fact that the bad employment news is coming predominantly out of two struggling states -- and that most of the rest of the nation is holding its own?

That's the question that occurred to me as I looked at April's Bureau of Labor Statistics regional and state employment and unemployment report this morning.

Three things stick out:
- How big of a drag California is in the overall employment picture.
- How much of an outlier Michigan is.
- How Oklahoma continues to impress.

How much California and Michigan are affecting the overall picture is a real eye-opener:

West Virginia primary voters were asked at least two factually faulty exit poll questions yesterday, both of which asserted that the U.S. economy is already in recession. This, of course, is absolutely false. A recession is marked by at least two consecutive quarters of negative economic growth. The last quarter of 2007 and the first quarter of 2008 were marked by slow, but positive, economic growth.

See the screencap from CNN.com below (h/t e-mail tipster Jeff Williams):

How about I ask you if you "feel" like you make enough money each year? Let's say you make $48,000 a year, OK? (That's the median household income in the US) You'll likely tell me, then that you "feel" you need more. Now, from this, can I conclude that you are "struggling in life" as a citizen of the USA? Not if you use actual data instead of "feelings" to determine what "struggling" means and not if you then try to add context to what we all have compared to what others in the world have, of course. But, this is exactly the sort of nonsensical "survey" that Reuters gravely warned us about this week. Without bothering with any statistics or context, Reuters excitedly reported that "Many Americans struggling in life, survey finds", and decided that everyone is downtrodden and filled with "suffering" in the United States today.

But this is just another so-called survey that is reported backwards. It turns out that, even by their unscientific criteria, 49 percent of the Americans they surveyed said that they were "thriving, with few health or money worries." So, why is this reported as if the preponderance of our fellow citizens is claiming to be "struggling"?

When it comes to the economy, "it's not good. Not good," according to Jon Stewart. "But don't take my word for it. Seriously, I'm actually doing very well."

On May 1, "The Daily Show" host was introducing a segment that made light of doom-and-gloom economic reporting on network and cable news. His mash-up highlighted CBS's own "Grim Reaper," Anthony Mason, ABC's Betsy Stark, NBC's Brian Williams and CNN's senior business correspondent Ali Velshi.

Stewart poked hardest at Velshi, whom he called that "Hairless Prophet of Doom."

"Who is that hairless prophet of doom and how can we appease his anger, please?" Stewart pleaded, "If we give you our hair will you give us back our money? Will you do it, sir? I beg of you - Velshi!"

Velshi responded to Stewart's charge on CNN Friday and in a column on CNN.com.

The network news broadcasts are to blame for the American people's widely held misconception that the U.S. economy is in a recession, according to Media Research Center founder and President L. Brent Bozell III.

"How in the world is it that 81 percent of the American people believe that we're in a recession?" Bozell asked on CNBC's "Kudlow and Company" May 2. "Maybe it's because the national networks this year, and we've counted it, have talked about a recession over 500 times."

On the day the government reported a tenth of a point drop in the unemployment rate and two days after news of a second straight quarter of 0.6 percent GDP growth proved the nation is not in a recession, Friday's NBC Nightly News delivered a ridiculously shallow story, based on two anecdotes and a couple of advocates, to prove rising prices are forcing the elderly out of their homes and into vans and soup kitchens. Anchor Brian Williams promised “an interesting look...at the toll that rising prices, of things like gas and food, is taking on Americans living on fixed incomes.” [audio available here]

Chris Jansing [that's her by the van] traveled to Northridge, California, just north of Los Angeles, where she found 82-year-old Betty Weinstein, stunned by a water bill, turning to a second reverse mortgage to stay in her home. But she at least still has a home. Jansing then highlighted an even sadder case:

Rising rents forced Scott and Kate Bishop to move out of this blue house and into their van, sleeping on a mattress in the back.

But it got worse: “And now high food costs have meant, for first time in their lives, the Bishops have gone hungry.” Jansing cited no source for her claims as she asserted: “Soup kitchens and food banks are seeing record numbers of seniors asking for help for the first time in their lives,” but “now donations here are down as middle class donors struggle to feed their own families.”

Despite all the gloom and doom, the employment picture in April was much better than economists had expected, and, maybe more important, quite different than the Hooveresque, Depression Era picture media members have been painting for months.

Makes you wonder if in press rooms all around America, as well as in Democrat campaign headquarters across the fruited plain, there was a huge sigh of disappointment at 8:30 AM EDT when the Labor Department released the data.

Critical updates at end of post including FAR better-than-expected factory orders report!

As such, without further ado, here's the news most people in the nation actually hoping for a good economy will be glad to hear:

Perception is everything, facts are trivial to April Ryan, judging from two recent comments from American Urban Radio Network's White House correspondent. [audio available here]

At the April 29 Rose Garden press conference, Ryan asked President Bush the following question about the economy:

I talked to [Rep.] James Clyburn [D-S.C.] before this press conference. He said, "As a man thinketh, so are we." And Americans believe we are in a recession. What will it take for you to say those words, that we are in a recession?

Of course the following day, data from the federal government show the U.S. economy in slow economic growth, but far from the six months of negative growth needed for a recession. No matter to Ryan, who today went from applying the "as a man thinketh" logic to a 5-year old liberal media meme about the war in Iraq. Appearing shortly after 11:30 a.m. EDT on MSNBC to discuss the 2008 presidential race, Ryan parroted liberal talking points on the Iraq war:

The Associated Press's Jeannine Aversa really should change her writing focus, because economics is clearly not her specialty.

After telling readers in March that "Dangerous cracks in the nation's job market" are "ominous signs that the country is falling toward a recession or has already toppled into one," Aversa had the gall to report Wednesday, "The bruised economy limped through the first quarter of this year at a six-tenths of a percentage point growth rate as housing and credit problems forced people and businesses alike to hunker down."

Are you joking? You, your wire service, and virtually every media outlet in the nation have been telling Americans that we're already in a recession. A government report comes out saying that we're not, and this is how you begin your article covering the surprising announcement?

How disgraceful. Sadly, that was just the beginning (emphasis added, h/t NB reader PunditDotCom):