The stock market is casting a vote of "no confidence" in Barack Obama (D-Ill.) and his Republican opponent is missing an opportunity to slam the freshman senator for an economic agenda that is a rehash of the worst of Presidents Herbert Hoover and Jimmy Carter.
So argued on-air editor Charles Gasparino in an October 13 op-ed in the New York Post, where the CNBC talent mentioned that even Obama's Wall Street backers are nervously telling him to change course on his economic plans (emphases mine):
Overall, his [Obama's] plan includes some of the most lethal tax increases imaginable, including a jump in the capital-gains rate. He'd expand government spending massively, with everything from new public-works projects to increases in foreign aid to a surge in Afghanistan - plus hand out a token $500 welfare check that he calls a tax cut to everyone else.
This is clearly the wrong way to go in the wake of an economic meltdown- yet Obama, for all his talk of how willing he is to compromise, of how he'd bring people together, is sticking to his tax guns.
I know at least one top Wall Street executive, an Obama supporter from the start of his campaign, who has recently urged Obama to rethink his tax plan - and that was before last week's record losses on the Dow.
On what should be the crowning day of his professional career, one hopes for his sake that Paul Krugman wasn't watching Morning Joe. For news of his economics Nobel was met by the crew with ridicule that even Mika Brzezinski couldn't resist. Andrea Mitchell tried to uphold the Krugman honor, but—as seen in the screencap—even she couldn't suppress a smile at the award's arrant absurdity.
Joe Scarborough piqued Mika's curiosity with his teasing of the news, while guest Jim Cramer saw the award as confirmation that America is well on the way to socialism.
Given that the topic of this post is the Associated Press, I guess I should be pleased to report that one of its two reports tonight about the dive in the stock market last week is correct.
In one article ("Gov't eyes plan to take ownership stakes in banks"), AP's Harry Dunphy and Tom Raum correctly said that "the Dow Jones industrial average just completed its worst week ever, plummeting more than 18 percent." This is sadly true, at least if you "only" go back to 1921 (even I will give AP a pass for not wanting to dig through the muck of 1920, 1907, 1903 and 1901, which the New York Times was using as "hey, it's not that bad" benchmarks as Black Tuesday approached in 1929):
Poor Karl Ritter and Matt Moore of the Associated Press must have a lot of time to kill, a dearth of ideas, and a studied disinterest in accuracy as they await the awarding of the Nobel Prize for Economics in Stockholm, Sweden on Monday. A list of past winners is here.
Besides lamenting that no woman has ever won the Economics Prize (so?), the AP pair felt the need to relate the financial bailout passed by Congress and signed by the President a week ago, and the current steep stock market decline that followed it (or, as yours truly and Investors Business Daily would argue, occurred because of it), to who might win the award.
Along the way, they, as AP reporters are wont to do, erred, and quite seriously.
Here's how their report, weirdly entitled "Amid the meltdown, economics Nobel no easy pick," began (bold is mine):
There has been an unreality in the reports on the falling stock markets for at least the past 10 days. Each day's plunge seems to have been exclusively due to the "global economic crisis" and/or the supposed "freeze on credit."
Oddly enough, the admittedly small bank where I have my business accounts is having absolutely no problem funding mortgage, home-equity, and other loan applications from qualified borrowers -- a fact I confirmed just before posting this entry. With all due respect to the global business press, if there's truly a "freeze," how can that be?
I've put forth an alternative explanation to the media meme a couple of times this week myself, but an editorial at IBDeditorials.com yesterday brought out a major element of what I have been saying much more forcefully and articulately. Remarkably, though the possibility seems pretty obvious to me, and I suspect many others, I have seen no one in the business press covering daily market events even mention the obvious and quite likely alternative that follows.
The editorial, "Investors' Real Fear: A Socialist Tsunami," teases with the plaintive question, "What is it about the specter of our first socialist president and the end of capitalism as we know it that they don't understand?"
Interesting, Jew attributes his downfall to the examples of others, and, according to Buchanan, "is prepared to name others who he says have engaged in similar actions." Though there's clearly an element of personal responsibility avoidance at play here, it's nonetheless worth noting that AP and Buchanan still had no interest in learning where Jew picked up what Elias described as "lessons taught by other politicians."
It's getting close to Halloween, so I hope this story doesn't scare you too much. But the Associated Press has discovered that this bad economy is making us ugly. That's right, ugly. Because of this downturn people just cannot afford to go to their friendly neighborhood plastic surgeon for those nips and tucks any more. So it is the AP's sad duty to inform us that "As economy sags, faces do too, cosmetic docs say." It's a horrible, horrible world that we now are cursed to live in if we can't afford our Botox and tummy tucks! Now, they are serious with this so quit your laughing this instant.
The economy isn't the only thing that's sagging -- so are faces, breasts and bellies as would-be cosmetic surgery patients increasingly opt against costly nips and tucks because of tough financial times.
You know, I was complaining to my Mommy yesterday that I didn't want my liposuction and she told me to do it anyway because kids in China could barely afford an eyelift these days. I know I should be grateful for what I have, though. Some people DO have it worse, ya know?
Was the current economic situation caused by too little government intervention in the financial markets—or too much? I'd say the latter. Washington used Fannie/Freddie as a political piggy bank, causing it dole out loans to people who had no business receiving them. And because Freddie and Fannie's obligations enjoyed the implicit guarantee of the federal government, they were able to obtain funds at lower rates and become by far the biggest dog on Mortgage Street. That in turn caused private-sector banks to lower their lending standards in order to be able to compete. Throw in the Community Reinvestment Act—another major bit of government meddling that forced lenders to compromise underwriting standards—and you had a recipe for the current unpleasantness.
But the Washington Post, in the person of Anthony Faiola, sees too much capitalism, not too little, as the problem. According to his official WaPo bio, he "writes about the forces of globalization" for the paper. Faiola's article in today's WaPo is entitled The End Of American Capitalism?—and it seems clear he'd love someday soon to be able to remove the question mark.
The story in question took the skilled labor of a grand total of four ABCNews staffers, chief among them Martha Raddatz. In her lede she noted the Dow dropped 107 points in the course of the seven minutes President Bush spoke from the White House on the ongoing financial crisis.
But it seems Raddatz, along with Lisa Chinn, Jon Garcia and Kate Barrett wrote too soon. The market rebounded from its deepest losses earlier in the day to close down only 128 points.
The Dow dropped 5,585 points since its high a year ago, banks have been afraid to lend and the government bought billions in toxic mortgage-backed securities. So CBS's "The Early Show" went to some top finance experts to explain what was happening to viewers, right? Nope, they went to kids, Oct. 10.
Weatherman Dave Price talked to fifth graders in Arlington, Va., about the credit crisis, exclaiming, "You wouldn't believe how much they know, sometimes we ought to listen to them and their solutions."
"What one thing does your mom waste money on?" Price asked one student.
"Mmm, smokes, I guess," a fifth grade girl from Glebe Elementary School replied.
It's sad when just about the only place to get the truth about what happened to precipitate the current mortgage-lending mess is the Colbert Report.
Jim Cramer of CNBC's "Mad Money" appeared on the Comedy Central show on Monday.
The takeaway soundbites:
Cramer said "I'd love to, but I can't" pin the blame for the debacles at Fannie Mae and Freddie Mac on President Bush.
He noted that "the Democrats got a lot of campaign contributions from Fannie and Freddie and vice-versa. It was a big circle," and that this is what enabled the two government-sponsored enterprises to continue "to lend to anybody."
Though Colbert was in attempting-comedy mode, Cramer eventually got to the point where he clearly wasn't kidding (video is at the National Review Media Blog link).
Here's the relevant verbiage, which begins at the 2:20 mark (bolds are mine):
Faiola’s article said, “But the hands-off brand of capitalism in the United States is now being blamed for the easy credit that sickened the housing market and allowed a freewheeling Wall Street to create a pool of toxic investments that has infected the global financial system.” The Post story had no rebuttal from free market economists who say this was not market failure after all.
Labor costs the Detroit Three substantially more per vehicle than it does the Japanese. Health care is the biggest chunk. GM, for instance spends $1,635 per vehicle on health care for active and retired workers in the U.S. Toyota pays nothing for retired workers - it has very few - and only $215 for active ones . . . Contract issues like work rules, line relief and holiday pay amount to $630 per vehicle - costs that the Japanese don't have. And paying UAW members for not working when plants are shut costs another $350 per vehicle. -- Fortune magazine, January 26, 2007
Obama and Biden will strengthen the ability of workers to organize unions. He will fight for passage of the Employee Free Choice Act. Obama and Biden will ensure that his labor appointees support workers' rights and will work to ban the permanent replacement of striking workers. -- Official Obama website statement on labor [emphasis added].
Today on CNN's American Morning, Cook County sheriff Tom Dart was interviewed by anchor John Roberts. Dart has announced his office will quit carrying out evictions stemming from mortgage foreclosures until lenders start exercising "due diligence." During the interview, Dart made the point that some evictions involve people who have not defaulted on their mortgages, but have simply been paying rent to landlords who did. Roberts's comments at the end of the interview are telling:
ROBERTS: So the Illinois Bankers Association is accusing you of "vigilantism" and, quote, "at the highest level of an elected official." What do you say to that?
DART: I think the outrage is on my part with them. That they would so cavalierly issue documents and have me throw people out of homes who have done absolutely nothing wrong. They played by all the rules. And because of their ignorance and their lack of diligence and going out to their own property and finding out who is out there, innocent people are being set out.
A single report by KFYI radio of Phoenix, Arizona highlights a shocking claim made by the Department of Housing and Urban Development (HUD). HUD says that five million illegal aliens hold illegal mortgages. This is just one more example of the lax lending laws put into place by Democrats like Barney Frank that have contributed to this economic crisis. One would think this would be big news. But, so far we have only this one report to cover it.
There have been earlier stories of home flipping schemes that made liberal use of illegal aliens as straw buyers and the FBI has followed numerous cases to prosecution and conviction. But the Old Media have not done much with this story.
All three morning shows on Wednesday skipped a startling claim by Senator Barack Obama during the previous night's presidential debate. During a discussion on spending, he bizarrely asserted, "Actually I'm cutting more than I'm spending so that it will be a net spending cut." However, according to the Committee for a Responsible Federal Budget, that statement doesn't even close to being true.
Their numbers show an increase in spending of $425 billion over four years of an Obama administration and only a decrease of $144 billion. And this is factoring in Obama's tax increases as a way of "saving" money. And yet, ABC's "Good Morning America," CBS's "Early Show" and NBC's "Today" all failed to report on the discrepancy or the math oddity of including more taxes as a cut. GMA reporter John Berman even filed a "fact check" segment on the debate, but ignored the Obama claim, which was picked up the AP.
Bob Bennett is a man of integrity, and the Democratic half of the political Bennett Brothers. He appeared last night on Mark Levin's nationally syndicated radio show to debunk the media myth built-up around Arizona Senator John McCain's role in the Keating Five mess circa the late 1980s and early 1990s.
(Brother Bill served as Secretary of President Ronald Reagan's Department of Education and Director of President George H.W. Bush's Office of National Drug Control Policy, and is now a nationally syndicated radio host in his own right, of "Bill Bennett's Morning in America.")
Bob Bennett is an attorney, and was at the time of the Keating Five scandal hired by the Senate Ethics Committee as Special Counsel to lead the investigation into what had happened. After over a year of exhaustive examination, Bennett recommended that Sen. McCain (and Sen. John Glenn of Ohio) be exonerated of all charges having to do with the Keating scandal. The ethics committee, which was majority Democratic, rejected Bennett's recommendation.
When Lehman Brothers CEO Richard Fuld testified before the House Oversight Committee Oct. 6, the media criticized his wealth and spending amidst financial turmoil in his company and on Wall Street. But conspicuously missing was the story of Fuld's political contributions.
It's the kind of socialist attitude that would make Venezuelan dictator Hugo Chávez proud. Unfortunately, it's coming from a New York Times columnist making recommendations for the U.S. financial system.
"[W]hat we really need is we need, well capital that the banks - we need to put money into the system," Krugman said. "And in effect, what always happens in financial crises is a partial nationalization - partial and temporary nationalization of the financial system. And, that is - you know and, I predict with almost 100-percent confidence that's how it will end, but the [Henry] Paulson Treasury wasn't willing to talk about that."
The Media Research Center's Director of Communications and NewsBusters.org Contributing Editor Seton Motley appeared on Friday afternoon on the Fox News Channel's American Election HQ to discuss how Bill O'Reilly handled his interview of Rep. Barney Frank, as well as how ABC's The View routinely abuses Gov. Sarah Palin.
Motley expressed thanks and gratitude that FINALLY someone in the media was asking Rep. Frank about his extensive history of blockading, stonewalling and grandstanding against attempts to reform Freddie Mac and Fannie Mae, O'Reilly's righteously indignant questioning notwithstanding.
Motley also cautioned that "there is no diving in The View's thought pool," and pointed out that their panel make-up is biased in typical media fashion: three liberals and one conservative.
Updated below. Last Monday as the U.S. House of Representatives voted down the initial bailout package,both Fox News and CNN sent e-mail alert subscribers numerous alerts about the Dow's dive. The market recovered some the following day, a development that CNN neglected to mention in the same e-mail alerts.
Old Media's coverage of the recently-lifted executive and congressional bans on offshore exploration and drilling for oil and natural gas largely overlooked an important element that should have been very relevant to the discussion.
Supporters of lifting the bans surely share much of the blame for only rarely citing it. Though they have frequently noted the hundreds of billions of dollars a years annually sent overseas to pay for oil that could have been extracted here, they have mostly missed a golden opportunity to tell the American people what over a quarter-century of drilling bans has cost the government and taxpayers. They also generally failed to tell us about the windfall that awaits if the end of the offshore and other bans finally leads to appropriately aggressive use of this country's God-given resources.
But if we had inquisitive financial reporters in the business press who were interested in information relevant to the "Drill Baby Drill" debate instead of merely repackaging the press releases they received from those on both sides (the sole exception I found was this Wall Street Journal editorial), many more Americans would have long ago learned about what follows.
One of CNN's citizen reporters on their new iReport service caused a bit of panic for Apple's stock prices this week when one of those reports featured a false claim that Apple CEO Steve Jobs had suffered a heart attack. With rumors swirling the stock price fell until official news from Apple quashing the rumor calmed investors' fears.
Former Massachusetts Governor Jane Swift was diplomatic, but her message was clear: because Sarah Palin remains doubtful of getting a fair shake from the MSM, she wants to take her message directly to the American people. Swift, speaking on behalf of the McCain-Palin campaign, made the remark in response to a question from this NewsBuster during the course of a conference call this afternoon.
Swift took the question after making opening remarks in which she said that Governor Palin won last night's debate in part because she was able to connect with Americans as "a person from the middle class who [expressed] the real anxieties that families have about our economy right now." After suggesting that Senator Biden didn't connect as well, Swift added that Biden made a significant number of incorrect statements "that kept the fact-checkers busy."
It was then that NewsBusters had the opportunity to pose its question. Listen to audio here.
"Here's another sad sign of our economic times: Never before has the U.S. Postal Service laid off workers. Now, it's a real possibility," lamented Joe Davidson in the October 3 "Federal Diary" feature for the Washington Post.
But isn't that part of the problem with government in the first place? Rather than trimming expenses and payroll during tough economic times, the federal bureaucracy stubbornly insist on being immune to market forces that affect the private sector.
Davidson quoted American Postal Workers Union President William Burris that "for the first time in postal history, the losses cannot be recovered by postage rate increases."
Wow. Cry me a river. Davidson fails to explain that one major reason the federal tax-exempt USPS has been able to rate-hike its way out of trouble before is that, by federal law, it has a monopoly on the delivery of first class mail.
Why is the mainstream media --which keeps lecturing Americans that Treasury Secretary Henry Paulson's Bailout Package Version 2.0 must be passed immediately-- ignoring what might be the most earth-shattering provisions in Paulson's package?
The media needs to start asking hard questions. Here is where they need to start. If you look at page 180 of the 451-page monster bailout bill that easily passed the Senate yesterday (PDF here), you will see that it includes at Section 116 language about the tax treatment of "industrial source carbon dioxide." It also provides, at Section 117, for a "carbon audit of the tax code."
What could a provision about the tax treatment of "industrial source carbon dioxide" and another provision about doing a "carbon audit" of the tax code possibly have to do with restoring confidence in Wall Street's troubled credit markets?
The answer: NOTHING.
This appears to be an attempt by global warming fanatics to lay the foundation for an economy-killing carbon tax just like the "cap-and-tax" system that is now destroying European industry.
You've got to love brutal honesty, especially when it comes from the financial media.
The Senate's version of a bailout bill, which passed last night by a margin of 74-25, included "sweeteners" - or obscure tax breaks - including benefits for the manufacturer of wooden arrows used in children's toys and another for litigants in the 1989 Exxon Valdez oil spill.
In case viewers did not understand the concept of a domino effect caused by the financial crisis, on Wednesday’s CBS Early Show, co-host Julie Chen offered a visual representation as she declared: "What happens on Wall Street affects all of us on Main Street. It's the classic domino effect." At that point, six giant dominos where displayed in the studio, each one labeled with a different phase of the economic crisis (see video).
Chen went through each phase, and domino, with financial expert Vera Gibbons. At the end of the segment, Gibbons explained: "It's a domino effect, it all works together." Gibbons then knocked over the giant dominos and declared: "Voila!" Chen replied: "That's depressing." Prior to offering such a dumbed-down explanation of the financial crisis, on Monday, Chen referred to all the comedic material Sarah Palin provided to Saturday Night Live: "Tina Fey has just so much material to work with, this is like, probably a dream come true for her."
Ever since liberal media types felt robbed by the Bush-Quayle campaign’s "lies" about Michael Dukakis in 1988, we’ve been suffering through the media elite’s attempts to "police" the facts in advertisements. "Correction" squads are insisting that John McCain can’t say Barack Obama will raise taxes, no matter how much that announcing Democrats will raise taxes is like announcing the sun will rise.
In 1992, Vice President Dan Quayle suggested Bill Clinton would raise taxes on the middle class. Quayle said in the vice presidential debate that everyone over $36,000 could face a tax hike. Media "experts" accused the GOP of mangling "facts." President Clinton was elected – and passed the largest tax increase in American history, right down to the middle class.
"It was Quayle who repeatedly twisted and misstated the facts," CNN reporter Brooks Jackson had pronounced after the vice presidential debate. On ABC, Jeff Greenfield proclaimed: "Independent examination of this charge by, for example, press organizations, has found it, to say the least, misleading."