Economy

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."

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.

ABC was the most negative. “Stock slide,” World News anchor Charles Gibson teased, “Wall Street finishes the worst week of the year down nearly 600 points.” Gibson soon highlighted that news, as he only alluded to the good GDP number, when he reported “the worst week for the Dow in five years. Even positive news on economic growth wasn't enough to keep investors from selling. Among other things, they had to contend with a battered housing market.” Reporter Betsy Stark agreed as she too only made a passing reference to the GDP: “It sure is, Charlie. In fact, buried inside that positive report on Gross Domestic Product today was more evidence of what economists now describe as an outright recession in the housing sector.” ABC didn't even put the GDP number on screen as Stark devoted her entire story to the impact of the declining housing market before concluding that “it increases the odds of a downturn in the overall economy since housing now accounts for roughly one in ten American jobs.”

The Dow dropped again today.

Scary.

And that's exactly how the mainstream press treated it. What goes down, must go down further. Even with the sour coverage on NBC and CBS on July 26, there were voices of reason that warrant commitment to the markets.

"So this is not a crash, if anything, it's a correction," said CNN "American Morning" business correspondent Ali Velshi. "It might not even be a correction; it might just be a stop on the way."

Wow, good news, even on CNN.

Others experts point at signs our economy is still in tact and still moving in the right direction as evidence not to panic.

Covering Raul Castro's July 26 hour-long Revolution Day speech, the Washington Post characterized the fill-in dictator's latest speech as one that "hits capitalist notes while placating hard-line party loyalists." But in truth Castro's speech was the typical Communist agitprop fare: empty promises for more pay, a call for harder work from the people, and above all else, blaming the United States for the collectivist economy's failure.

"Wearing his trademark tinted eyeglasses and military uniform, Castro, 76, struck distinctly capitalist notes before tens of thousands of flag-waving Communist Party loyalists," reporter Manuel Roig-Franzia noted in his July 27 story, filed the day before from Camaguey, a city 350 miles east of Havana.

Yet from Roig-Franzia's article itself, it becomes clear Castro is not a Latin incarnation of Milton Friedman. A little more foreign investment is the only capitalist bone to be thrown Cuba's way.

Yesterday, Brent Baker at NewsBusters caught the Old Media emphasis on the decline in existing-home unit sales, even though the median existing-home price went up. CBS and Katie Couric apparently invoked the Great Depression in their existing-home sales commentary (I think any number of those 90 and older could say: "I knew the Depression, and Katie, this is no Depression.").

Today we have the Commerce report (PDF) that new-home sales volume is down, AND the media crowing (unfortunately fed by the lack of Commerce Dept. detail) that the nationwide median new-home selling price is down:

The median price of a new home sold last month dropped to $237,900, down by 2.2 percent from a year ago. It was the biggest year-over-year price drop since a 6.5 percent fall in April. The median price is the point where half the homes sold for more and half for less.

But at the risk of sounding like a broken record, I'm forced to make the same point I made a couple of months ago in more detail -- by the time you consider changes in the regional mix in home sales, you're left with an overall new-home market where regional prices are holding steady or perhaps even slightly increasing -- and definitely NOT in decline.

A quick look at the following figures will illustrate the point:

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.

Below is a screen grab from the ABCNews.com Web site that should give you a hint of the slant we're likely to see from the networks tonight, or at least ABC, with teaser headlines such as "Overstimulated Economy, Unprecedented Stresses... Where Does It End?" (picture below jump).

Stay tuned to NewsBusters for more, plus check out the Business & Media Institute.

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."

Of course, Velshi didn't mean $10.26 billion per share. ExxonMobil actually showed a second quarter earning of $10.26 billon, or $1.83 a share. That’s down a $100 million from this time a year ago.

Death and taxes may be the only certainties in life, but journalists’ support for higher taxes is almost as predictable.

Actions that liberals dislike, such as smoking, eating the "wrong" food, and spewing carbon earn media support for tax increases.

Right now, the media are promoting a “bipartisan” bill in Congress that would expand the State Children’s Health Insurance Program (SCHIP) by raising tobacco taxes sky-high.

“Senate Panel Adds Billions For Health,” announced a headline from the July 20 New York Times. The headline sent a positive message that people’s health would be improved, rather than the honest message that the bill calls for a 156-percent tax increase on cigarettes, and a more than 20,000-percent increase on cigars (up to $10 per cigar).

$10 a cigar? That deserved a headline or two.

Do you ever wonder how "a single mother of two from Atlanta" who earns the minimum wage has the dough to plunk down for travel to Washington, D.C., lodging, and child care to attend a left-wing rally? I sure do. But then, it can't be that difficult when you're a professional victim for a left-wing group.

Washington Post reporter Xinyun Yang quoted one Irene Cole of Atlanta, Ga., at the close of his July 25 article "Democrats Cheer Wage Hike." "From $5.15 to $5.85 -- that's... a big raise, and we do thank you," Yang quoted Cole, who attended yesterday's "rally of union and activist groups on Capitol Hill."

Haven't I heard Cole's name before? Oh yeah, I have. It cropped up in January when I wrote about ABC's biased treatment of the minimum wage for the MRC's Business & Media Institute. Reporter Dean Reynolds cited Cole in his report on the January 10 "World News."

After reviewing that story, I realized two things. First, Cole misled the Post's Yang. She earns at least $6-an-hour (when she's working for private employers), and secondly, Cole is no stranger to whipping up crowds at liberal activist rallies (no word how much she's paid or compensated for expenses for her activist work):

"[T]here is unmitigated good news," proclaimed Ali Velshi about the minimum wage increase on the July 24 "American Morning." While the business reporter admitted "there are lots of sides to the story," he still called it "good news."

Back on January 2, Velshi stated that the current minimum wage of $5.15 an hour is "simply not fair." He had trouble with math in that "American Morning" appearance stating that the minimum wage comes out to $900 a week, when he likely meant $900 a month.

This time, Velshi was right with the math and left with his politics.

"The bottom line is you can't underpay people. And we've been underpaying people," said Velshi.

As CBS and NBC evening newscasts ignored dropping gas prices on July 23, ABC's Charles Gibson found a way to provide negative spin.

"News today in this country, that gas guzzling is getting cheaper while coffee guzzling gets more expensive. The price of gas took a dive in the past week. The government says it was down nine cents a gallon, to an average of $2.96," Gibson said on "World News with Charles Gibson."

But the cost of an optional Starbucks latte has nothing to do with gasoline. Still, Gibson oddly correlated the nine-cent price drop per gallon of gas since last week with the nine-cent price increase at the popular coffee joint.

In the July 22 Washington Post, writer Monica Hesse interviewed Ron DeFore of the SUV Owners of America (SUVOA), for her Style section front-pager, "A Man Who Wants SUVs to Get More R-E-S-P-E-C-T."

But far from respect, Hesse's interview at turns shifted from an almost "Daily Show"-like mockery to an unqualified parroting of liberal talking points. You can find her interview here, but I found these three questions particularly to be cheap shots:

In 1992, Bill Clinton successfully used a campaign strategy of continually focusing attention on the supposedly poor economy thinking that Americans typically vote with their wallets.

Of course, most intelligent people know that the recession actually ended in early 1991, and that this strategy would have failed miserably had the media not been complicit, and, instead, honestly reported economic realities.

Regardless, it appears media at this point are concerned that a strong economy and rising stock market might undermine Democrat presidential candidates in November 2008.

With that in mind, the New York Times' Tom Redburn wrote an article Saturday that diminished the importance of the economy in the upcoming elections, threw cold water on the premise that presidents have any impact on economic developments, and told readers to be much more concerned with - wait for it - the war in Iraq.

In fact, the article actually began (h/t Lynn Davidson, emphasis added throughout):

As NewsBusters has been reporting this week (see this and this), as the stock market hit new all-time highs, the media have been dour Nervous Nellies carping and whining about gas prices, the low value of the dollar, the housing slump, and the rising trade deficit.

Yet, there are a variety of issues that press outlets have conveniently ignored during this record bull run that not only explain rising stock prices, but also give a more accurate view of what is going on in the global economy.

For instance, Bloomberg was one of the only major media outlets Tuesday which reported record purchases of U.S. securities by foreigners in May (emphasis added):

Using disparaging comments to stoke class warfare, Newsweek called for higher taxes on the “super rich” in the July 23 issue.

The magazine called private-equity partners “Masters of the Universe,” “the true aristocrats” and remarked snidely that “even their secretaries, it seems, have English accents.”

Colorado journalists and politicians who fell in line and attempted the bogus "Food Stamp Challenge" probably didn't anticipate that a Colorado blogger would call them out, and then call their bluff. But that is exactly what happened.

In June, Colorado Freedom Report's Ari Armstrong challenged those in that state's media and political class who swallowed the claim that Food Stamp recipients can't get by on $21 per person per week (even though, as syndicated columnist Mona Charen and yours truly noted back in April, the right number is between about $27 and $36, depending on family size) to pay $10 to a charity of Mr. Armstrong's choice for every dollar under $1,080 ($6 a day for 180 days) that he and his wife combined spent on food in a six-month period.

(Picky, picky -- The Armstrongs were even tougher on themselves than they needed to be, as there are 184 days in the six-month August 2006 - January 2007 time period involved. They could have used $1,104 as their benchmark.)

Nonetheless, Armstrong had only two people take up his challenge:

NBC proved to be a media anomaly on July 17, leading its “Nightly News” broadcast with the record-high close on Wall Street and admitting that the stock market does benefit “a majority of Americans.” This historic bull run by the stock market was virtually ignored by other media. Katie Couric briefly mentioned it on the CBS “Evening News,” and ABC “World News” ignored it on July 17.

A new poll released Wednesday gave extraordinary evidence as to how continued negative reports from a bearish media have impacted the public’s view of the economy.

As reported by Reuters (emphasis added):

Two-thirds of those surveyed, 66 percent, said the direction of economic policy was fair or poor.

Yet, these same folks are very optimistic about their own economic condition:

The Hill newspaper can be a good read for Capitol Hill coverage. It goes deeper than the superficial treatment the MSM often gives legislative matters.

That said, it seems to me the paper is taking at best a curious tack on an issue dividing fiscal conservatives of late: whether to sew up a federal tax loophole on private equity compensation and effectively raise some taxes as a result.

The Hill is painting the matter as one of conservative activists versus their GOP congressional allies with Jessica Holzer's July 18 article, "Conservatives break with GOP leaders on tax bill." The lede for the article lends the impression that some conservatives are finding a tax they actually like:

When Matt Lauer introduced a segment on the booming stock market by asking "is the rising tide lifting all boats?" I braced myself for another MSM excursion into class warfare. But surprise, surprise . . .

CNBC's Erin Burnett narrated the segment, and her opening also made me figure we were in for more bash-the-rich rhetoric. "Another day, another record on Wall Street . . . As stocks rise, it is time to finally ask, who is really making all the money? Who are the winners of the global economic boom?"

Cut to clips of the Dem presidential contenders, including Hillary offering up this bit of class warfare at its pandering worst: "while productivity and corporate profits are up, the fruits of that success just hasn't [sic] reached many of our families. It's like trickle-down economics but without the trickle."

But then came the surprising shift of gears.

CNBC'S ERIN BURNETT: But while the rich are getting richer, you may be too. Here's why: more than half of Americans are invested in the market, whether through a 401(k) plan or buying stocks or mutual funds, and many of those investments are surging. The Dow Jones Industrial Average is up 12% so far this year, and if your retirement plan invested in oil, that alone is up 21%. It's also worth noting that while politicians talk about "two Americas" [get ready to duck, John Edwards] virtually all Americans are seeing wages rise, and unemployment is at an historic low.

Hardly a week goes by without the New York Times editorializing for more government regulation of something or other. But the Grey Lady takes things to another level in its jeremiad of this morning: scolding the Chinese communists for insufficient regulation of their economy.

Now it's true that a variety of defective Chinese products have made their way into international commerce, from, as the Times enumerates, toothpaste sweetened with an industrial solvent [NB: file photo, not of defective brands] to tainted antibiotics. But for entertaining irony, it's hard to beat the spectacle of the New York Times criticizing a communist government for insufficient regulation of its society.

The meme: Income inequality during the Bush Administration has widened, as the rich have gotten ever richer.

A sub-meme: Income inequality during the previous administration lessened, or at least didn’t get any worse.

But facts are stubborn things, as information obtained from the Census Bureau and viewable at the full post shows (scroll down at the link to get to inflation-adjusted data):

On today's "Your World with Neil Cavuto," the host devoted a portion of his mailbag segment to viewers from across the fruited plain telling Cavuto of their local media outlets had ignored or downplayed yesterday's stock market closing. Cavuto noted that in contrast, a large market correction in February was blared on the front pages of the nation's largest broadsheets.

Video (2:26): Real (1.77 MB) or Windows Media (1.50 MB), plus MP3 audio (838 kB).

You can find more coverage on the media's biases on the economy with these articles from NewsBusters sister organization, the MRC's Business & Media Institute:

A new stock market high is good news, right?

“In stock market terms alone, this is now the longest consecutive uninterrupted stock market rally,” said Lawrence Kudlow on MSNBC’s “Morning Joe” on July 13.

“It started in early 2003, so that’s four and a half years. And it’s incredible how much wealth is being created out there and it’s unfortunate, really – almost tragic – that the president just doesn’t get any credit for it at all because he’s got a lot to say on the economy.”

While Kudlow found the record worth cheering, the three major networks supplied "some worries" and "some dark clouds" to viewers on July 12. Each one offered its own spin of gloomy news following the record high closings of the Dow and S&P 500.

"There are still some dark clouds looming over this market," said correspondent Dan Harris on ABC’s "World News with Charles Gibson." "The housing market is in a slump, interest rates are rising and gas prices are ticking back up."

The summer of media love for Al Gore continues in the Washington Post today. An article by Lori Aratani boasts in the sub-heading that “Al Gore’s film has raised awareness of energy conservation, officials say.” The piece is actually on John Morrill, an Arlington County bureaucrat who has, for years, been “touting the cost saving benefits and environmentally friendly nature” of compact fluorescent lamps. He says in the past people ignored him but now, “thanks in part to ‘An Inconvenient Truth’ the issue has a higher profile.” While the article stumbles over itself bestowing platitudes on Al Gore’s “documentary,” it – of course – fails to mention that while Al was busy lecturing America about the evils of carbon emissions, his own house in Tennessee was using over 20 times more energy than the national average.

Apparently, “CBS Evening News” thinks it shouldn’t be your responsibility to remember to balance your checkbook. Anthony Mason’s July 11 report bashed banks for *GASP* profiting from overdraft fees.

“Banks are cashing in on overdrafts, raking in more than $17 billion in fees last year, according to the Center for Responsible Lending” said Mason.

The segment, called "Hidden Charges," did not include comment from the banking industry and it also ignored the risk taken by banks by offering overdraft protection service – which can be a benefit to consumers. Bouncing a check is costly too from what I've heard. 

The Washington Post today reported how the White House expects the federal budget deficit to shrink, but placed it in a five-paragraph story below the fold on page A6. Yet a Reuters story on the same development noted something that the Washington Post's Lori Montgomery left out of her story. The new White House figure of $205 billion "is still higher than many private forecasts, which have pegged the deficit at around $150 billion."

What's more, Post reporter Montgomery included a reference to President Bush crediting his tax cuts with the revenue surge, but added "that has been challenged by many economists." Montgomery failed to name any such economist, much less his/her rationale. After all, if tax revenue is growing at unexpected rates following tax cuts, are there many economists who actually expect tax revenues to roll in at a faster pace when levied at their pre-Bush tax cut levels?

Here’s something you don’t see every day: a member of the mainstream media blaming high gas prices on somebody other than President Bush or Vice President Cheney.

Better strap yourselves in, for the culprit is truly shocking.

Not only did Wednesday’s Washington Post deflect responsibility for the rise in prices paid at the pump away from the White House, much of the blame was actually shifted to – wait for it! – House Speaker Nancy Pelosi (D-California).

I kid you not.

As offered by columnist Al Kamen (h/t Glenn Reynolds, emphasis added):

Today's release of the Institute for Supply Management's Non-Manufacturing Activity Report, which measures business conditions in the 86% of the economy other than manufacturing, came in with a reading of 60.7, after recording a 59.7 last month.

As has been customary, the report whipped the pants off of "expectations." This Thomson Financial article at Forbes predicted a decline to 58.1 instead of the full-point increase that occurred, as did this AFX piece.

This was the 51st consecutive reported month of expansion for the Non-Manufacturing Index (any reading above 50 indicates expansion). It comes on the heels of Monday's ISM Manufacturing Report, which came in at 56, marking the 47th month of expansion in that index in the past 49 months.

So 14% of the economy is expanding nicely, while the other 86% can fairly be said to be nearly booming. Who knew?

(The rest of the post has the detail, including an era-by-era chart.)

The New York Times let go of the media’s “How dare you make that much money,” attitude on July 3 to support a new kind of executive. The green kind.

“The new environmental chiefs are helping companies profit from the push to go green,” wrote Claudia H. Deutsch.

Deutsch’s article supported the concept talking about how it will make money for companies, without mentioning any drawbacks. She also left out the radical left-wing nature of some of the groups mentioned in the story. The only criticism of the new positions came from the left.