Economy

With Hugo Chavez, the Venezuelan strongman and "sulfur sniffer," at the top of the news this week, it's high time to revisit the Business and Media Institute's Special Report on "Hugo the Boss." It can't be argued that the media cheered along with his remarks calling Bush "the devil." But the media's past record certainly underscores that Hugo hasn't exactly been presented as the far-left anti-American agitator now displayed on the world stage. BMI's Dan Gainor assembled a substantial study of TV coverage, and found it very soft:

The Media Research Center’s Business & Media Institute looked at all 139 news and news-related stories on the broadcast networks about Hugo Chavez since he took power in 1998. Here are some of the conclusions:

This is shaping up as a day for lefty unilateralism.  As noted here, liberal LA Times columnist Rosa Brooks saw no nuance in her Bush-hatred fueled tirade against any expansion of permitted techniques in interrogating terrorists.

Later, Good Morning America staged a global warming love-in, in which nary a dissenting voice was heard and the only question was whether it was too late to implement Al Gore's costly nostrums.

Diane Sawyer's guests were Gore and British magnate Richard Branson.  The proximate cause was the announcement that over a recent breakfast, Gore managed to convince Branson to devote 100% of the profits from Virgin Airlines to the effort against global warming [someone check the OJ for Grey Goose].

Wal-Mart shocked the pharmaceutical world Thursday morning announcing that it will cut prescription generic drug prices to $4:

As part of its ongoing commitment to providing more affordable healthcare for America's working families, Wal-Mart Stores, Inc. (NYSE: WMT) today announced that it will make nearly 300 generic drugs available for only $4 per prescription for up to a 30-day supply at commonly prescribed dosages. The program, to be launched on Friday, will be available to customers and associates of the 65 Wal-Mart, Neighborhood Market and Sam's Club pharmacies in Tampa Bay, Fla. area, and will be expanded to the entire state in January 2007.

This program will be available to folks that are insured as well as uninsured. Why is the retail giant doing this:

In a clear attempt to throw cold water on the potential positive economic impact of falling energy prices, an Associated Press article yesterday got sloppy with the credentials of those it sought out for quotes. It also conveyed a false impression that all of those quoted were not impressed with what falling energy prices might do for the economy.
Here is the headline and first paragraph of the article:

Economists Wary of Falling Energy Prices

WASHINGTON (AP) — It should only be this simple: Oil prices plunge 20 percent, leading businesses and consumers to ramp up their spending, which gives a nice jolt to the economy. That seems to be the conventional wisdom on Wall Street right now, where the pullback in energy prices is being cheered by investors. But some contrarians think that view could be missing the point.

But not all of those quoted are economists, and not all of those quoted are contrarians.

Here is the roster of the quoted (not in the same order as the article):

This was not a good day, and probably won't be a good weekend, for those who have been bad-mouthing the economy --

• Drudge reports that retail gas in Missouri is as low as $1.85. Around Cincinnati it's as low as $1.97 - $1.99 (link is dynamic and will obviously change):

• Oil is sliding down towards $62 per barrel.

When Ben Cardin, the Democratic nominee for U.S. Senator from Maryland, appeared on this afternoon's Hardball, host Chris Matthews played a Cardin TV ad most of which was taken up by Cardin informing voters that:

"I always try to do what's right, what's in the best interest of Maryland families: taking on the drug companies, the oil companies, the insurance companies."

Let's first note Cardin's daring admission that he tries to do 'what's right.' Bold stuff! Actually, come to think of the track record of Maryland politicians when it comes to obeying the law, maybe it is a rather maverick position after all.

But moving to the meat of his message, is this the platform that Dems in general and Cardin in particular want to offer voters? Vote for us: we'll attack our country's biggest employers and taxpayers! You might call the platform: Cardin vs. Capitalism.

So, was August a good or poor month for retail sales? It depends on who you ask. Despite that the fact that everyone is working from virtually the same data, different reports are reaching totally opposite conclusions.

Here's the beginning of one of several reports with an ominous tone from the Associated Press (negative words in bold):

Retail sales in August posted the weakest showing in two months as worried consumers curbed their spending habits.

The Commerce Department reported that the nation's retailers saw a tiny 0.2 percent increase last month following a much bigger 1.4 percent rise in July. It was the weakest performance since sales had actually fallen by 0.5 percent in June.

Matt Lauer had a chuckle at the expense of his guests - then took Dems to task.  Michael Smerconish scolded a Republican. And Meredith Vieira gave further evidence of a style looser than that of her perky predecessor.

That's the nutshell wrap on the first half-hour of this morning's Today.

Politics first.  Lauer opened his interview with the chrome-domed duo of James Carville and Philly radio host Michael Smerconish by rubbing his own less-than-hirsute pate and observing with a laugh in the shot captured here: "First time in a long time I feel like I have a luxuriant head of hair."

But things quickly turned serious.  Echoing a sentiment expressed by his rookie sidekick yesterday, Lauer left little doubt he feels the Democrats are squandering an electoral opening by failing to propose sufficient specifics on national security.  Lauer to Carville: "if you [Dems] ever had an opportunity to take advantage of it, it's now, and the Democrats can't get their act together."

An excerpt from my latest item up at the MRC's BusinessandMedia.org Web site. See my article for more, including links to external content:

The recent discovery of new oil reserves in the Gulf of Mexico was the perfect excuse for CNN’s Jack Cafferty to revisit his election-year conspiracy theory. But when the September 9 "In the Money" aired, the program’s panelists talked to an oil analyst about the future of oil and gas prices, leaving out the idea of a Big Oil-GOP axis of petrol. 

"You know, if you were a real cynic, you could also wonder if the oil companies might not be pulling the price of gas down to help the Republicans get re-elected in the midterm elections a couple of months away," Cafferty suggested on the August 30 "Situation Room," just five days before the Chevron (NYSE: CVX) oil discovery. 

Paul Krugman is right about one thing, "We are, finally, having a national discussion about inequality." This thanks to liberals such as himself who have dragged the issue front and center, using as their springboard statistics suggesting wages aren't rising as fast as profits or productivity.

At the end of his subscription-required column of today, Whining Over Discontent, Krugman indulges in a bit of 'bring it on bravado', claiming that "[we liberals have] got the arguments, and the facts, to win this debate."

But just which debate is he talking about? Let's assume, arguendo, that Krugman & Lefty Co. can prove that inequality is increasing. As we would say back in the old days in the Bronx: "nu?" So what?

Yet another case of a reporter not giving you all the facts.

CNN's Christine Romans tried to pass off a Boston area woman, Abby Subak, as merely a "mother of two" concerned about the death of the American Dream.

I thought it fit all too neatly into Romans's story, which hyped the findings of a liberal think tank critical of the Bush economy. Well, sure enough, an Internet search showed that this woman just so happened to have worked before for Ralph Nader's PIRG.

Here's a taste from my latest article available at the MRC's BusinessandMedia.org:

Here are some of the headlines actually used in coverage of Tuesday's Office of Federal Housing Enterprise Oversight (OFHEO) report (PDF) showing a 1.17% increase in second-quarter home prices:

• USA Today: "Growth in home prices show(s) sharp slowdown in 2Q"
• Boston Globe: "Home prices show huge slowdown"
• New York Times: "Home Prices Fall in Nearly One-Fourth of Metropolitan Regions"
• Associated Press: "Home prices show sharp slowdown"
• The Street.com: "US Home Prices Inch Ahead"
• (The winner, Domestic Division, for most obvious unbridled and uncalled-for pessimism, which appears to have the fingerprints of former CNN and Wall Street Journal uber-liberal Al Hunt all over it) Bloomberg: "US Home-Price Gains Slow as Housing Slump Deepens"
• (The International winner for hare-brained hysteria) Toronto Globe and Mail: "The housing collapse heard round the world"
• Newsday (using Bloomberg content): "Home price growth takes dive"

Enough already.

Here is context missing from the reporting. The table below shows quarterly, annualized quarterly, and previous four-quarter home price increases during the 1990s, before 2000's bubble economy and the post-September 11, 2001 interest-rate declines sparked a few years of strong home-price growth followed by a two-year-plus price boom:

I described the August employment news as "good, not great" on Friday.

Larry Kudlow was more upbeat, and has a point:

The August jobs report should put to rest any fears that the economy is burning out. Following upwardly revised increases for June (134,000) and July (121,000), companies added 128,000 nonfarm payrolls last month. Meanwhile, the all-important but rarely mentioned household survey of people working gained by 250,000, sending the unemployment rate back to 4.7 percent from the July reading of 4.8 percent.

The cult of the bear, fussing about a housing-related recession, has once more been proven wrong.

The August employment showed once again that, with rare exception, there has been a fundamental disconnect between the number of new jobs reported in the Establishment Survey (phone calls to employers) compared to the Household Survey (calls to households). It's a difference that has been building since the economy began righting itself after enduring and adjusting to the trauma of the September 11, 2001 attacks.

Update: corrected from earlier version that said Florida's minimum wage is $6.55-per-hour. It's $6.40-per-hour, but the woman featured in Armour's story earns 15 cents above the minimum wage at $6.55.

For the full story, see the MRC's BusinessandMedia.org Web site:

“Identify sources whenever feasible. The public is entitled to as much information as possible on sources' reliability,” the Society of Professional Journalists (SPJ) advises its members.

That’s not how USA Today reporter Stephanie Armour’s September 5 story on “living with the minimum wage” appeared in the paper. The full-page story and photo essay told how hard it is to live on a paycheck close to Florida’s minimum wage of $6.40 an hour. It left out that the star of the piece – depicted simply as a “low wage” worker who makes $6.55 an hour – was an activist for a group that advocates a wage increase.

An update to Megan McCormack's blog posting from last week.

Apparently Jack Cafferty's colleagues, ostensibly knowledgeful business reporters, like Jack's kooky conspiracy idea that Big Oil is driving down gas prices in time to engender good will for the GOP:

Maybe it could be called “The Conspiracy Hour with Jack Cafferty.” On the September 2 “In the Money,” the program’s host recycled his theory that gas prices are dropping because of scheming oil companies.

“You know, if you were a real cynic, you could also wonder if the oil companies might not be pulling the price of gas down to help the Republicans get re-elected in the midterm elections a couple of months away,” Cafferty suggested just a few days earlier on the August 30 “Situation Room.”

The Brahmins might no longer rule the Bay State, but their tradition lives on in the editorial room of the Boston Globe. And what better occasion than Labor Day for the elitist Globe to condescend to workers in a manner that might have brought a smile to the lips of a Lowell or Cabot?

The topic of Labor Day, 2006 is one in great fashion in MSM circles: the horrors of Wal-Mart - and the joys of unionism. According to the Globe, "unionized workers earn on average $1.52 an hour more than those in similar occupations without union representation."

Alack - in the Globe's mind - Wal-Mart workers are too dumb to realize this. With a paternalistic pat on the head, the Globe observes: "[Wal-Mart] employees don't like to think they are patsies." Translation: they are patsies; they're just not smart enough to realize it.

That's not a typo in the headline.  According to this Wall Street Journal article reprinted in the Star-Telegram, "on average, GM pays $81.18 an hour in wages and benefits to U.S. hourly workers, including pension and retiree medical costs."

But in his vituperative rant against the Big Three U.S. automakers, Boston Globe columnist Derrick Z. Jackson manages to ignore the huge labor cost advantage enjoyed by non-union Toyota.

How much of an advantage?  According to that same article, "Harbour Consulting President Ron Harbour estimates Toyota's total hourly U.S. labor costs, with benefits, at about $35 an hour."  That's right, GM's average labor costs are 130% higher than that of the US operations of its Japanese rival.  That translates into a $1,000/vehicle average labor-cost advantage enjoyed by Toyota. Thank you, UAW!

I kept waiting.  Dutifully wading through Paul Krugman's subscription-required kvetch over the economy, The Big Disconnect, I figured I'd eventually be rewarded for my perseverence with his proposed solutions - if only to be able to critique them.  But the New York Times columnist's economic nostrums never came.

Krugman's basic complaint is that workers haven't shared in the fruits of the extended economic expansion.  This is Krugman being late to the MSM party noted here, here, and here. Even so, he chooses to ignore the reporting in his own paper that flatly contradicts his own allegation that "most workers have seen their wages lag behind inflation and their benefits deteriorate."  As Ken Shepherd of NB and MRC noted yesterday, the New York Times itself has acknowledged that, as per recently released data, wages are actually increasing at a 7% annual rate even when adjusted for inflation!"

Harry's finally catching on:

CBS News veteran Harry Smith finally confessed something that the Business & Media Institute (BMI) have reported for a while and his colleagues elsewhere in the media have already picked up on: gas prices are on a downward trend.

"It seems like a month ago we were all screaming with our hair on fire about the price of gas going over $3, no end in sight. And now it looks like it's dropping like a stone," CBS’s Harry Smith marveled on the August 31 edition of "The Early Show."

New York Times reporter David Leonhardt had to make an about-face on the economy in today's New York Times:

What a difference three days make. 72 little hours. In that time, a New York Times reporter went from tolling the death knell of real wage growth to reporting a 7-percent wage jump over last year after inflation. "[T]he current expansion has a chance to become the first sustained period of economic growth since World War II that fails to offer a prolonged increase in real wages," The New York Times’ David Leonhardt and Steven Greenhouse somberly noted in their page A6 article in the August 28 edition. Greenhouse and Leonhardt added a political spin to data showing the "median hourly wage" dipping "2 percent since 2003, after factoring in inflation." "That situation is adding to fears among Republicans that the economy will hurt vulnerable incumbents in this year’s midterm elections," the correspondents argued before remarking that "wages and salaries now make up the lowest share of the nation’s gross domestic product." But new data released on August 30 pushed Leonhardt to admit the death of wage growth he wrote about earlier might be greatly exaggerated.

If 'Today' were ever to air the opinions of a think tank co-founded, say, by a former Reagan administration official and free-market economist Milton Friedman, and funded by large corporations, it's inconceivable that the show would fail to identify the organization's conservative leanings.

Yet Today didn't feel the need to do the obverse when relying extensively - for purposes of talking down the economy - on a liberal think tank founded by a former Clinton official and far-left economists and largely funded by Big Labor.

From a New York Times editorial to a Boston Globe political cartoon, the MSM has been beating the drum this week to talk down the economy in the face of more good economic news. The liberal theme du jour has been that wages haven't risen along with corporate profits.

Shades of William Jennings Byran's 'Cross of Gold'! The Globe didn't go totally Mel Gibson's 'Passion' on us this morning. But Dan Wasserman's cartoon does show workers being hung by the hands on rising corporate profits. This was the Globe's subtle way of commenting on news it reported yesterday that wages aren't rising as fast as profits. The Globe predictably overlooks the fact pointed out in this Investor's Business Daily article that:

Ah, the MSM, where bad news is good, and good news . . . can't be allowed to go unchallenged. So long as a Republican is in office, that is.

Take gas prices. Over the last year the MSM has had a field day with a profusion of stories on 'soaring gas prices.' 'Today' reached an absurd apotheosis on August 7th. As reported here, Ann Curry envisioned the absolute worst: a decrease of less than 1/200th in world oil supplies leading to more than a 1/7th jump in crude oil prices - a 1:28 cause-and-effect ratio. In dollar terms, Curry fretted over the possibility that the shutdown of a BP pipeline in Alaska could cause crude oil prices to leap $10/barrel.

We've been tracking prices since then and providing regular updates at the original column. Guess what? Crude was about $75/barrel on the day of Ann's report. Since then, rather than spiking to her imagined $85/barrel, it has slumped to $69 and change. Whoops!

A New York Times editorial and an op-ed piece by one of its house columnists have something interesting in common this morning: stamp-your-feet frustration with the way the world is and an inability to suggest what should be done about it.

In The Falling Paycheck, the Times editorial board complains that real wages aren't keeping up with the economy's continued expansion. "American employees have not shared in the wealth they’ve helped to create," laments the Old Gray Lady. Sure sounds as if the Times subscribes to the 'surplus value' theory of labor. And we know who came up with that.

To reduce the number of people trying to enter the US illegally . . . pay them more once they get here. Sound illogical? Not if you're a Boston Globe editorialist.

You knew where this editorial was headed from the headline, 'Scapegoating Immigrants,' and if there was any doubt, when a few short paras in the editorial referred to 'undocumented workers' rather than illegal immigrants, you could have stopped right there. For that matter, you might have saved yourself the time when you picked up the paper, or opened to the web site, and noticed that it read 'The Boston Globe' at the top.

"Comrade. Potato production 70% below target for 4th year in row in five-year plan!"

"True, Kommissar. But we have solution. Will implement training and preparation program for workers!"

"Budem - let's drink!"

The ostensible purpose of this morning's New York Times editorial was to exult at the results of a study finding that 4th-grade charter school students performed worse than their public school counterparts, even when controlling for socio-economic background. Like a tiger on the smallest of mice, the Times pounced on this one result to proclaim that it was "Exploding the Charter School Myth." As an unreconstructed supporter of the union-dominated public school oligopoly, the Times naturally welcomes any evidence that there is no reason to alter the existing paradigm.

From MarketWatch (link requires free registration):

July was dry for the U.S. real estate market, as sales of existing homes plunged 4.1% to a two-year low, prices stagnated and the number of homes on the market soared to a 13-year high, according to a report from the National Association of Realtors released Wednesday.

The report shows a continued implosion in the housing market, with inventories up sharply while prices are softening. Sales are down 11.4% in the past year to a seasonally adjusted annual rate of 6.33 million compared with 6.60 million in June.

OK, not pretty. But in historical context, it simply is not as ugly as indicated:

Breaking news from the New York Times: tobacco is bad for you!  Of course you didn't know that.  Rubes like you [probably the same kind of people dumb enough to have voted for Republicans over the years] likely think tobacco has roughly the same the health impact of bean sprouts washed down with OJ.  That's because you've fallen victim to the tobacco industry's "half-century of deception."  And the Times is plenty mad about it.

In Tobacco Racketeers Get Off Easy, the Times stamps its editorial feet this morning, frustrated by the judge's rulings in a suit accusing Big Tobacco under racketeering statutes.  The judge had earlier denied the $280 billion penalty originally sought, and has now turned thumbs down on "the modest billions sought by prosecutors."

Fulminates the Times: "The prospects for reining in this rogue industry seem limited unless Congress finds the gumption to crack down — or top tobacco executives develop a conscience and decide to get out of the death-dealing business."

Ah, a government crack-down on business. Enough to warm the cockles a of big-government liberal's heart. Yesterday it was Robert Kuttner over at the Times-owned Boston Globe, militating for a crack-down on that threat to all things good - Walmart.  Today it's the Times' turn vis a vis the tobacco industry.

Did the MSM get together and decide this would be Bad Economics Saturday?  As I noted here, the New York Times emitted an editorial this morning grimly imagining a downturn despite the good economic news.

Over at the Boston Globe, Robert Kuttner has chipped in with More than Wal-Mart.  While applauding the efforts of Dem politicians to go after the country's biggest retailer, Kuttner claims that isn't nearly enough.  He wants much more government regulation of the economy, and higher taxes for the 'rich'.

Annotated excerpts:

"[Wal-Mart's] wages and health benefits are dismal.  Wal-Mart batters down wages."