NewsBusters and affiliate The Business & Media Institute have been reporting for many months the continuous, bearish assessments of economic gloom and doom by America's press.
Of course, this all comes despite 24 straight quarters of Gross Domestic Product growth, 50 consecutive months of job gains, higher wages for virtually all Americans, and last month's consumer spending explosion.
Ignoring all this Sunday morning were panelists on "The Chris Matthews Show" who demonstrated such a deplorable lack of economic acumen that maybe they shouldn't be allowed to comment on such matters when cameras and microphones are on.
Between railroad tracks and beneath the roar of departing planes sits "tent city," a terminus for homeless people. It is not, as might be expected, in a blighted city center, but in the once-booming suburbia of Southern California.
The noisy, dusty camp sprang up in July with 20 residents and now numbers 200 people, including several children, growing as this region east of Los Angeles has been hit by the U.S. housing crisis.
The unraveling of the region known as the Inland Empire reads like a 21st century version of "The Grapes of Wrath," John Steinbeck's novel about families driven from their lands by the Great Depression.
When Larry Summers suggested in early 2005 that, as paraphrased by Slate's William Saletan, "innate differences between the sexes might help explain why relatively few women become professional scientists or engineers," the outcry was immediate, furious, and went to saturation level virtually overnight. The controversy ultimately led to his resignation a year later as Harvard President.
On Wednesday, Mr. Summers, a Democrat who was once Treasury Secretary under Bill Clinton, made a recommendation in his area of expertise -- that is, that a tax cut would be a good idea to protect against a possible recession. (Yours truly doesn't believe that a recession is anywhere near occurring. But hey, I've said since May, and several times since [here, here, and here, among others] that a tax cut is needed anyway to keep the economy chugging along at a good rate. So if panicked pols want to enact a tax cut for the wrong reason, I'll take it.)
Old Media reaction to Summers has been virtual silence.
Steve Fraser might look mild-mannered, but when it comes to economic doomsaying, he is the Rocky Marciano of recession, the Tiger Woods of turndown, the David Beckham of depression.
Speaking of bending one, Fraser's LA Times column of today, "Symptoms of an Economic Depression," twists U.S. economic data into a harbinger of impending doom. Fraser begins by falsely claiming that "no one wants to utter the word 'depression.'" In fact, Fraser himself, a left-wing labor historian, wants not merely to utter it, but to bellow the word with a 10,000 megawatt bullhorn. Why? Because, as he gleefully predicts in that same column:
This perfect storm [of a bad economy] will be upon us just as the election season heats up, and it will inevitably hasten the already well-advanced implosion of the Republican Party.
In "Wall St. Sees Silver Lining," new New York Times economics reporter Peter Goodman (formerly of the Washington Post) made Saturday's front page with a "news analysis" that impressively managed to put last week's big stock market rally in the context of an "ailing economy" that was "imperiled by the crumbling housing market."
Can the media talk a recession into existence? I wrote yesterday about journalists' endless repetition of the prediction. They've been mentioning it almost once a day for the past month, despite the Federal Reserve's declaration that '08 would NOT see the r-word. Even The New York Times ran the headline "Fed Expecting '08 Slowdown, Not Recession" (November 21)!
The quarterly report on home prices issued by the government's Office for Housing Enterprise Oversight (OFHEO) is the most comprehensive and most reliable measure available of what is happening in the housing market.
For the first time in nearly thirteen years, U.S. home prices experienced a quarterly decline. The OFHEO House Price Index (HPI), which is based on data from sales and refinance transactions, was 0.4 percent lower in the third quarter than in the second quarter of 2007. This is similar to the quarterly decline of 0.3 percent (seasonally-adjusted) shown in the purchase-only index. The annual price change, comparing the third quarter of 2007 to the same period last year showed an increase of 1.8 percent, the lowest four-quarter increase since 1995. OFHEO’s purchase-only index, which is based solely on purchase price data, indicates the same rate of appreciation over the last year.
As the 2008 election approaches, the New York Times uses the image of a sinking red "RECE$$ION" to communicate a fear that is so far only a phantom menace. Peter Goodman's Sunday Week in Review cover story, "Trying to Guess What Happens Next," displayed plenty of pessimism about the U.S. economy after years of foreign-financed easy money.
But the accompanying graphic communicated even more starkly the feeling the Times no doubt wanted to convey -- a fearful, sinking feeling among U.S. consumers (and November voters). The top half of the page was dominated by white space, with the big red word "RECE$$ION" sinking below the horizon.
Is there a single economist who thinks the U.S. economy, with inflation tamed for now and a low unemployment rate, is currently in recession? Not even Goodman himself goes that far, though his pessimism seems pretty overblown.
*****Update at end of post includes detailed response to unhappy e-mail messages concerning this subject.
As someone that has done a lot of economic writing and financial media analysis, I'm used to gloom and doom from journalists.
However, Saturday's Associated Press article concerning the credit crunch and how it's impacting the mortgage market could be the worst example of economic and financial misreporting and exaggeration I've seen since the press universally forecast an economic downturn after Hurricane Katrina hit New Orleans.
Entitled "Have We Seen the Worst of the Mortgage Crisis," Joe Bel Bruno's piece actually suggested that a depression could be looming, and that housing prices in some areas could decline by 40 percent (emphasis added):
But on that night, one network (ABC) interpreted the data differently from the others about Stockton, Calif., the city with the nation's highest foreclosure statistics. "NBC Nightly News" and "CBS Evening News" reported 1 in 31 homes were in foreclosure and ABC "World News with Charles Gibson" reported 1 in 49 homes were in foreclosure.
According to RealtyTrac's Rick Sharga both numbers were "technically" correct, but the ABC report used the number for "unique household" – making its report more accurate.
Christmas is still nearly seven weeks away, and already the media are offering a “Bah, Humbug” for retail sales and the U.S. economy.
CNN shoveled coal at the positive economic news on November 2 and immediately moved into full Grinch mode.
“You know, just earlier this week the broadest measure of the economy, Kyra, the GDP, came in at 3.9 percent, stronger than expected. What’s working against it, though, the financials, concerns that we’re going to have a lot more carnage coming from that very important sector, consumer spending …” said “Newsroom” correspondent Susan Lisovicz.
On September 24 of this year, Alexis Christoforous of “CBS Morning News” warned, “It could be a blue Christmas for many of the nation’s retailers.”
Cramer, host of the CNBC’s “Mad Money” called liberal Democratic New York State Attorney General Andrew Cuomo as “communist” on CNBC’s November 7 “Street Signs.”
“[W]itness the fact that right now, the most important man in America for the stock market – the most important man and I mean it negatively is this guy Andrew Cuomo, the New York State Attorney General,” Cramer said. “I’m getting tired of the New York State Attorney General being the most important man in America.”
Talk about talking down the economy! No fewer than three times today, Matt Lauer invited Barack Obama to declare that the U.S. economy is headed into recession. At the end of a "Today" interview that focused largely on Hillary-related issues and Iran, Lauer turned to the economy and pressed Obama to predict the worst.
Over the last year, Angelo Mozilo, CEO of Countrywide (NYSE:CFC), decided to periodically sell some of the stock he owns in the company he co-founded 40 years ago and what is now the nation's largest mortgage lender – part of a prearranged measure known as a 10b5-1 trading plan. This was all done to prepare him for his December 2009 retirement date.
Despite his upcoming retirement, that drew the ire of some liberal pro-union groups and CBS’s Anthony Mason, whereas anyone defending his decision to sell his stock was not found in Mason’s report.
This week marks the unhappy milestone of Black Monday for Wall Street, which had some journalists warning “it could” happen again. Even if it doesn’t, the media hammered home the prospect of a possible recession.
The Dow Jones Industrial Average nosedived Oct. 19, 1987, when panicked selling cost investors 22.6 percent in one day of panicked selling. But do investors in 2007 need to be worried about another crash?
ABC anchor Charles Gibson twice pushed reluctant guest expert Sam Stovall, chief investment strategist at Standard & Poor's, to agree that high oil prices and the housing “crisis” will soon lead to a recession. On Tuesday's World News, Gibson outlined: “So, the housing crisis, the Treasury Secretary says it's a significant risk to the economy, the Fed Chairman says it's a significant drag on the economy, we have oil prices over $80 a barrel. Sam, isn't that a classic formula for a recession?” Stovall replied that “what I think is encouraging investors is the pro-activeness of the Fed and government officials by making sure that they get ahead of the curve and fend off the recession.” But Gibson was undeterred from his pessimistic assumptions and pressed again about whether the economy is “really broad-based enough to endure this kind of oil price hike and this kind of housing crisis and not have a recession?” Stovall maintained that oil and housing have impacted the economy, yet “our feeling is we'll probably...get away unscathed.”
It has been regularly reported by NewsBusters that media are doing everything in their power to withhold from the public the financial ramifications of global warming alarmism.
Be it the marketing of totally useless carbon offsets, or proposals for additional taxes on consumers and corporations, press outlets have been seemingly coordinated in their silence regarding such matters.
Another fine example of such a boycott occurred last week when House Energy and Commerce Committee chair John Dingell (D-MI) discussed a rather elaborate tax plan with the Associated Press Wednesday that virtually no major media outlet outside of Detroit bothered to report (emphasis added throughout):
You read that right (or left), Baker says the heck with the 5th Amendment protection against being "deprived of life, liberty, or property, without due process of law." If someone borrowed too much or won't pay the mortgage, that's OK with Baker, the co-director of the left-wing economic think tank the Center for Economic and Policy Research.
The culprit is, of course, global warming. Dingell heads the House Energy and Commerce Committee and has been looking for ways to appease the Gore wing of the party without hurting the auto manufacturers Dingell represents. "In order to address the issue of climate change, we must address the issue of consumption," he said in the article.
The Los Angeles Times reported a run of Countrywide Bank by its customers as more and more are panicked about the potential of the nation’s largest home lender to go bankruptcy – something fueled by many of the reports in the media.
“[S]ales of existing homes fell in 41 states from April through June,” said CBS correspondent Susan McGinnis on the August 16 “The Early Show.” “Meanwhile, foreclosures continue to soar. And there are growing worries about the nation's biggest mortgage lender; Countrywide Financial could be forced into bankruptcy.”
But some experts seem to think this scare from the media over Countrywide’s bankruptcy is a little premature.
In a recent blog post by CBS Evening News correspondent Cynthia Bowers we find that she has had some problems with the housing market herself. Bowers apparently didn’t grasp the fact that her Adjustable Rate Mortgage (ARM) can actually adjust:
“For a while we were okay. Then that Fed rate started going up, and so did our ARM. Over a five-month period it increased the cost of our monthly mortgage by nearly 40%!” Bowers wrote.
But Bowers shouldn’t have been surprised about her rate adjustment. According to Nexis, Cynthia Bowers has been reporting on the mortgage and housing market since at least 1997. With a decade of industry reporting under her belt, you’d think she’d be able to anticipate the fact that rates shift and payments adjust.
CNBC’s Jim Cramer went on an impassioned rant August 6 calling for the Fed to reduce interest rates.
“Bernanke needs to open the discount window. That is how bad things are out there … in the fixed income markets we have Armageddon,” said Cramer on “Stop Trading!” Following Cramers’ rant, NBC brought him on “Today” to analyze the economy August 10.
NBC’s Meredith Vieira asked “Are the markets about to crash?” on the August 10 “Today” show.
“Crashing” stock market? “Legalized gambling”? ABC’s “Good Morning America” berated the stock market for trampling on a supposed individual right to a mortgage.
Chris Cuomo’s August 13 story on a couple who had their mortgage pulled due the recent “drama on Wall Street” started like this:
“To a certain extent the stock market has always been a form of legalized gambling, where Wall Street tries to cash in on bets made on the right companies. But for many financial institutions, the chips were the mortgages of hard-working American families, in danger of losing their homes, or now never getting a chance to live the American dream.”
At OpinionJournal.com on Thursday ("Fair but Unbalanced -- How the media promote false pessimism about the economy"), Brian Wesbury, who has written several times on the disconnect between the strong economy and the public's perception of it (previous references here, here, here, here, and here), had another generally stellar column about what is nonetheless a relatively small piece of the problem.
Wesbury ascribes much of the disconnect to TV's need for "balance," when giving positive and negative views equal weight is often in reality unbalanced:
If one guest or expert is a "bull," then the other must be a "bear," to keep things fair. Or, if there is a single guest on air, the host often takes the other side of the issue in order to keep things balanced. Get some sparks between guests, a little argument here or there, and it's even better for the ratings. The bigger the audience, the better the show, that's the way the advertisers see it. It's basic supply and demand.
But this idea of presenting both sides of an issue, while entertaining, informative and seemingly balanced, may paradoxically create a warped perspective of the economy.