When Democrat presidential candidate Walter Mondale announced in his October 1984 debate with former President Reagan that he would raise taxes if elected, his campaign was over, and he ended up losing one of the biggest election routs in American history.
As Barack Obama prepares to offer the nation his deficit reduction plan Wednesday, it is widely believed he is going to recommend tax hikes on at least the upper wage earners in this nation.
If this is true, is he repeating Mondale's mistake less than nineteen months before Election Day? Are Americans hungrier for tax increases now than they were 27 years ago?
New York Times columnist Paul Krugman was in his predictable defend Obama at all costs mode on Sunday's "This Week."
When former Bush administration official Torie Clarke said unemployment remains high because the private sector is concerned about future regulations, the Nobel Laureate scoffed, "All of this stuff about uncertainty is just a myth being made up to blame this on Obama" (video follows with transcript and commentary):
Former Clinton labor secretary Robert Reich wrote a truly nonsensical piece for the Huffington Post Tuesday ironically called "The Republicans' Big Lies About Jobs."
MSNBC's Chris Matthews must have loved this tripe and its sophomoric title for he invited the Berkeley professor on Wednesday's "Hardball" so that the pair could put on a clinic in liberal economic fantasy (video follows with partial transcript and oodles of commentary):
What Kravitz's story doesn't carry is the word "existing." How odd, since the National Association of Realtors (NAR) which produces the report, calls it "Existing-Home Sales" at the report's home web page, and labels the data "Existing Home Sales" in two different places in the detailed data.
It would be one thing if Kravitz were, as he may be, "merely" trying to keep his bad-news report from being found by search engine users looking for related sales news; a search on "existing" at the AP's home site does not return Kravitz's report. But his dispatch's headline is unclear as to which type of sales are even involved (new or existing?), and his repeated use of the term "previously occupied homes" instead of "existing" might lead some readers to believe that the data involved exclude homes which have been vacant for some time, which is not the case.
Here are excerpts from Kravitz's crummy job, which also contains something that is more predictable than the weather, i.e., a weather-related excuse:
Most readers here aren't aware that Associated Press reporters began withholding their bylines this week in support of their union's "quality journalism proposals." Participating reporters are refusing to have their name placed on AP stories. It appears to apply to stories datelined in the U.S. and not overseas (as seen here).
It is truly a wonder that the world has gone on while AP reporters refuse to tell us who wrote the wire service's U.S. stories (/sarc).
The byline strike springs from the wire service's refusal, among other things, according to the News Media Guild, the union which represents AP newsroom personnel, to accept a "fixed-cost pension plan." The AP wants a defined-contribution plan (i.e., something similar or identical to a 401(k)).
Here are some economy, business, and political "gems" appearing at AP during the past few days which can't be traced to a specific reporter:
Although it would be unfair to characterize Derek Kravitz's report at the Associated Press this morning on the Census Bureau's new home sales report as anything but bleak, the AP reporter missed what should have been the most obvious stat: The 19,000 new homes actually sold nationwide in January 2011 (i.e., not seasonally adjusted, real number) is the lowest for any single month on record in the 48 years the Bureau has been reporting this information.
Kravitz also demonstrated that he has picked up a couple of bad habits the AP's Martin Crutsinger displayed when reporting on news home sales during several previous months. First, he set the bar which would represent a legitimate industry recovery artificially low. Second, he gave readers the impression that the current housing market is better than it was a "nearly half-century" ago, which of course it isn't.
Here are several paragraphs from Kravitz's creation:
On Wednesday, with a bit of an assist from the Census Bureau's seasonalizers, the Associated Press's Derek Kravitz, with the help of Martin Crutsinger, covered the Bureau's just-published January data on housing starts and building permits. Though no one could accuse the AP pair of excessive cheerleading, they missed the most important comparison: How did January 2011 compare to January 2010? The answer: It was worse.
Not content with casting doubt on charges made by New York City Councilman Daniel Halloran, Republican of Queens, of a union-authorized work slowdown during the infamous blizzard that hit Manhattan the day after Christmas, New York Times reporters Russ Buettner and William Rashbaum dove into his personal finances to discredit him in Wednesday’s “Evidence Is Elusive on Charge Of a Blizzard Work Slowdown.”
Given the importance the Times evidently places on the financial situation of the wives of its subjects, one wonders about the paper's casual attitude when one of its own economics reporters, Edmund Andrews, wrote “Busted,” a May 2009 book about his own personal mortgage crisis that denounced greedy banks, yet left out his wife's previous two bankruptcies.
The story rocketed around New York City when streets went uncleared after the Dec. 26 blizzard: Sanitation workers, angry about job reductions, had deliberately staged a work slowdown.
It resulted in wisecracks on “Saturday Night Live,” fiery denunciations of unions on cable news and four criminal investigations.
And it occurred because one man, Councilman Daniel J. Halloran, Republican of Queens, said five city workers had come to his office during the storm and told him they had been explicitly ordered to take part in a slowdown to embarrass Mayor Michael R. Bloomberg.
To those who follow the news fairly closely and look at underlying reports, CNN's email alerts are sometimes entertaining. Much less frequently are the accurate and informative.
Even though they tend not to realize it, those who don't follow the news closely and attempt to stay informed by relying on CNN's alerts are regularly deceived by the network that used to call itself "the most trusted name in news."
An example of such deception arrived in my e-mail box yesterday:
At several points in 2010 (just one example: at NewsBusters; at BizzyBlog; graphic), I pointed out that despite the federal government's continued insistence that its budget deficit for fiscal 2010 was on track to come in lower than fiscal 2009, the deficit based on real spending would be, and turned out to be, higher in fiscal 2010. That's important to know, as clever year-crossing accounting entries can't change the fact that Uncle Sam's financial situation continues to worsen at an accelerating rate. Don't expect the establishment press to acknowledge this; the illusion of improvement is important to getting their propped-up president another four years.
Similarly, it may be futile to expect that establishment media outlets, especially the Associated Press, will ever report that 2010 was the worst yearby far in new home construction since World War II. That this is indeed the case was shown last month (at NewsBusters; at BizzyBlog). This post will use December 2010 data, most of which is now in, to add an exclamation point.
Yesterday, the AP's Winston Smith-like headline writers tried to pass off 2010 as bad, but not as bad as 2009. As is the case with the government's annual budget deficit, the AP's persistent prevarication in the face of drop-dead obvious facts is an attempt to make readers, listeners and viewers believe that as bad as things are, they're at least improving (with implication, of course, that our poor, put-upon president is making progress cleaning up what was supposedly George Bush's mess). Things are not getting better, and Martin Crutsinger's narrative in the related article stops just short of saying so.
The folks in the establishment press are looking for any sign of upward movement in the housing market, especially in new home construction, that they can portray positively as the beginning of a general recovery.
That desperate search explains the content of the following e-mail alert from CNN which arrived in my inbox this morning:
In its reports about the U.S. homebuilding industry and new home sales, the Associated Press has gotten lazy and/or deliberately deceptive. In doing so, it is giving readers, listeners and viewers at its subscribing outlets a completely incorrect impression that the industry and market are getting off the mat after recently being in their worst shape, in their words, "in 47 years." After identifying offending examples, I will demonstrate that industry activity and sales during 2010 have been almost undoubtedly at their lowest levels since World War II.
The following items, all from Thursday, demonstrate AP's concerted attempt to limit the damage to "47 years" ago.
2010 will be by far the worst ever in the 48 years records of new home sales have been kept, and there is little if any reason to believe things will get better soon. The news on existing home sales has hardly been better, given the price reductions sellers have had to make to move their homes. Graphics will follow shortly indicating just how bad the market for new and existing homes has been this year.
These on-the-ground realities explains why one's jaw has to almost hit the ground when reading the headline and first few paragraphs of Julie Schmit's December 23 front-pager in USA Today's Money section:
Optimism for home sales adds up Demand for existing houses continues to rise
Leave it to the Associated Press, with the assistance of the "magic" of seasonal adjustments, to make the November housing market appear as if it was a bit better than the two months that preceded it. It wasn't.
Thursday, the wire service grabbed the single crumb that was available, namely the Census Bureau's report earlier that day that annualized, seasonally adjusted housing starts had increased by about 4% and turned it into a decidedly positive headline: "Home construction up after 2 months of declines."
AP Economics Writer Jeannine Aversa watered down the headline in her very first sentence, describing the "up" part of the headline as a "nudge."
That's nowhere near enough. The available evidence indicates that November may have been the worst month the homebuilding industry has had in 4-5 decades of related recordkeeping.
There are many annoying aspects of the sea change in media coverage of the economy since Barack Obama became president. At or near the top of the list is how the business press has downplayed the unprecedented housing industry disaster, while lowering the bar that will supposedly represent a real recovery to ridiculous levels.
According the the Census Bureau (12-page PDF), 23,000 new homes were sold nationwide in October. That figure ties August 2010 and December 1966 (when the population was 35% smaller) for is the lowest single month since records have been kept. More extensive evidence of how bad things are will come after the jump.
On Wednesday, the Associated Press's Martin Crutsinger provided as good an example as any of the press template for housing coverage -- acknowledge that, yes, things are really bad; give readers an absurdly low benchmark for what would represent real improvement and how long it should take to get there; locate some "expert" to say it's really not all that bad; and find some kind of anecdote somewhere, anywhere, that will leave the impression that things might somehow be getting better:
That's bad enough. But a Tuesday report covering the latest release of the Housing Market Index (HMI) by the National Association of Home Builders demonstrates how utterly determined the wire service is to put gobs of lipstick on a very ugly pig.
For context, I'll show readers the complete 25-year history of said index.
Gosh, what's a bigger story -- that to the extent it was ever happening at all the housing recovery "seems to have been aborted," or that according to the government there was very little inflation in October?
When a Democrat or leftist makes an ill-advised remark, it seems that there's a three-stage process at the Associated Press, and perhaps in most other establishment press outlets, for handling it. It goes roughly like this:
Stage 1 - Ignore it as long as you can. If there isn't much outcry, keep ignoring it.
Stage 2 - If there ends up being enough of an outcry from conservatives or Republicans to warrant coverage, make sure that the story is about the criticism at least as much as the remark.
Stage 3 - In the ensuing coverage, leave out what was originally said.
The Associated Press is currently and grudgingly at Stage 2 with Harry Reid's remark that "but for me, we'd be in a worldwide depression," as seen below (reproduced in full for fair use and discussion purposes):
In a report so riddled with errors, inconsistencies, incompleteness and sloppiness that it's really hard to know where to begin, Associated Press real estate writer Alan Zibel couldn't even keep his housing recovery benchmark remotely consistent with what it was only a month ago.
The Census Bureau's September release of information about August housing starts and building permits informed the country that those items came in at seasonally adjusted annual rates of 598,000 and 569,000, respectively (they were revised slightly upward in yesterday's reports covering September).
On September 21, after disclosing the housing starts number, but not the one for permits, Zibel quoted Paul Dales, U.S. economist with Capital Economics, who said:
"Homebuilding activity remains at an astoundingly weak level," Dales said, adding that construction has to be more than double current levels for the market to be considered healthy.
My math says that means that annualized starts have to reach more than 1.2 million before health returns.
There is a simple explanation for President Obama's dismal approval ratings, but ABC's George Stephanopoulos fails to comprehend it. Appearing on the October 13 "O'Reilly Factor," the former Clinton adviser peddled multiple theories to explain Obama's unpopularity, but neglected to consider the possibility that the president has simply failed to connect with the general public.
"As far as the problem with Democrats, they're upset about the economy, but he has also got a problem with liberals, who wish he would have done more on issues like gays in the military, on health care, on other issues," asserted Stephanopoulos.
The argument that Obama's approval rating is suffering because his policies have not been liberal enough shows just how disconnected this political flak-turned-journalist is with the public he ostensibly serves. Obama's approval rating is not hovering around 43 percent, as the latest Reuters poll indicates, because liberal activists, who represent a small percentage of the population, have been abandoning the president in droves. Rather, Obama is floundering because his support among independents and swing-voters has evaporated. In that same poll, according to Fox News host Bill O'Reilly, Obama has a 33 percent approval rating among Ohio voters.
A recurring theme from liberal media members as we approach the midterm elections is that Americans have to vote for Democrats in November so the nation doesn't go back to the way things were when Republicans ran everything.
A perfect example is New York Times columnist Paul Krugman who on Friday penned a piece called "Downhill With the G.O.P.":
Never mind the war on terror, the party's main concern seems to be the war on arithmetic. And this party has a better than even chance of retaking at least one house of Congress this November.
Banana republic, here we come.
In the midst of all this "Do you really want to go back to those days" talk is a staggering ignorance concerning how "those days" compare to now:
As if Huffington’s book does any such thing, Sawyer wondered: “What if we pulled together in one place all the innovative ideas for creating jobs?” The generous on-screen heading beneath Huffington’s picture: “Change Agent.” After highlighting Huffington’s wish to absolve troubled mortgage-holders of much of their responsibility, Sawyer trumpeted:
Arianna Huffington's new book is called Third World America, and on her Web site, she's been gathering innovative solutions to keep that Third World from happening.
The articles posted on the Huffington Post page with “innovative solutions,” a page the ABC segment displayed, sound more like the usual liberal carping: “Work Until You're Dead? That May Be the Only Option for Many Americans,” “Thousands Crowd Atlanta Area Housing Authority for Section 8 WAITING LIST, Fights Break Out,” “The 10 Highest-Paid CEOs Who Laid Off the Most Workers: Institute for Policy Studies” and “Income Inequality: ‘The Most Profound Change In American Society In Your Lifetime.’”
It seems “banks are doing nearly twice as many modifications under their own foreclosure prevention initiatives than under the Obama administration's signature Home Affordable Modification Program, known as HAMP,” Luhbi wrote in her Aug. 30 article. Banks made 644,000 “proprietary permanent modifications” in the first half of 2010, almost twice the 332,000 under HAMP.
Loan modifications are an alternative to foreclosures, in which the debtors usually receive “interest rate and principal reductions.” The HAMP program, according to Luhby, “lowers monthly payments to 31% of pre-tax income.”
July's bad news in new home sales is even worse than it first appears.
The seasonally adjusted annual rate of 276,000 units is bad enough. That is an all-time low since records have been kept and 12% lower than June's annual rate. It's also lower than what analysts predicted by about the same percentage. The lazy business press is running with those figures.
But, as has been the case so many other times, it takes a trip to the raw (i.e., not seasonally adjusted) data, this time at the Census Bureau (large PDF), to fully comprehend the extent of the new-home market's collapse during this big, fat failed "Recovery Summer."
The raw data shows that 25,000 new homes were sold in the U.S. in July. That's not a typo, and it really is the figure for the entire country. Worse, that figure, the lowest July since records have been kept, is down by over one-third from July of last year, when the economy supposedly bottomed out, and by 42% from July 2008. I don't think you'll see those facts reported today.
Here is a graphic cap of a 10:07 a.m. report at Reuters carried at CNBC.com. It contains a jaw-dropper of a quote from an economist (red box is obviously mine):
Here's how the Associated Press's Martin Crutsinger and Daniel Wagner reported the housing portion of their Tuesday report on the day's economic news ("Factories aid bumpy recovery, housing still weak"):
Single-family home construction, which represented nearly 80 percent of the market, fell 4.2 percent. And requests for building permits, considered a good sign of future activity, slid 3.1 percent.
... The July increase in housing construction pushed total activity to a seasonally adjusted annual rate of 546,000 units. Building activity in June was weaker than first reported. It fell 8.7 percent to an annual rate of 537,000 units, the slowest pace since October of last year.
"The bad news is that activity is likely to remain depressed for several years," said Paul Ashworth, senior U.S. economist at Capital Economics. "The good news, however, is that housing is so depressed it is hard to see activity falling much further from such a severely depressed level."
Well, okay, but the situation is already closer to a zero-out than it is to the levels we were seeing just a few years ago--or any time in the 50-plus years such records have been kept. Looking at the raw data on a historical basis, one finds that July 2010 was the worst July on record for the both stats the AP pair cited:
Ed Schultz on Thursday blamed Republicans for all the unemployed people living in America today.
As he began the most recent installment of the "Ed Show" on MSNBC, the host said, "The Republican Party has been on a crusade against the middle class and the poor for the last 30 years. We're now seeing the wreckage of that race to the bottom line culture."
He disgracefully continued, "Today a government report showed weekly jobless claims at a five-month high. 484,000 new unemployment claims were filed in the week ending August 7th. And you know what folks, you can lay this right at the feet, right at the altar of the Republican Party."
Sadly, he wasn't close to done, claiming, "The people you see flooding the streets begging for help, begging for an opportunity are victims of the Republican agenda just to make sure that President Obama fails" (video follows with transcript and commentary):
Earlier today, NB's Lachlan Markey covered Bill O'Reilly's interview with the Fox Business Channel's Charles Gasparino.
In that interview, Gasparino confirmed what the New York Post reported in April of last year, namely that "GE Execs Encouraged CNBC Staff to Go Easy on Obama."
The suits at GE, including Chairman Jeff Inmelt, had a clear motivation for encouraging their reporters to lighten up, namely that "General Electric at the time was hoping to profit handsomely from policies that would benefit a few companies, including GE, at the expense of the majority of the economy"-- specifically cap and trade.
But speaking of motivation: What about former CNBCer Gasparino's?
The easy answer would be that sometime in the past two years he has seen the light and realizes his past reporting at CNBC was lacking in fairness and balance. Despite his move to Fox, there's reason to doubt that.
There are quite a few shaky assertions in Alan Zibel's Associated Press report yesterday about Freddie Mac's latest quarterly loss ($6 billion), its latest bailout installment request to the U.S. Treasury ($1.8 billion), and the cumulative taxpayer bailout amounts that have been paid out to Freddie Mac and big sister Fannie Mae thus far ($148.2 billion) -- too many to cover in a blog post.
So I'll concentrate on the howlers present in just a single paragraph near the end, wherein the AP reporter attempts to explain why the two formerly government-sponsored mortgage giants that are now government-bailout enterprises ran into the ditch. The verbiage pretty much states the meme that the establishment press seems to want the public to swallow about what went down, and who's to blame:
During the housing boom, Fannie and Freddie faced political pressure to expand homeownership and competitive pressure from Wall Street to back ever-riskier loans. When the market went bust, defaults and foreclosures piled up, and the government had to take them over.
Initial requests for jobless benefits rose last week to their highest level since April, a sign that hiring remains weak and some companies are still cutting workers.
The Labor Department said Thursday that new claims for unemployment insurance rose by 19,000 to a seasonally adjusted 479,000. Analysts had expected a small drop. Claims have risen twice in the past three weeks.
Thanks to Shirley Sherrod, Andrew Breitbart, and the NAACP, political journalists have supposedly discovered the importance of "context" (though they strangely seem to lost interest once fuller context items like this and this became known). It would be helpful if such an interest in full context would legitimately and consistently spread to business reporting.
Full context would include looking at the raw business and economic data before it gets seasonally adjusted and reporting it when it is significant. Given the information the press would then have to report in the current economy, I'm not holding my breath waiting for journalists to even look at it, let alone report it. (Update: See this comment below for another important contextual element.)
Take the housing market, particularly housing starts and new single-family home sales. During the past week, the Census Bureau released statistics on each of these important metrics. Let's look at an excerpt from reports about each.