"Nightly News," however, based its report completely on a 78-year-old story who felt she was deceived.
"Reverse mortgages allow seniors 62 and older to borrow against the equity they've built up in their home," NBC correspondent Tom Costello said. "But upfront costs can be steep, $12,000 for Ms. Munoz. Then, her attorney claims, the sales agent who suggested the reverse mortgage sold the 78-year-old woman long-term investment annuities that don't mature until 2033. When she tried to withdraw some of that money, she faced a 20-percent penalty."
"As 2008 begins, house prices are still skidding, bank losses are still mounting, oil is again flirting with $100 a barrel and consumers are buying less as prices rise," the editorial said. "To many, the wheels appear to be coming off the economy. To others, including President Bush and his aides, the economy is fundamentally sound and resilient."
Well, the New York Times certainly can't be accused of excessive free market idolization. Peter Goodman breaks off from his gloomy economic assessments to cheer for regulation in Sunday's Week in Review story "The Free Market: A False Idol After All?"
In Goodman's telling, there is no question mark, stating the argument against the free market in simplistic liberal terms, right down to echoing the Reagan-era pejorative of "trickle down economics."
Since the stock and credit market turbulence began in July, NewsBusters has been informing readers that media continually predict recessions that never happen.
On the sad flipside, bearishness in the press can become so pervasive that an economic downturn ends up being an unfortunate self-fulfilling prophecy.
NewsBusters affiliate the Business and Media Institute made this very point in a late-November article by Amy Menefee entitled "Talking Ourselves Into Recession."
This concern is shared by business leaders like Craig Hester, CEO of Hester Capital Management, who during an interview with CNBC's Erin Burnett and James Cramer Friday spoke an inconvenient truth about media's impact on the economy that folks in the press sadly don't recognize as they disseminate pessimistic after pessimistic predictions often leading to people unnecessarily losing their jobs - or worse:
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.
Business & Media Institute Director Dan Gainor appeared on the Fox Business Network December 6 to discuss how the media is choosing sides in the subprime housing problem.
"All throughout this whole year and actually if you go back in the last year and before [the media] have been pointing out that the lenders are the bad guys...CBS News who actually did an okay report last night, then the example they use is someone who has a 6.6% adjustable rate adjusting up to 9.6%, they've got a house the size of a mansion and they've got horses."
Gainor said the important thing that journalists fail to do is to get both the lenders and the home buyer's viewpoints.
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.
Old Media reporters have worked themselves into such a lather trying to talk down the economy that you have to wonder if retailers got lulled into believing them.
The Associated Press's report on Black Friday sales by reporter Anne D'Innocenzio went through the normal good news/"yeah, but" routine (bolds are mine throughout).
First, the good news:
The nation's retailers had a robust start to the holiday shopping season, according to results announced Saturday by a national research group that tracks sales at retail outlets across the country.
According to ShopperTrak RCT Corp., which tracks sales at more than 50,000 retail outlets, total sales rose 8.3 percent to about $10.3 billion on Friday, the day after Thanksgiving, compared with $9.5 billion on the same day a year ago. ShopperTrak had expected an increase of no more than 4 percent to 5 percent.
But in bringing out the supposed "bad news," D'Innocenzio may have inadvertently exposed a retailer miscalculation:
Just in time for Thanksgiving, BMI Director Dan Gainor stopped by ‘Fox and Friends' to remind everyone that the economy is not as bad as people think, and that despite what the media said about your Thanksgiving dinner, it wasn't that bad.
"If you look at the inflation-adjusted number, it [Thanksgiving dinner] is actually 9 percent cheaper over the last 20 years," Gainor said.
*****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):
For years one of the great unanswered questions along Main and Wall streets has been why, in the midst of 24 consecutive quarters of uninterrupted growth, polls have regularly found Americans sour about the economy.
On Tuesday, a battle between the New York Times liberal economics columnist Paul Krugman and WOR radio's Steve Malzberg offered a clue.
In fact, after 16 minutes of sparring on subjects from healthcare to the Iraq war, a truly inconvenient truth became evident concerning the left's continued bearishness since the economy emerged from recession in the fourth quarter of 2001: too many folks listen to people like Krugman.
As a perfect illustration of just how separated this man, and anybody who reads him, are from reality, when Malzberg asked Krugman where he'd seek medical treatment if he was really ill, the Times columnist said (16 minute long audio link available here):
I receive the old-fashioned text version of MarketWatch's daily e-mail. That version of the e-mail always starts out with a short note from the editor about something that is being covered at the site that day.
Monday's e-mail from Steve Kerch, assistant managing editor/personal finance, was uncharacteristically enthusiastic about the economy. It was an enthusiasm that you'll see, after the jump, wasn't exactly reflected in his journalists' stories:
You have to wonder about all those doomsayers who predict the U.S. economy is on the brink of recession when you look at hotel rooms in New York that are filled at $600 a night, airplanes packed with passengers paying top dollar for flights to the Caribbean and Europe and highways jammed with cars guzzling $3-plus gallons of gas.
As far as travel goes this Thanksgiving holiday, the American consumer is in full rally mode. And it's not just the short jaunt to a family dinner on Thursday that's on the menu: More and more folks are making the Thanksgiving week a major vacation window, with international travel in particular seeing a big jump.
The Anchoress, a three-time Weblog Awards finalist and 2007 Catholic Blog Awards Winner (congratulations!) in the Best Political/Social Commentary category (scroll down at link to see it), delivered a cold but necessary shower earlier this evening to those of us who are tempted to exaggerate or overstate the impact New Media is having on most Americans.
I'll bet that a lot of us can relay similar stories to the ones she referred to in her very perceptive post ("Good news leaks past the embargo on good news…"; links that contradict the Old Media-driven beliefs described and bolds/italics were included in her original):
Unfortunately, it is still true that until a new president is installed in the WH, preferably one with a D after the name, only the downsides are newsworthy, and that holds true in every subject. Every subject. My elderly family members are convinced that everything, everywhere, is going to hell, and they are fretful and terrified. They think everyone is out of work, the economy is in a recession, the war in Iraq is lost and there are no real terrorist threats - that’s just made-up stuff. They’re sure America is dying. They are sure the world is headed for famine. They are depressed and do not want to send out Christmas cards, because how can you do that when so much is bad in the world?
It's hard to overstate the importance of the study released today by the Treasury Department ("Income Mobility in the U.S. from 1996 to 2005"; press release; full study PDF).
That's because it provides documented evidence of more, not less, economic mobility than in previous eras. Beyond that, taken in combination with an independent report I covered last week, it demonstrates beyond any reasonable doubt that the first four-plus years of the Bush economy were exceptional.
Tuesday's read-the-whole-thing feature editorial at OpinionJournal.com provides a great overview (bolds are mine), plus some tantalizing details:
With all due respect to the chairman (Fed Chairman Ben Bernanke), he would see the recession that so many others are feeling if he would only open his eyes. While Mr. Bernanke and others are waiting for the official diagnosis (a decline in the gross domestic product for two successive quarters), the disease is spreading and has been spreading for some time.
Someone needs to tell me why this news about discretionary income isn't as significant as I believe it is.
But first, three warnings: 1. I'm not about to spend the $250 needed to read the full report from the Conference Board that backs the story (their "about" page is here). 2. I don't feel totally comfortable with how the statistic is measured -- "Households with discretionary income, as defined by the study, are those whose spendable income exceeds that held by households with similar demographic features." 3. I don't feel totally comfortable that the statistic has been measured consistently.
Now with the disclaimers out of the way, here's the stunning news: More Americans have "money to burn," technically known as "discretionary income," than at any time in the past quarter-century, and perhaps in the country's history.
A lot more. A whole lot more.
So many more that I went as far back as I could for comparable stats.
What could be more timely than a study about debt? With all the networks crying about oil prices and threats to the economy, consumers are feeling squeezed. Director of the Business & Media Institute, Dan Gainor appeared on the Fox Business Channel today to talk about the Culture & Media Institute and Business & Media Institute joint study, "DEBT Who'$ responsible?" That found the broadcast networks blame businesses, not borrowers for spendthrift ways.
"When you look at how the networks cover [debt] what you find is they ignore personal responsibility and flip it around and blame business for debt. Six times more they blame business than borrowers and almost two-thirds of the time they ignore the whole concept of personal responsibility," Gainor told viewers.
NewsBusters has been reporting for the last several years that in the midst of the media's fascination with global warming alarmism, the financial ramifications of proposed solutions to this potentially nonexistent problem have been almost universally ignored.
In reality, you couldn't completely tell just how controversial this piece was from the opening paragraph, but it ended up being a clever -- albeit delicate -- foreshadowing of seriously inconvenient truths that folks like Nobel Laureate Al Gore and his media sycophants have been immorally withholding from the public (emphasis added throughout):
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.
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.
The lesson from this post isn't bias as much as it is making sure not to get taken in by Old Media overreactions.
Jim Cramer of CNBC's "Mad Money" went mad on Friday, declaring Armageddon in this video rant on Friday (watch the whole thing to see just how out-of-control he was; his declaration is at 1:40 in the vid -- "in the fixed-income markets, we have Armageddon.").
The first trading day after Cramer's declaration of Aramageddon went thusly (from a CNN e-mail after the markets' 4PM close):
Consumer confidence hit a six-year high in July, a widely watched gauge of sentiment showed on Tuesday, as Americans shrugged off falling home prices to focus on a healthy jobs market, instead.
The New York-based Conference Board said that its Consumer Confidence Index, rebounded to 112.6, its highest level since August 2001 when it recorded a 114.0 reading. That compared to a revised 105.3 in June. The July 24 cutoff for the preliminary survey of 5,000 U.S. households was before last week's stock market tumble, however.
It has to. A six-year high is bad enough; we surely can't afford to let the index get to an 8-year high, or someone might get the mistaken idea that the current economy is as good as or (heaven forbid) even better than the Golden Age of the 1990s (even though by a couple of respected measures it is).
Nets Barely Notice Surge in GDP as They Focus on Dow Plunge
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.
Not even reporting what second quarter GDP growth actually was (repeat: 3.4%) is flat-out negligence.
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."
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.
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.)