As Congress takes new aim at speculators for the high price of gasoline, some media reports seem to be following suit. But as The Biz Flog explains this week, there is considerable debate over whether speculators should be blamed for the high cost of oil.
June 23, the same day Democrats on the House Energy and Commerce Committee condemned oil speculators, the "CBS Evening News" and ABC's "World News" blamed oil speculation for a large chunk of the spike in prices.
"There's no doubt speculation plays a role in the skyrocketing price, but how much?" ABC correspondent Ryan Owens said June 23. "Experts say if it were just simple supply and demand a barrel would cost $75. Today it closed north of $135."
Scott Horsley explained oil speculation on June 29 for National Public Radio's "All Things Considered," where he pointed out that there have always been financial players in the oil market and there is still a debate over what influence they really have.
A proposal in California to require emissions-rating stickers on new cars is another example of "government overreach," according to Business & Media Institute Vice President Dan Gainor.
Gainor told "America's Election HQ" host E.D. Hill on Fox News Channel July 7 that California's decision could affect other parts of the country because of its influence on environmental policies.
"California already affects the nation," he said. "At least 12 states copy their environmental regulations. California has the highest [gas] taxes at 75 cents a gallon and the second-highest overall cost of gas," Gainor noted.
Once again, it appears media and Democrats are on the wrong side of public opinion, as a new poll released Tuesday shows Americans more interested in expanding oil drilling to solve the current energy crisis than additional conservation measures.
In fact, "[a]n increasing proportion also says that developing new sources of energy - rather than protecting the environment - is the more important national priority."
I kid you not.
Grab some popcorn, supply-siders, for this survey by the Pew Research Center is guaranteed to put a smile on your face (emphasis added throughout, chart above courtesy Pew):
Today's Web poll on Time.com asks "Should gas and heating oil be rationed until prices come down?"
It's a non-scientific Web poll of course, so in some sense it's just mindless, fluffy filler. But on the other hand, including this only serves to further the MSM's fear-mongering about the economy while banging its left-wing drum beat about oil and gas prices.
Since taking that second screencap earlier today, more votes have been cast by readers, with the numbers shifting slightly in favor of gas rationing to 39 percent of respondents.
Yesterday's edition of CNN's Lou Dobbs Tonight included a report from Kitty Pilgrim on product recalls from China and the administration's efforts to reduce importation of unsafe products. "Bush administration officials are going through the charade of tougher enforcement with few results," according to correspondent Pilgrim. Using the term "charade" prepared viewers for where this segment was going:
KITTY PILGRIM, reporter: HHS Secretary Leavitt says he is optimistic the Chinese government will approve the opening of three FDA offices in China some time soon. The Consumer Product Safety Commission says if recalls continue at the current rate, it will be a 70 percent increase over last year. Lou?
According to the American Fire Safety Council (AFSC), flame-retardant chemicals save a lot of lives. But you would never know that from watching the May 19 "CBS Evening News" because correspondent Wyatt Andrews hyped the danger of such chemicals.
Andrews report featured a liberal politician who wants to ban the chemicals in Maine, and has made it one of her pet causes.
"You know, it makes me angry that I could have a child in the next couple years who would be impacted by these chemicals in my body," Democratic Maine State Rep. Hannah Pingree said on CBS May 19. Pingree is also the House majority leader in the Maine legislature according to "Evening News."
In a rare case of balance, Wednesday’s CBS "Early Show" highlighted both sides in the debate over declaring the polar bear an endangered species due to global warming as correspondent Daniel Sieberg declared: "They're at the top of the food chain at the top of the world, but their future is at the center of a political tug-of-war over drilling for oil versus protecting their habitat."
Sieberg began his report with a dire prediction: "There are an estimated 20,000 - 25,000 polar bears in the Arctic region, but environmentalists warn that rising temperatures and disappearing sea ice will cause a 30 percent decline in their population over the next 50 years." He also played clips of liberal California Senator Barbara Boxer and John Kostyack from the National Wildlife Federation.
However, Sieberg also provided perspective from the Heritage Foundation:
"Of course, real life never matches up exactly with the theory's assumptions. But they represent, economists say, a useful way of making sense of a complex world," Lynch wrote.
"To Soros, the conventional approach is rubbish. Instead of a world of near-identical actors, coolly assessing their economic interests and acting with clear-eyed precision, he sees a world (and markets) governed by passion, bias and self-reinforcing errors," Lynch wrote. "Because fallible human beings are both involved in, and trying to make sense of, this world, they inevitably make mistakes. Those mistakes then feed on themselves in ‘reflexive' ways that, when taken to extremes, result in situations such as the now-deflating U.S. housing bubble."
What part of "free" in "free-market" does the Associated Press not understand?
The news wire's Glen Johnson is reporting today that Sen. John McCain (R-Ariz.) plans on unveiling a plan to combat global climate change "while adhering to free-market principles."
McCain's major solution is to implement a cap-and-trade program on carbon-fuel emissions, like a similar program in the Clean Air Act that was used to reduce sulfur dioxide emissions that triggered acid rain.
Industries would be given emission targets, and those coming in under their limit could sell their surplus polluting capacity to companies unable to meet their target.
A cap-and-trade programs would certainly be a market, but it would be an artificial one imposed on manufacturers by government fiat. The key word in free-market being of course, free.
It would be correct to call a voluntary cap-and-trade program created by industry groups outside the pressure of government regulation a "free-market" solution, but the component of force by government here only puts an Adam Smith happy face on a Karl Marx mandate.
How do you get a better air safety record? Try not crashing first.
The New York Times reported that outside the United States the Federal Aviation Administration is considered a "role model" and "first-rate regulator," because it has the lowest accident rate in the world. The Times' viewed regulation rather than market based innovation as the solution to accident rates in foreign countries.
In Latin America, "accidents number one for every 600,000 flights" and "Africa is the least safe region in the world for air travel, with one accident for every 244,000 flights," said the Times.
One source, Giovanni Bisignani, secretary general of the International Air Transport Association, lamented the "the lack of a common regulatory framework" and failure to live up to standards set by the International Civil Aviation Organization, a United Nations specialized agency.
But the success of accident records in the United States doesn't lie solely in regulation. Safety looks good to consumers too.
Hillary Clinton's tax policy on gas and oil is "pointless" while John McCain's is "evil," according to New York Times columnist Paul Krugman. But in explaining the difference, Krugman betrays either his ignorance of the flawed history of the so-called "windfall profits tax" on petroleum or his tacit approval of the tax despite its folly as public policy.
Anyway, John McCain has a really bad idea on gasoline, Hillary Clinton is emulating him (but with a twist that makes her plan pointless rather than evil), and Barack Obama, to his credit, says no. [...] The Clinton twist is that she proposes paying for the revenue loss with an excess profits tax on oil companies. In one pocket, out the other. So it’s pointless, not evil. But it is pointless, and disappointing.
Far from being pointless, a windfall profits tax produces negative effects on consumers and investors, as well as the health of the energy industry, say many economists, including former Bill Clinton economic advisor Robert J. Shapiro who focused his fire on the policy's damage to retirees' investments (see PDF of study here).
Washington Post reporters Alec MacGillis and Steven Mufson found another liberal economist with nothing positive to say for a windfall profits tax in their May 1 front-page article (emphasis mine):
On Monday’s CBS "Evening News" anchor Katie Couric hyped a new potential scandal for the Bush administration as she declared: "Meanwhile, on Capitol Hill, a report due out tomorrow raises some serious questions about one of the most influential government agencies, the Environmental Protection Agency...It even suggests political pressure may be putting the health of Americans at risk."
Correspondent Chip Reid followed up by explaining that the new report "...also points a big finger of blame at the White House, and in particular the Budget Office at the White House, saying that they're interfering in this process." Reid went on: " The bottom line, they say, is that the administration is dragging its feet on review of toxic chemicals to the point that the health of millions of Americans could be in danger."
Reid highlighted White House critics, like liberal Sen. Barbara Boxer (D-Calif.), and an anonymous EPA scientist during the segment:
REID: A new government report by the investigative arm of Congress concludes that the process for analyzing health effects of toxic chemicals "is at serious risk of becoming obsolete" because of endless delays and secrecy. Behind it all, critics say, is the White House.
If you didn't know any better, you might think ABC correspondent Lisa Stark has a personal vendetta against airline mergers.
For the second consecutive night, Stark gave viewers every reason to oppose a merger between Delta Air Lines (NYSE:DAL) and Northwest Airlines (NYSE:NWA) on the April 15 "World News with Charles Gibson." This time it came in the form of opposition on Capitol Hill.
"But there was swift opposition," ABC correspondent Lisa Stark said. "A powerful lawmaker from Minnesota, where Northwest is based, called it one of the worst developments in aviation history."
Operating under the assumption that what's good for business is bad for consumers forces the media to give Americans a narrow view of the world.
All three network newscasts on April 14 reported the Delta Air Lines (NYSE:DAL) and Northwest Airlines (NYSE:NWA) as if it were a conspiracy to bilk air travelers out of more money.
"It's an unsettled time in the skies - planes grounded, flights cancelled, spiraling ticket prices," ABC correspondent Lisa Stark said on the April 14 "World News with Charles Gibson." "And now, things could get even more complicated. Delta operates 1,500 flights a day with hubs in Atlanta, Cincinnati, New York and Salt Lake City. Northwest - some 1,200 flights a day with hubs in Detroit, Minneapolis and Memphis. Put the two together, and passengers could take a hit."
Never mind nightly TV newscasts are geared toward older generation. Never mind scandals like Dan Rather and the falsified National Guard documents leading up to the 2004 presidential elections have caused people to look for their news from other sources like the Internet and talk radio.
"[B]ut there were so few [good TV news writers] because we became dependent on pictures and that coupled with deregulation of television, when you had three, four networks - and suddenly, there are 20, then there are 50 and now there are 300 and however many - 500," he said. "And as a consequence, the pie that used to be sliced three or four ways is now slivers and as a consequence, everybody is trying to hold on to their little audience and to do that, you got to entertain."
The average American will receive a $2,500 tax refund this year, a statistic that left CBS “The Early Show” host Harry Smith “stunned” on the April 11 broadcast.
“I am stunned to know what the average refund is,” Smith said. “$2,200 [in 2007], that’s too much, right?”
“It is too much,” said Money magazine senior writer Janice Revell.
She explained that the checks actually represent an interest-free loan between the government and taxpayers.
“When you get your refund it feels like this big windfall, you’ve won the lottery, but in essence what you’ve done is you’ve loaned your money, interest-free, to Uncle Sam for the year,” Revell said. “It just makes no sense.”
Panicky protectionists are predicting some unsavory possibilities for the U.S. economy thanks to emerging foreign economies with newly created wealth to invest.
Although they're unlikely possibilities, CBS's April 6 "60 Minutes" delved into the potential threat one Chinese sovereign wealth fund might pose to the American economy.
"All together, the sovereign wealth funds of countries like Abu Dhabi and Kuwait have spent over $30 billion bailing out our financial system, which has raised some troubling questions," CBS correspondent Lesley Stahl said. "Are these mostly undemocratic regimes saving Wall Street or invading it? One fund is of special concern - it's new, highly secretive and the fifth largest in the world."
Business & Media Institute Vice President Dan Gainor told the Fox Business Network on April 4 that the government might be intervening too much in the financial markets to address credit problems, and he criticized the media for failing to cover both sides fairly.
"The networks are not portraying at all the other point which is: maybe we're using too much government intervention. Maybe we're using too much regulation," Gainor said. "Instead they're using the worst-case scenario reporting" to support government intervention.
CNN's senior business correspondent Ali Velshi let viewers in on an underreported fact about rising commodities prices: the government mandate for ethanol production is making corn and other agricultural products more expensive-making inflation a top priority for Americans.
"Several years ago, we made some decisions about how corn is going to be used to make ethanol, which is added to our gasoline," said Velshi on "American Morning" April 4. "A number of people think that that was meant to reduce our dependency on crude oil. What is does is it takes what is fundamentally a food source and makes it into a gasoline source. That's caused corn to go up."
As economic issues move to the front of the on-going presidential campaign, the mainstream media have given an increased amount of coverage to what is happening on Wall Street. However, they have portrayed Wall Street as something completely alien to what happens on "Main Street."
"Now to Wall Street, which, as you know, doesn't always like what Main Street likes, and by the end of the trading day, it was up," NBC "Nightly News" anchor Brian Williams said on Oct. 31, 2007.
But something positive on Wall Street and something positive for Main Street are not mutually exclusive.
When This Week assembled a round-table of four liberals versus one conservative yesterday, I kvetched. Maybe I should have cheered. ABC's idea of balance looks good compared to that of CBS. This morning's Early Show preview of the Bush admin's plan, to be announced later today, to regulate the financial industry was essentially conservative-free. OK, to be absolutely accurate, there was a brief clip of Treasury Secretary Paulson saying the plan would protect the Fed's balance sheet and US taxpayers.
But in her set-up piece, CBS's Kimberly Dozier emphasized the negative: "critics say it's win-win for banks, not the consumer. Less regulation, but no new legal limits to stop questionable lending practices or to stop the shell-game financial structures that led to the current mortgage debacle." The only expert she aired was University of Maryland economist Peter Morici who griped that under the plan: "[banks] can still engage in sharp practices that got them in trouble. There's no reason to believe that this regulatory format will keep the kind of crisis we just had from happening again. Nor will it get us out of this recession."
Co-anchor Maggie Rodriguez took the baton from there. She first interviewed Sen. Chris Dodd (D-CT), who claimed Congress had already given the Fed "massive" regulatory authority. Dodd predictably blamed the current situation on "a failure of leadership." Then it was on to Rodriguez's in-studio chat with CBS News biz correspondent Anthony Mason who--surprise!-- was also a critic of the plan.
After anecdotal reports that people who used the allergy drug Singulair may develop suicidal tendencies, the Food and Drug Administration announced March 27 that it would investigate. How big the problem might be depends on what network you watch.
Even though CBS's "The Early Show" and NBC's "Today" included statements from Merck (NYSE:MRK), the manufacturer of Singulair, analysis of the investigation was mixed.
With Eliot Spitzer gone, Chuck Schumer moves to the head of the list of smugly self-righteous New York pols. So it was particularly satisfying to see Sen. Jon Kyl [R-AZ] put Schumer is his place on This Week with George Stephanopoulos today.
A guest with Kyl for purposes of discussing the economy, Schumer clearly came in with a game plan: to analogize President Bush to the man who presided over the beginning of the Great Depression: Herbert Hoover. After Schumer tried it twice, Kyl had had enough and unleashed a riposte as devastating as it was reasoned.
After Environmental Protection Agency Chief Stephen Johnson's appearance before Democratic Speaker of the House Nancy Pelosi's powerless House Select Committee on Energy Independence and Global Warming, CBS decided to dole out its own criticism of the EPA.
"Congressional Democrats took the gloves off against the EPA today, accusing the agency's chief, Stephen Johnson, of stalling all regulation on global warming," CBS correspondent Wyatt Andrews said. "Johnson knew this reckoning was coming. Despite his own promise to issue new regulations last year, despite a Supreme Court order 11 months ago for the EPA to act on greenhouse gases, and despite the president's own order last May."
Of course, 44 Southern Baptists who buy into the green agenda received a respectful print story in the March 10 Times, widely quoting the church leaders saying things like: "when we destroy God's creation, it's similar to ripping pages from the Bible."
On Wednesday's The Situation Room, CNN's Jack Cafferty suggested that blame for high oil prices rests not only with Bush administration policies, but also with its "relationship with the oil companies." During a discussion of John McCain and President Bush's recent meeting, Cafferty, who once pushed the liberal conspiracy theory that Big Oil deliberately lowered gas prices before the 2006 elections to help Republicans get elected, once again demonstrated his lack of understanding of the world oil market as he suggested that a "relationship" with oil companies could impact world oil prices: "Oil was $28 a barrel when George Bush was sworn in. It's $104 right now and could go to $120 soon. Now, why do you suppose that is? It wouldn't have to do with the policies of the Bush administration or the relationship they have with the oil companies, would it? Come on." (Transcript follows)
During a story suggesting that Angelo Mozilo, the former CEO of the mortgage company Countrywide, is unworthy of his millions of dollars and perhaps enjoys too much time lying in the sun, ABC's Dan Harris, possibly not picking up on the former CEO's Italian ethnicity which could be the source of his skin's dark complexion, remarked that Mozilo's "deeply tanned face" could become the "face of the mortgage mess." The story ran on Friday's World News with Charles Gibson, substitute hosted by George Stephanopoulos, with Harris beginning his report: "This may well become the deeply tanned face of the mortgage mess. The face belongs to Angelo Mozilo, the once-celebrated CEO of Countrywide, now facing allegations of predatory lending and rapacious greed." Harris also ended the report seeming to lament that Mozilo is not facing foreclosure on any of his homes: "If the sale [of Countrywide] goes through, Mozilo will walk away with about $40 million. And with not one of his homes in foreclosure." (Transcript follows)
"Blame it on the price of wheat," said ABC correspondent Sharon Alfonsi. "Demand for alternative energy has farmers planting less wheat and more corn - the key ingredient of ethanol. Add the growing appetite for wheat from developing countries and the supply is strained.