Wages & Prices

Being an outspoken conservative in the media has proven dicey lately, as the Democrat-controlled Congress and White House are working toward seeing an $819 billion stimulus bill signed into law.

According to Ann Coulter, there has been a double standard applied to those outspoken conservatives. Coulter appeared on the Fox News Channel's "America's Newsroom" on Jan. 30 to promote her new book, "Guilty: Liberal ‘Victims' and Their Assault on America" currently second on The New York Times Bestseller's list in only its second week.

"I think it's just another reminder of how the left hates free speech," Coulter said. "It really is strange how they go after speakers like this. I mean, there is no campaign by conservatives to shutdown Keith Olbermann. In fact, I wish more Americans would listen to him - to see the face of the left, the only 57-year-old woman trapped in a man's body to host his own TV show."

You've heard it here, there and everywhere in the news media - the time is now for a big-government economic stimulus package, not only to revive the economy, but to salvage America's crumbling infrastructure.

That's one of the selling points used over and over again by pundits, as they are paraded out repeatedly on broadcast and cable network news programs - that so-called "shovel-ready" projects will challenge economic woes by revitalizing something we need to do anyway. But only 3 percent of the Obama stimulus plan is slated for such projects.

"The total size of the plan is about $750 to $800 billion - roughly $300 billion is for tax cuts for businesses and individuals," CBS correspondent Chip Reid said on CBS's Jan. 12 "The Early Show." "The rest will be spent on everything from roads and bridges to renewable energy to create three to 4 million jobs. Republicans are raising red flags about the amount of spending."

Here are the key numbers (in red) in Uncle Sam's November Personal Income and Outlays report (the July :

Common sense says that the chart's results after adjusting for inflation are more important (identified as "Chained [2000] dollars") than those in current dollars. Consmers' disposable income went up 1.0% in real (after-inflation) terms in November after a 0.7% increase in October.

It took a month for real consumer spending ("Personal consumption expenditures") to catch up to the increased disposable income, but it did so in a big way in November. The 0.6% real increase is the highest in over three years. Both improvements are objectively good news, and are largely due to sharply declining gas prices.

This is pretty fundamental Econ 101 stuff, isn't it? As you can see from the headlines and the treatment of the real spending increase that follow, the business press mostly flunked, and badly:

Sure, its revenues might be plunging along with its share price, but the New York Times is still good for something.  In these somber days of winter, the Gray Lady, her name notwithstanding, can still inject the sunshine of humor—albeit of the unintentional variety.

Take its current editorial, Getting Immigration Right -- please. With jobs at a premium and the collapse of the Big Three automakers attributable in no small part to the role of the unions, the Times naturally comes out in favor of:

• making it easier for illegals to get into the country to compete for what jobs are left, and
• granting the right of illegals once here to . . . unionize.

It's special treatment for automakers, according to a former airline executive.

Gordon Bethune, the former CEO of Continental Airlines (NYSE:CAL), now a CNBC contributor, told CNBC's "Squawk Box" on Dec. 19 the political process is being substituted for what otherwise should be a bankruptcy judge in determining the fate of the big three automakers.

"Wow, what makes them exempt from reality? What are the bankruptcy laws invented for?" Bethune asked. "I mean - if it works in airlines, works in steel - what's the matter with these guys? Why not have a judge decide instead of the political process? And, you know - you get some fairness in the federal court, so there's no excuse for this whole debacle I don't think."

Bethune is famous for saving a beleaguered Continental Airlines from near liquidation after it had filed for bankruptcy several times, giving him a different perspective on how to turnaround a failing corporation.

Just how bad is the economy? ABC's "World News with Charles Gibson" went all the way to Edwardsburg, Mich. to find out. 

The Dec. 18 broadcast of "World News" highlighted a new economic indicator - the increase in the number of people willing to lend their body to science for money.

"We're going to turn next to some of the extreme measures that some Americans are taking because of the faltering economy," Gibson said. "According to an ABC News Poll, more than one in four people say someone in their household has been fired, faced a cut in pay or a reduction in work hours. Facing mounting debts and dwindling finances, some people are deciding to put their bodies at risk."

Beats waiting in a soup line, no?

No, it's a not a story from the Onion. It's AFP reporting on the actions of Associated Press photographers and journalists:

US news agency staff stage 'byline strike'

Journalists and photographers at the US news agency the Associated Press (AP) are withholding their bylines to protest management's stance in contract talks, their union said.

"Staffers recognize the tough times, but they also understand that quality journalism at AP means attracting and retaining the best employees," Tony Winton, president of the News Media Guild, said in a statement on Tuesday.

The Guild said AP reporters and photographers were withholding bylines and personal equipment "in protest over the news agency's proposals that would threaten job security, dramatically raise medical costs, and freeze wages." 

Yeah, that'll show em.

The proposed automaker bailout has a big stamp on it that says "union-built," but the news media hasn't noticed.

Over the past month, accusations have been flying against several Southern senators who oppose a $14 billion bailout for the beleaguered big three automakers and support the the alternative of Chapter 11 bankruptcy. These senators, critics say, are representing the interests of foreign automakers that donate heavily to their campaigns. But what has been largely ignored is the other side of the equation - the influence of the United Auto Workers (UAW) on the members of Congress that voted for the bailout. 

According to campaign finance data from the Center for Responsive Politics Web site OpenSecrets.org, when broken down by how members of Congress voted, for the 2008 election cycle the UAW gave more than eight times as much in campaign cash to members that voted for the bailout than those that voted against it -- $1.14 million to proponents versus just $136,500 that voted against it.

To the extent the MSM has been willing to report on the disadvantage under which the Big Three automakers operate compared to their non-union competitors, the focus has been on the huge wage differential.

On this evening's Fox News Watch, conservative columnist Jim Pinkerton highlighted another issue which has gone largely unreported in the liberal media: the onerous union work rules that add literally thousands of positions to the job rolls compared to those of the foreign transplants.

View video here.

Though there's not a ruble's worth of difference between their politics, I normally find Rachel Maddow a kinder, gentler, smarter version of Keith Olbermann.  Not tonight.  Granted, the Countdown host was on hiatus.  But even if Olby had been around, he would have been hard-pressed to outdo Maddow for sheer silliness.

The preposterous proposition Rachel propounded?  Republicans just don't want Americans to make good wages. That's how Maddow in part explained the decision of Senate Republicans to oppose the Big Three bailout.

View video here.

Let's hope we haven't seen the last of economist Peter Morici on CBS.  The University of Maryland business professor, appearing on the Early Show this morning, put the blame for the failure of Big Three bailout squarely on the shoulders of the UAW for its refusal to accept pay cuts putting its members on par with non-union workers at US plants owned by foreign car manufacturers.  The Early Show did manage to balance things with some Dem demagoguery from the mayor of a Michigan city.

Morici singled out UAW president Ron Gettelfinger, calling him "unrealistic" and "selfish." Comic relief was later provided by Virg Bernero, mayor of Lansing, Michigan, who seemed to confuse South Carolina with South Korea.

The failure of American media to properly vet the political beliefs of Barack Obama during the just concluded presidential campaign was on full display Sunday when the president-elect made clear just how much of a socialist he really is, and did so with nary a challenge from "Meet the Press" moderator Tom Brokaw.

Makes you wonder what the results might have been on November 4 if the press had done its job in exposing Obama's radical economic beliefs rather than attacking Joe the Plumber for suggesting he had them, and how much differently his appearance on "Meet the Press" would have gone Sunday if the moderator wasn't completely on board with these left-leaning philosophies.

Such is important when considering Obama's comments previously reported by NewsBusters here and here as well as a truly telling statement by the president-elect that working for your own financial benefit is "not good for anybody" (video available here):

Only a professor, preferably a sociology professor, one with way too much time on his hands, could have come up with this one.  His solution to the Detroit crisis that has the Big Three automakers on the brink of bye-bye?  Unionize their foreign competitors manufacturing in the USA!

Now why didn't we think of that?  Because we're not Jonathan Cutler, associate professor of sociology at Wesleyan University.  His notion in a nutshell, contained in his Los Angeles Times column of today [emphasis added]:

[N]ot to tear down the historic and heroic gains won by prior generations of UAW workers. If there is hope long term -- for the unionized Big Three companies and for the UAW -- it rests in dealing with the unfinished business of the 1980s: unionizing the unorganized transplants.

Let's count the ways that won't work:

When Federal Reserve Chairman Ben Bernanke speaks, Wall Street listens - and investors should beware. The Dow Jones Industrial Average (DJIA) has lost over 2,500 points on days he has spoken, including three of the worst point losses ever.

Today's drop in the Dow of 215 points is the 14th time out of the last 20 times the Dow has lost ground on a Bernanke has spoken over the past six months. Bernanke gave a speech at the Federal Reserve System Conference on Housing and Mortgage Markets in Washington today, where he continued to hammer the message the economy is in bad shape.

"The U.S. financial system has been in turmoil during the past 16 months," Bernanke said. "Credit conditions have tightened and asset values have declined, contributing substantially, in turn, to the weakening of economic activity."

Barney Frank favors bailing out the Detroit automakers over letting them go into bankruptcy.  Chief among his concerns is that bankruptcy might "bust" the unions. You know, those organizations whose contract demands have put Detroit on the brink of extinction.

The Massachusetts Dem, chairman of the House Financial Services Committee, was interviewed by Maggie Rodriguez on today's Early Show. He appeared alongside Sen. Richard Shelby (R-Al.), ranking Republican on the Senate Banking Committee, who favors letting the automakers reorganize under Chapter 11.

Can I have permission to utter the S-word ("socialism")?

Ken Thomas's Associated Press report today (link is dynamic, subject to change, and will probably be gone in a week) on auto industry bailout ideas emanating from Washington includes these items, all of which expand soc- ... soc- ... socialism:

• Legislation proposed by Barney Frank involves the government taking ownership stakes in the companies.
• Lawmakers want to use funds that were meant only for the financial sector bailout.
• A note that the current bailout is over and above the $25 billion in government-guaranteed loans that has already been approved for "development of fuel-efficient vehicles."
• News that auto industry suppliers want in on the bailout action
• The United Auto Workers wants a separate $25 billion "to help cover future health care obligations for retirees and their dependents."

Are we having fun yet?

Here are key paragraphs from the AP story:

Wednesday evening's dour Associated Press report by Tom Krisher and Ken Thomas on the proposed bailouts of General Motors, Ford, and Chrysler acted as if their fates will determine the viability of the entire US auto industry, and waited until the 15th paragraph to name the primary reason why the companies are where they are financially. Beyond that, the AP report did not mention that United Auto Workers has flatly ruled out union contract concessions.

Here is how the AP's report began, followed by selected other paragraphs, including the one (of over 30) that mentioned labor costs (bolds after headline are mine):

For years, and certainly throughout this campaign, the media contention has been that only the rich have done well since Bush was elected, and that his economic policies did nothing for lower and middle income wage earners.

Yet, a comparison of the 2008 and 2004 exit polls tells quite a different story about what voters made in those years.

In fact, the percentage of poor voters showed a huge decrease since 2004, while the percentage of folks making over $200,000 doubled.

Yes, doubled.

Here are the particulars:

The Oct. 26 New York Times took on Sen. Barack Obama's elusive health insurance mandate for employers -- the "play-or-pay" rule that would force businesses to pay a new tax if they didn't contribute a "meaningful" amount toward their workers' insurance. In the debates, Sen. John McCain asked more than once how much businesses would be fined, and Obama declined to say.

Now we know why. Just 'cuz.

“We made a decision even before the plan was rolled out not to decide,” David M. Cutler, a Harvard economist who speaks for the campaign on health care, told the Times. “It’s not that there’s a decision out there that we’re not telling. It’s literally that we’ve decided not to decide.”

Prices shouldn't be set by supply and demand.  They should be determined by, well, what prices "should" be.  That's the innovative theory Maggie Rodriguez propounded on today's Early Show.

The Early Show anchor's unique take on economics came in the course of a segment on the falling price of gasoline.  Rodriguez lamented to co-anchor Chris Wragge that grocery prices weren't falling along with gas prices.  In Maggie's view, grocers who set prices based on demand rather than on what prices "should" be are the culprits.

Who you gonna call to fix the economy? Kids.

The Dow dropped 5,585 points since its high a year ago, banks have been afraid to lend and the government bought billions in toxic mortgage-backed securities. So CBS's "The Early Show" went to some top finance experts to explain what was happening to viewers, right? Nope, they went to kids, Oct. 10.

Weatherman Dave Price talked to fifth graders in Arlington, Va., about the credit crisis, exclaiming, "You wouldn't believe how much they know, sometimes we ought to listen to them and their solutions."

"What one thing does your mom waste money on?" Price asked one student.

"Mmm, smokes, I guess," a fifth grade girl from Glebe Elementary School replied.

Labor costs the Detroit Three substantially more per vehicle than it does the Japanese. Health care is the biggest chunk. GM, for instance spends $1,635 per vehicle on health care for active and retired workers in the U.S. Toyota pays nothing for retired workers - it has very few - and only $215 for active ones . . . Contract issues like work rules, line relief and holiday pay amount to $630 per vehicle - costs that the Japanese don't have. And paying UAW members for not working when plants are shut costs another $350 per vehicle. -- Fortune magazine, January 26, 2007

Obama and Biden will strengthen the ability of workers to organize unions. He will fight for passage of the Employee Free Choice Act. Obama and Biden will ensure that his labor appointees support workers' rights and will work to ban the permanent replacement of striking workers. -- Official Obama website statement on labor [emphasis added].

You would think what donors are cozy with which campaigns - especially in the midst of a presidential election cycle - might be a relevant story for the media,  especially at a time when everyone is quick to point fingers at which political party is to blame for financial turmoil.

When Lehman Brothers CEO Richard Fuld testified before the House Oversight Committee Oct. 6, the media criticized his wealth and spending amidst financial turmoil in his company and on Wall Street. But conspicuously missing was the story of Fuld's political contributions.

"Here's another sad sign of our economic times: Never before has the U.S. Postal Service laid off workers. Now, it's a real possibility," lamented Joe Davidson in the October 3 "Federal Diary" feature for the Washington Post.

But isn't that part of the problem with government in the first place? Rather than trimming expenses and payroll during tough economic times, the federal bureaucracy stubbornly insist on being immune to market forces that affect the private sector.

Davidson quoted American Postal Workers Union President William Burris that "for the first time in postal history, the losses cannot be recovered by postage rate increases."

Wow. Cry me a river. Davidson fails to explain that one major reason the federal tax-exempt USPS has been able to rate-hike its way out of trouble before is that, by federal law, it has a monopoly on the delivery of first class mail.

Private CEOs? Yes. Government-sponsored CEOs? No.

In a September 19 "Good Morning America" preview of a report scheduled to appear on the same day's edition of ABC's "20/20," chief investigative reporter Brian Ross took a few jabs at the rich who had fallen.

Ross called it "the end of a shameful chapter of American history," and although top executives on Wall Street had been hit hard in a way "they never thought was possible ... it's hardly the soup kitchen."

There was also much indignation in the report over the assets of Richard S. Fuld Jr., chairman and chief executive officer of now fallen Lehman Brothers Inc., and Alan Schwartz, the CEO of now "busted" Bear Stearns.

On a day when markets are in turmoil, you might think that the role of an American president, current or aspiring, would be to assure his fellow citizens—and the world—that our economy is fundamentally strong. 

That's what John McCain did.  In contrast, Barack Obama suggested that the American economy is fundamentally weak.  WaPo's Jonathan Capehart has declared Obama the winner of the exchange, for doing a better job in channeling the country's anxiety.

Click on image for video of McCain and Obama addressing the state of the economy on the stump today, and Capehart's commentary.

When an anti-business media personality makes a business magazine's "Most Powerful" list, there is definitely something wrong.

Forbes magazine released its list of the 100 most powerful women in its September 15 issue. Meredith Vieira, host of NBC's "Today," came in at number 61 as the top journalist. Vieira beat CBS "Evening News" anchor Katie Couric (ranked 62), ABC News veteran Barbara Walters (63), ABC "Good Morning America" co-host Diane Sawyer (65) and CNN chief international correspondent Christiane Amanpour (91).

Despite her $10-million annual salary, according to the April 13 Parade Magazine, Vieira has had difficulty reporting on business practices in a free market. The Forbes list didn't mention her anti-business bias.

Mercantilism [emphasis added]: An economic doctrine that flourished in Europe from the sixteenth to the eighteenth centuries. Mercantilists held that a nation's wealth consisted primarily in the amount of gold and silver in its treasury. Accordingly, mercantilist governments imposed extensive restrictions on their economies to ensure a surplus of exports over imports. In the eighteenth century, mercantilism was challenged by the doctrine of laissez-faire.

When Barack Obama talks—and talks—about the future, does he really mean "back to the future"?  You have to wonder after reading the column by one of his economic advisors in today's LA Times.  In  Renewing America's 'contract with the middle class, Leo Hindery Jr. explicitly calls for a return to mercantilism, the discredited theory of economics popular during the 17th and 18th centuries.  Hindery [emphasis added]:

It is imperative -- way past time, in fact -- for America to be as mercantilist as are our trading partners.

If you break the terms of a contract, you should be expected to pay a penalty, right? Not according to ABC's "Good Morning America."

"Good Morning America" criticized fees charged to customers who return rental cars without a full tank of gas - part of a standard car rental agreement.

"The only thing more expensive than gassing up your car these days is not gassing up your rental car," reporter Elisabeth Leamy explained to viewers on August 29. She said companies across the nation charge as much as $8 per gallon for cars returned unfilled.