This week marks the five-year anniversary since investment bank Lehman Brothers filed for bankruptcy, setting in motion the financial crisis and recession. In the years since Lehman Brothers' demise, right-wing media have repeatedly and consistently argued against government involvement and regulation in the economy.
Here's a look back at some of the worst attacks:
New research shows that the gap between the rich and poor in the United States in 2012 rose at the fastest rate since 1928. This revelation comes at a time when television and print media outlets largely underreport economic inequality.
According to research from economists at the University of California, Berkeley, the Paris School of Economics, and Oxford University, in 2012, incomes for those in the top 1 percent of earners rose by roughly 20 percent. According to the Associated Press, the share of income captured by the wealthiest was the highest since 1928, a year before the onset of the Great Depression .
The remaining 99 percent of earners, meanwhile, saw a 1 percent increase in income.
The research findings reinforce previous warnings from economists that rising income inequality poses a threat to economic well-being.
While economists have repeatedly shown that income inequality is a real, systemic issue in the American economy, media outlets have largely shirked their duty in reporting the problem over recent months.
A recent Media Matters report on economic inequality coverage in local print outlets found that, of articles with substantial mentions of policies and programs that affect low-income individuals, only 19 percent mentioned structural inequality and poverty.
The lack of coverage of inequality in local print media follows a similar pattern shown in nightly cable and broadcast news. Over the second quarter of 2013, only 9.3 percent of news segments on the economy mentioned inequality and the impact of current policies on low-income households
With news that economic inequality is reaching historical highs, media have a responsibility to bring this to light.
Over the past three months, major print outlets throughout the country largely failed to discuss rising structural inequality and poverty in the United States while reporting on policies and programs that affect low-income groups.
Right-wing media figures are again poised to forward the fallacious notion that household budgets are analogous to the federal budget, an idea in direct opposition to expert opinion.
In an August 26 letter to congressional leaders, Treasury Secretary Jack Lew indicated that the debt limit would be reached in mid-October. If Congress fails to act and raise the debt limit, the United States will be unable to pay for previously agreed-upon obligations, such as Social Security and Medicare payments.
Previous battles over the debt ceiling and budget negotiations have proven problematic for those in right-wing media. Proponents of exacting spending cuts from Congress frequently compare the federal budget to a typical household budget, ostensibly suggesting that since a household cannot operate with debt, neither can the government.
The upcoming debt limit debate has already prompted right-wing media to forward this deceptive analogy. Previewing Congress' need to raise the debt limit, Fox News host Martha MacCallum likened federal debt to that of a daughter running up a credit card bill.
Of course, numerous economists -- such as Nobel Prize winner Paul Krugman, former Labor Secretary Robert Reich, and Center on Budget and Policy Priorities Senior Fellow Jared Bernstein -- have repeatedly stated that comparing household budgets to government budgets demonstrates a fundamental misunderstanding of the subject. This analogy is considered so fallacious that William Baumol and Alan Blinder tackle it directly in an Economics 101 textbook, noting that unlike households, the federal government is able to roll over debt and issue its own currency.
Bad economics hasn't stopped right-wing media before, and the same old falsehoods are likely to reappear during the debt limit debate.
Fox News discussed the need to raise the debt ceiling by erroneously linking government debt to family debt, a comparison that demonstrates the network's fundamental misunderstanding of the subject.
In an August 26 letter to Congressional leaders, Treasury Secretary Jack Lew indicated that the debt limit would be reached in mid-October. If Congress cannot arrive at an agreement to raise the limit, the United States will be unable to pay for previously agreed upon obligations, such as Social Security and Medicare payments.
On the August 27 edition of America's Newsroom, co-host Martha MacCallum hosted Fox News' Bob Beckel and former George W. Bush staffer Brad Blakeman to discuss the Obama administration's unwillingness to negotiate over raising the limit. During the segment, MacCallum likened government debt to household debt, claiming that if "your daughter runs up the credit card and has access to it and just goes crazy on it ... you're going to say, 'we're going to pay the bill, but we're going to change things in the future.' What is so very difficult about that?"
But MacCallum's analogy of a daughter running up a credit card bill is completely inaccurate.
Nobel prize-winning economist Paul Krugman directly addressed the conservative notion that household debt and government debt are fundamentally the same, claiming that it ignores a few key realities about the nature of government debt. From his 2012 New York Times column:
First, families have to pay back their debt. Governments don't -- all they need to do is ensure that debt grows more slowly than their tax base. The debt from World War II was never repaid; it just became increasingly irrelevant as the U.S. economy grew, and with it the income subject to taxation.
Second -- and this is the point almost nobody seems to get -- an over-borrowed family owes money to someone else; U.S. debt is, to a large extent, money we owe to ourselves.
Economist L. Randall Wray echoed Krugman's analysis in a Huffington Post piece, adding that the federal government has the ability to issue its own currency to pay debts, a fact that further distorts MacCallum's analogy.
Fox's cheerleading for a showdown over raising the debt limit could result in disastrous consequences for the economy. Following the standoff on raising the debt limit in 2011, Standard & Poor's downgraded the U.S. credit rating, and the Bipartisan Policy Center estimated that the delay in raising it "will cost taxpayers $18.9 billion over 10 years."
Fox has repeatedly misled viewers over the debt limit in recent years, erroneously claiming that raising it would be the same as giving the president a "blank check" and obscuring potential negative consequences.
Fox News ignored a wealth of data from economists to baselessly speculate that President Obama's Affordable Care Act (ACA) is fueling part-time job growth.
On the August 21 edition of Fox News' Your World, Fox Business' Elizabeth MacDonald noted the rise in part-time employment in the U.S. economy, claiming, "now along with the recession, companies are increasingly blaming the health reform law for the rise in part-time work. We're hearing that from retail stores like Dunkin Donuts, Wendy's, and the store Forever 21."
Host Neil Cavuto then brought on Steve Forbes to speculate whether the ACA is causing businesses to shift to part-time workers. Forbes claimed that the law is causing business to put people who want to work "full time into part-time jobs."
During Cavuto's exchanges with MacDonald and Forbes, the following chyrons ran on-screen:
But Fox's fearmongering over the ACA's effects on part-time work (even erroneously citing Forever 21's decision to increase part-time work as a result) is pure speculation, and virtually all evidence suggests that the law's impact on the labor market is either negligible or non-existent.
As more data come in, the law's impact can't be seen in hiring statistics, says Mark Zandi, chief economist of Moody's Analytics.
"I was expecting to see it. I was looking for it, and it's not there,'' says Zandi, whose firm manages ADP's surveys of overall private-sector job creation. If the Affordable Care Act "were causing a drop, you would see meaningful slowing.''
Zandi is not alone in his analysis. Economists Jared Bernstein and Paul Van de Water of the Center on Budget and Policy Priorities, looking at the share of involuntary part-time workers, came to a similar conclusion:
If the ACA's employer mandate were distorting hiring practices in the way critics claim, we'd expect the share of involuntary part-timers to be growing. Instead, it is down about one percentage point off of its peak.
Studying the effect of the ACA on part-time work using average weekly hours data from the Bureau of Labor Statistics, Helene Jorgensen and Dean Baker of the Center for Economic and Policy Research also found similar results:
An analysis of data from the Current Population Survey shows that only a small number (0.6 percent of the workforce) of workers report working just below the 30 hour cutoff in the range of 26-29 hours per week. Furthermore, the number of workers who fall in this category was actually lower in 2013 than in 2012, the year before the sanctions would have applied. This suggests that employers do not appear to be changing hours in large numbers in response to the sanctions in the ACA.
By multiple measures and ways of parsing employment data, economists cannot seem to find any effect of the ACA on part-time work. Furthermore, while MacDonald claimed that the trend in part-time work is accelerating, part-time employment is actually down from its recession peak.
If Fox was actually concerned about part-time work in the U.S., perhaps it should join the chorus of economists who advocate for additional government spending to aid an ailing labor market.
Fox News promoted research that erroneously suggests current federal debt stands at $70 trillion, a figure that amounts to a scare tactic devoid of relevant context.
On the August 15 edition of Fox News' America's Newsroom, hosts Martha MacCallum and Bill Hemmer suggested that the current figure of national debt is grossly underestimated. MacCallum claimed that, according to research by economist James Hamilton, "the true national debt is actually more like $70 trillion and that the government has been lowballing us for years." Hemmer then explained that the figure included Social Security, Medicare, and pension promises and claimed that "America could be in a whole lot of hurt."
The $70 trillion debt figure was also featured prominently in an article on FoxNews.com. According to the article:
Hamilton believes the government is miscalculating what it owes by leaving out certain unfunded liabilities that include government loan guarantees, deposit insurance, and actions taken by the Federal Reserve as well as the cost of other government trust funds. Factoring in those figures brings the total amount the government owes to a staggering $70 trillion, he says.
But according to experts, including liabilities in calculations of debt is inherently misleading.
The first problem is the way in which Fox misleadingly presents the figure as "debt." In an article responding to previous claims of debt being much higher than reported due to unfunded liabilities, The Atlantic's Derek Thompson explained that debt figures shouldn't include future liabilities:
Our $16 trillion in debt and our $87 trillion in "unfunded liabilities" represent two very different ideas: real past promises and projected future promises. Real past promises are, well, very real. We have to pay back our debt. Failing to do it would be an illegal and disastrous default. Unfunded liabilities are future promises, and, since they're not as real, we can change them whenever we want without destroying ourselves. For example, raising the taxable income ceiling and slowing the growth of benefits could reduce the Social Security gap to zero tomorrow.
Indeed, as Media Matters has previously noted, experts agree that citing unfunded liabilities typically amounts to nothing more than a scare tactic, mainly because, as the Congressional Budget Office explained, "no government obligation can be truly considered 'unfunded' because of the U.S. government's sovereign power to tax."
The second problem with Fox's promotion of the figure is that it removes important context, relying on a raw number instead of a relevant percentage. According to Hamilton's report, the bulk of the $70 trillion is due to obligations for Social Security and Medicare -- amounting to a total of $54.1 trillion. But while the figure may seem large, when expressed with relevant context, its gravity is greatly reduced.
In an interview with Media Matters, Josh Bivens, research and policy director at the Economic Policy Institute, explained that when compared with the size of the economy, the liabilities associated with Social Security and Medicare amount to roughly "one and a half percent of GDP." While the figure cited by Fox may be correct, omitting the size of liabilities relative to GDP unnecessarily stokes fears and misinforms viewers.
Furthermore, Bivens noted that other liabilities cited by Hamilton -- such as student loans, housing assistance, and the Federal Deposit Insurance Corp. -- typically have assets directly attached to them that could generate revenue, a fact ignored by the report.
The Wall Street Journal claimed that because private investment typically precedes infrastructure projects, President Obama's call for increased infrastructure investments is misguided. This position, however, ignores the historically positive effect of public investment on private activity and the nation's current need for infrastructure improvements.
In a series of recent speeches on the economy, President Obama has repeatedly called for increased infrastructure investment, claiming "[it] is a key ingredient to a thriving economy." In his July 30 speech in Chattanooga, TN, the president proposed combining a corporate tax rate cut with "new spending on infrastructure projects like roads and bridges."
Reacting to the president's push for increased infrastructure spending in The Wall Street Journal, University of Dayton history professor Larry Schweikart and Hillsdale College history professor Burton Folsom claimed that Obama is ignoring the history of infrastructure in the United States.
According to the authors, the president's position amounts to, "Create the infrastructure, in other words, and the jobs will come," which does not comport with historical evidence. The authors cite a number of examples -- the National Interstate and Defense Highways Act of 1956, the transcontinental railroad, and the Erie Canal -- all of which they use as evidence that private demand spurs the need for investment and not the other way around:
In all of these examples, building infrastructure was never the engine of growth, but rather a lagging indicator of growth that had already occurred in the private sector. And when the infrastructure was built, it was often best done privately, at least until the market grew so large as to demand a wider public role, as with the need for an interstate-highway system in the mid 1950s.
While it may be true that infrastructure typically follows private sector growth, this myopic view on the nexus between private and public investment completely ignores that infrastructure spending can further bolster private activity.
In fact, the authors' example of interstate highway development demonstrates how public investment can support private interests. According to a multitude of studies conducted by M. Ishaq Nadiri and Theofanis Mamuneas for the Federal Highway Administration, public investment in highways consistently results in positive gains for private industry, including productivity growth and general economic development. Indeed, in an overview of studies on the effect of public infrastructure investments on the U.S. economy, economists Alfredo Marvao Pereira and Jorge M. Andraz find that public investment complements private activity, with core infrastructure investments delivering the greatest returns.
Fox Business host Stuart Varney vastly exaggerated the number of people who dropped out of the labor force in July, revealing the veteran business reporter's fundamental misunderstanding of unemployment statistics.
On August 2, the Bureau of Labor Statistics released its monthly employment situation summary for July. The report showed non-farm payroll employment increase by 162,000 and the unemployment rate dropping from 7.6 to 7.4 percent.
Reacting to the report on Fox News' America's Newsroom, Varney quickly cast doubt on the declining unemployment rate, claiming that it was mainly due to people dropping out of the labor force. He claimed that the rate drop was due to the fact that "240,000 people dropped out of the workforce, they just quit trying. That is how the unemployment rate came down to 7.4 percent, a quarter million people just dropped out."
Varney continued to claim that 240,000 people dropped out of the workforce on his Fox Business show, Varney & Co.
But Varney, a veteran business reporter and Fox's go-to source for parsing out economic statistics, is completely misreading the report.
The statistic that Varney cites is the number of people the BLS defines as "Not in the labor force." While the number did increase by 240,000 in the month of July, this is not solely due to people dropping out of the workforce. According to the Bureau of Labor Statistics, those "[n]ot in the labor force":
Includes persons aged 16 years and older in the civilian noninstitutional population who are neither employed nor unemployed in accordance with the definitions contained in this glossary.