From the June 19 edition of Fox Business' Varney & Co.:
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Right-wing media have repeatedly used dishonest and misleading charts from Sen. Jeff Sessions (R-AL) to decry spending on nutrition assistance and other programs for needy Americans.
Fox News, Fox Nation, and The Weekly Standard have, over the course of many months, taken charts from Sessions' staff depicting spending on food stamps (also known as the Supplemental Nutrition Assistance Program, or SNAP) and other spending on low-income Americans in grossly misleading ways with out-of-context numbers. On June 12, Fox & Friends First cited Sessions when airing a graphic showing spending on SNAP being more than five times greater than spending on veterans job training and education programs:
Similar charts appeared on Fox Nation and The Weekly Standard. The Congressional Budget Office (CBO) projection that is cited on the graph does not list any spending on veterans job training and education, so that number cannot be verified. But the White House projects that spending on this program will increase over the next five years, after it already grew dramatically after 2009 -- while spending on SNAP is projected to decrease over the same five-year period.
But it is ridiculous to compare a veterans education program -- which is limited to only military veterans and thus a very small segment of the population -- to SNAP, which is an income security program (indeed, it is listed as such in the CBO document) and is open to every American that meets eligibility requirements. And many veterans and their families are eligible for SNAP and active-duty service members and their families use the benefits. But if one was to look at income security spending for veterans, CBO projections show that more is actually spent on veterans -- a total of $801 billion on income security for veterans over 10 years, and a much larger amount than the veterans program highlighted by Sessions and the right-wing media.
During the segment, Fox Business' Diane Macedo noted that "the USDA also provides bonuses totaling about $50 million per year to states that meet high enrollment targets." These awards, which Sessions brought up on Fox News in June 2012, date back to the Bush administration, and have their origin in the 2002 farm bill.
From the June 1 edition of Fox News' Fox & Friends Saturday:
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A Cincinnati Enquirer editorial attacked the city's proposed budget for increasing the deficit by $8 million by 2015 but failed to point out that a large portion of the budgetary shortfall is due to a $22 million cut in funding from Republican-controlled Ohio state government.
The editorial claimed that the proposed plan -- which would technically balance this year's budget -- would amount to "kicking the can down the road," and that the primary goal should be a "structurally balanced budget, in which revenues exceed expenses."
The plan under consideration would technically balance this year's ledger. But unfortunately, it would repeat a pattern all too common in recent years of kicking the can down the road. Their plan actually increases the deficit for 2015 by $8 million--but that won't become a crisis until long after the upcoming elections in November. It's become routine, for council members as well as other elected officials, to avoid difficult decisions today because of concerns about the next election.
We need a budget that accomplishes the city's primary goals of attracting new residents and new jobs. At the same time, we need to move toward a structurally balanced budget, in which revenues exceed expenses. With tax increases unlikely, that means cutting expenses. Job cuts will be necessary to get anywhere close to a structurally balanced budget. Despite previous job cuts, the city budget has not been structurally balanced in years.
However, the editorial fails to note that the budgetary shortfall is largely created by a reduction in funds by the Republican-controlled state government. Policy Matters Ohio, an Ohio based think-tank, explained that the massive spending cuts by the state legislature reduced local government funds by a billion dollars during fiscal years 2012 and 2013, with the city of Cincinnati losing more than $40 million compared to 2010 and 2011. Indeed a brief outlining of the budget from the city of Cincinnati pointed out that the deficit was exacerbated by the state-level decision to implement a 50 percent reduction in local government funds, which eliminated "a $22.2 million revenue stream from the City's budget."
Despite the reduction in funds, Cincinnati is still cutting spending as well. The budget proposal laid out by the city manager calls for eliminating almost $11.3 million in spending over the next year, including cuts to police and locally financed programs.
A new review of the infamous Reinhart-Rogoff debt-to-GDP study further undermines the right-wing claim that high sovereign debt leads to low economic growth.
In their paper, "Growth in a Time of Debt," Harvard economists Carmen Reinhart and Kenneth Rogoff supported the notion that high levels of sovereign debt carry disastrous consequences -- particularly when debt reaches 90 percent of GDP -- that was promoted throughout the media.
Even though that premise was thoroughly debunked in April, members of the right-wing media have clung to the notion that while the 90 percent debt-to-GDP threshold in the Reinhart-Rogoff study was inaccurate, its conclusion that high debt slows economic growth remained unchanged.
When faced with the discredited research, Wall Street Journal editorial board member Stephen Moore claimed as debt mounts, "the negative effects of that become more pronounced." Fox Business' Lou Dobbs dismissed the critique of the Reinhart-Rogoff study as focusing too heavily on "a small mistake." Douglas Holtz-Eakin of the American Action Forum claimed that "the simple fact that debt ultimately hinders growth is unchanged." And editorials in both The Washington Post and The Wall Street Journal responded to the critique of the study by renewing calls for debt reduction in fear of negative economic outcomes.
New research further undermines this right-wing narrative. University of Michigan economist Miles Kimball and undergraduate researcher Yichuan Wang, examining the Reinhart-Rogoff data, conclude that high levels of debt have no link to slow, much less reverse, long term economic growth:
Based on economic theory, it would be surprising indeed if high levels of national debt didn't have at least some slow, corrosive negative effect on economic growth. And we still worry about the effects of debt. But the two of us could not find even a shred of evidence in the Reinhart and Rogoff data for a negative effect of government debt on growth.
Kimball and Wang's findings provide yet another blow to right-wing media's academic defense of austerity.
Media coverage of the effects of across-the-board spending cuts has narrowly focused on Federal Aviation Administration (FAA) furloughs, largely ignoring the broad effects of cuts on other programs and agencies.
On April 26, the House of Representatives approved legislation to end furloughs at the FAA, which had caused significant flight delays. The agency had previously warned that automatic spending cuts would force rolling furloughs of roughly 15,000 air traffic controllers and other staff.
In the week leading up to the House vote, media was heavily focused on the effects of FAA furloughs. A Media Matters analysis found that in the week of April 22 to April 28, 49 cable and broadcast evening news segments mentioned the automatic budget cuts. These segments offered little analysis beyond highlighting the long lines and flight delays expected at airports.
Media's focus on the effects of budget cuts in the past two months has largely been confined to discussing effects on the FAA. On May 24, "Furlough Friday", four federal agencies -- the Environmental Protection Agency (EPA), the Department of Housing and Urban Development (HUD), the Internal Revenue Service (IRS) and the Office of Management and Budget (OMB) -- forced 115,000 employees to take a day of unpaid leave. As reported by Politico, this forced closure represented the "largest nonweather related partial government shutdown in recent memory."
Despite the impact of "Furlough Friday" on the ability of federal agencies to operate, media remained largely silent. Broadcast and cable news segments were seven times more likely to cover sequestration during the week of FAA furloughs than the week of EPA, HUD, IRS and OMB furloughs. The disparity comes despite the latter round of forced leave affecting nearly eight times more workers across a broader range of government.
Despite the media's lack of coverage, sequestration is still in place and all federal agencies are being forced to cut corners. The budget cuts even altered Memorial Day celebrations across the country over the holiday weekend.
The long-term effects of fiscal austerity can be seen from low-income school closures to impaired military readiness. Another 700,000 federal employees -- mostly in the Department of Defense -- will be forced to take unpaid leave through the remainder of the year.
Media coverage of the automatic spending cuts commonly known as sequestration has tapered off since the policies went into effect on March 1. This drop in coverage comes as more Americans report having personally felt the effects of the cuts.
In the face of repeated infrastructure related disasters, Fox News host Neil Cavuto has continued to dismiss calls for an increase in infrastructure spending, claiming that spending on infrastructure is high enough. In reality, infrastructure spending has plummeted in recent years.
Following months of media calls for deficit reduction, cable news channels spent just over 7 minutes reporting on a revised Congressional Budget Office (CBO) projection that the 2013 deficit will decline by more than previous estimates. Broadcast network news evening shows did not cover the new report.
Fox & Friends co-host Brian Kilmeade reacted to a new Congressional Budget Office (CBO) report showing the 2013 deficit dropping by $200 billion by lamenting that the report might discourage further austerity measures.
In a May 14 report, the non-partisan CBO estimated that in 2013, the federal deficit will be $200 billion lower than previously projected, the smallest deficit since 2008. The report also predicted that the deficit over the next 10 years will be $618 billion less than previously thought.
Kilmeade reacted to this news with calls for increased austerity, lamenting that the "positive news" in the CBO report might lead away from a mindset of "fiscal discipline." Kilmeade concluded, "I just hope we still feel the urgency to get our budget in order."
However, Kilmeade's concern may be misplaced. As The Washington Post's Ezra Klein noted in a May 14 post, the new CBO estimate makes the deficit look "downright manageable":
[T]he debt disaster that has obsessed the political class for the last three years is pretty much solved, at least for the next 10 years or so.
In fact, that's probably too much deficit reduction, too quickly.
Many economists agree that too much in spending cuts too quickly can hurt economic growth. In an April 27 post on his New York Times blog, Nobel Prize-winning economist Paul Krugman called continued efforts at deficit reduction through austerity measures "very bad policy," explaining that recent declines in government spending -- at the federal, state, and municipal levels -- have contributed to slow economic growth. Similarly, in a February 8 Guardian op-ed, the Center for Economic and Policy Research's Dean Baker asserted that "deficit reduction is throwing people out of work" and concluded that "we need deficits today to fill a huge hole in demand created by the private sector."
Additionally, data from the Bureau of Economic Analysis show that austerity has led to a decline in government spending, which has turned into a drag on economic growth:
Media outlets largely ignored economic inequality in discussions about the overall economy, despite mounting evidence suggesting that the problem has increased in recent years.
While media have been quick to highlight ostensibly positive gains for the economy -- notably that the Dow Jones Industrial reached 15,000 for the first time in its history, GDP grew by 2.5 percent in the first quarter of 2013, and unemployment for April edged down to 7.5 percent -- signs of rising income inequality have gone largely unmentioned.
According to a recent Media Matters analysis, economic coverage for the month of April barely mentioned issues of inequality. In 123 total segments discussing policy effects on the macroeconomy, only 12 touched upon the growing disparity in economic gains for the rich and the poor.
The discrepancy in covering economic inequality stretched across all major outlets. ABC, CBS, and NBC provided no mentions of the problem. MSNBC devoted the most coverage, with roughly 25 percent of segments on the economy discussing rising inequality.
While the media have pushed inequality out of the spotlight, mounting evidence suggests that the problem is getting worse.
As for the rising stock market, while any gains should be viewed as a positive for the economy as a whole, the distribution of those gains paints a less than perfect picture. According to a Gallup poll, 52 percent of Americans currently hold stocks, a number that has been consistently declining in recent years.
Other indicators highlight the deep-seated nature of economic inequality. According to Congressional Budget Office data, from 1979 to 2007 the top one percent of income earners have seen their after-tax share of total income rise by more than 120 percent, while the bottom 20 percent of earners have seen that share decline by almost 30 percent.
And according to an analysis by journalist David Cay Johnston, economic gains in recent history show an even darker reality - from 2009 to 2011, 149 percent of increased income was reaped by the top 10 percent of earners.
Meanwhile, the economy is currently suffering from an epidemic of long-term unemployed workers, which, as noted in a Bloomberg editorial, could create a permanent underclass of workers unable to reenter the labor force.
Some of the media's attention -- albeit very little -- has focused on the inequitable impact of sequestration on low-income individuals. The overwhelming majority of discussion of inequality in April, most notably on MSNBC, focused on Congress' unwillingness to mitigate the impacts of sequestration of the poor, while members were seemingly enthusiastic to correct inconveniences for those at the upper end of the income scale.
While some attention has been given to economic inequality, the broader trend in media is to ignore the issue, preferring instead to focus on the widely recognized non-issue of short-term deficit and debt reduction.
Evening news coverage throughout April touched upon several economic issues, including income inequality, deficit reduction, and entitlement cuts. A Media Matters analysis of this coverage reveals that many of these segments lacked proper context or necessary input from economists, while some networks ignored certain issues entirely.
Fox News claimed that federal government policy was failing to lower unemployment by citing recent decisions made by the Federal Reserve. However, economists note that Federal Reserve action alone cannot increase employment, and federal spending must be increased to improve the economy.
Reacting to the May 2 weekly jobless claims report, Fox Business anchor Stuart Varney dismissed the 18,000 drop in initial claims to the lowest level in five years, stating that "it's a better number, but it's still not a good number." Varney went on to claim that the Federal Reserve's recent decision to continue its bond buying program was not producing expected drops in unemployment, claiming "unemployment rates are not falling the way they should when you're printing all this money." From America's Newsroom:
While Varney was quick to dismiss the government's role in strengthening the labor market by citing the Federal Reserve and the effect of current monetary policy on job creation, he completely ignored the fact that decreases in government spending have negatively impacted the economy, overlooking statements made by the Federal Reserve and the warnings of experts.
In the statement released by the Federal Reserve on May 1 outlining its future decisions regarding monetary policy, the board specifically cited that "fiscal policy is restraining economic growth."
Indeed, many analysts have been claiming that actions by the Fed are not enough to bolster economic growth, and that increased government spending -- that is, expansionary fiscal policy -- is necessary to improve current conditions.
In The Washington Post's Wonkblog, Roosevelt Institute fellow Mike Konczal explained how actions taken by the Federal Reserve have failed to counteract the negative effects of decreased government spending:
But the most important lesson to draw is that fiscal policy is incredibly important at this moment. In normal times, the broader effect of government spending, or the fiscal multiplier, is low because the central bank can offset it. But these are not normal times. It's not clear why the Federal Reserve's actions haven't balanced out fiscal austerity. But since they haven't, we should be even more confident that, as the IMF put it, "fiscal multipliers are currently high in many advanced economies."
The main point here is that while the Federal Reserve is attempting to spur economic gains through monetary policy, it simply can't do enough to counteract recent contractions in government spending. Former Labor Secretary Robert Reich echoed Konczal, stating "easy money from the Fed can't get the economy out of first gear when the rest of government is in reverse."
By only focusing monetary policy as the government's way to bolster employment and economic growth, Fox is only telling half the story -- the negative effects of decreased government spending are far too damaging to be mitigated elsewhere -- and continuing its trend of downplaying positive economic news.
The Wall Street Journal reinforced its call for spending cuts, seemingly undeterred by recently discredited research and overwhelming evidence showing that fiscal tightening negatively impacts economic growth.
Reacting to recent research that has questioned austerity proponents' most cited figure -- the 90 percent debt-to-GDP threshold as identified by Camen Reinhart and Kenneth Rogoff -- an April 30 Wall Street Journal editorial claimed that the new revelations are being used to "revive the spending machine."
Instead of addressing the fact that the discrediting of Reinhart-Rogoff took, as The Washington Post's Neil Irwin puts it, a "great deal of wind out of the sails from those who argue that high government debt is, anywhere and everywhere, a bad thing," the WSJ instead used this event to attack government spending in all forms and reinforce calls for austerity. From the editorial:
The Keynesians are now using a false choice between "austerity" and growth to justify more of the government spending they think drives economic prosperity. The brawl over Reinhart-Rogoff is thus less a serious economic debate than it is a political exercise to turn more of the private economy over to government hands.
After five years of trying, we should know this doesn't work. The real way to promote a stronger economy is more austerity and reform in government, and fewer restraints on private investment and risk taking.
Arriving at such a conclusion requires not only obscuring the importance of the Reinhart-Rogoff debt threshold and its importance in pushing global austerity measures, but also ignoring a few key economic realities.
First, the editorial uncritically dismisses the impact of previous economic stimulus in order to bring into question any future government spending:
[Former White House economist Larry] Summers says governments should borrow more now at near-zero interest rates to invest in future growth. But this is what we were told in 2009-2010, when Mr. Summers was in the White House, and the $830 billion stimulus was used to finance not primarily roads or bridges but more unionized teachers, higher transfer payments, and green-energy projects that have since failed. Why will it be different this time?
The WSJ fails to note that the economic stimulus that was enacted in 2009 is widely regarded as a success. According to a WSJ forecasting survey conducted in 2010, 70 percent of economists agree that the stimulus helped the economy, and a May 2012 Congressional Budget Office report noted that it created between 900,000 and 4.7 million full-time-equivalent jobs in 2010 and between 600,000 and 3.6 million in 2011.
Second, and perhaps more notably, the editorial completely ignores the mounting evidence that too little government spending is already hurting the U.S. economy. When individual contributors to GDP growth are isolated, it becomes clear that in the majority of recent quarters, cuts in government spending have pulled down overall economic growth. In fact, the negative contribution of too little government spending has compromised growth even in the face of strong private contributions.
And while editorial board member Stephen Moore may feel that recently enacted across-the-board spending cuts have helped economic growth, economists and even Fox News personalities recognize that they have and will continue to negatively impact GDP growth.
WSJ's call for ever elusive "pro-growth" spending cuts stands in stark contrast to observations made by former pro-austerity advocates. The International Monetary Fund, which previously called for austerity measures throughout Europe, recently noted that fiscal tightening has failed to deliver a reduction in debt due to declines in output. Even John Makin of the conservative American Enterprise Institute now claims that the U.S. has cut federal spending enough to substantially reduce the debt-to-GDP ratio.
Fox News covered Democratic criticism of harmful and unnecessary spending cuts as a purely political maneuver, without acknowledging that those criticisms are reflected in actual economic data, and echoed by economists and even by House GOP leadership.
On the April 29 edition of America's Newsroom, host Bill Hemmer set up an interview with Wall Street Journal editorial board member Stephen Moore by suggesting that only Democrats argue that America is not in a "debt crisis," and hinted that the raw total of U.S. debt belies that claim. Moore proceeded to divert the conversation far away from economic reality, first citing a Fox News poll on public concerns about the debt, then accusing anti-austerity Democrats of merely seeking to protect "the favored programs that they care about," before finally misleading viewers on the relationship between economic growth and spending cuts. From America's Newsroom:
There are a few layers of deception to unpack here:
These sorts of facts in the U.S., and related ones from other economies, are threatening to upend the entire austerity movement, as Irwin observes. But while that debate proceeds and evolves elsewhere, Fox News continues to offer conservatives a venue to avoid reconciling ideology and fact.