A Fox News report on the so-called "unintended consequences" of Seattle, Washington's municipal minimum wage increase included the unsubstantiated claim that better pay is encouraging workers to work less so that they stay in poverty and continue receiving government benefits. This report fits the network's anti-minimum wage, poor-shaming narrative, but ignores the many benefits of increasing the minimum wage.
In June 2014, the Seattle City Council unanimously approved legislation increasing the city's minimum wage to $11 per hour for most employees on April 1, 2015 and to $15 per hour over the course of a 3-to-7-year phase-in period. The decision was praised by many groups like the National Employment Law Project (NELP) as a necessary step toward alleviating inequality and lifting low-wage workers out of poverty.
On the July 22 editions of Fox News' America's Newsroom, Happening Now, and Special Report, correspondent Dan Springer reported that Seattle is facing the "unintended consequences" of increasing its minimum wage. The worst of these consequences, he claims, is that some employees "make too much money to stay on certain welfare programs" and are requesting fewer hours because "the raises [are] pushing them over the income threshold and out of welfare programs like subsidized food, child care, and rent." In all three segments, Springer's evidence for this alleged poverty trap was an interview with Seattle-based radio host Jason Rantz, not with actual recipients who rely on government assistance.
Other so-called "consequences" of the increased minimum wage included restaurants raising prices and requesting patrons not to tip their wait staff. Springer also cited a comic book store in San Francisco (not Seattle) which blames that city's increased minimum wage for its lack of profitability:
The core of Fox's claim that many low-income Americans would rather stay on anti-poverty relief programs than work fits the network's long-standing campaign to attack and shame low-income workers. It is also a variation of the discredited "Welfare Cliff" argument frequently pushed by the network.
In addition, the claim that increased wages are boosting restaurant prices, and thereby hurting tipped workers, is blatantly misleading and plays into Fox's misinformation campaign against the minimum wage. For example, Ivar's Salmon House, a Seattle icon, increased its menu prices and no longer accepts tips. But, according to NPR, the restaurant decided to institute the full $15 minimum wage three years ahead of schedule for its employees and now automatically prices gratuity into the bill, which thus far has not hurt sales or workers. Several restaurants, including one in the District of Columbia, have responded to calls for an increased minimum wage by unilaterally raising their own pay and informing customers that it is no longer necessary to tip wait staff.
Conservative media have claimed for more than a year that Seattle's minimum wage would hurt the city's restaurants and small businesses, but a March 17 report by The Seattle Times revealed little anxiety about the pay increase. In fact, according to data from the Seattle Office of Economic and Financial Analysis, the city witnessed a small spike in restaurant permit requests in the month before wage increases were set to go into effect but otherwise requests have remained relatively flat. Finally, according to a June 4 report by Common Dreams, several of the most outspoken local opponents of Seattle's minimum wage increase have actually opened new restaurants and increased staff hiring since the ordinance went into effect.
Fox & Friends stoked fears that faith-based loan accommodations for some Muslims in Seattle might fund terrorism and go against "American values," despite the fact that faith-based financing is widely practiced around the world and available to all religions.
Seattle's mayor and community leaders released a list of recommendations this month to bring more affordable housing to the city. To increase home ownership, the committee suggested bank lenders explore ways to extend loans to Muslim residents who follow Sharia law, which prohibits the payment of interest on loans.
Fox & Friends decried the recommendation as "funding terror" on July 23. Fox Business anchor Cheryl Casone alleged, "Critics over the years have voiced concerns that this would allow Muslim extremists a new way to use the U.S. financial system to launder money," and an on-screen graphic read:
Co-host Steve Doocy later worried that the loans amounted to "discrimination" in favor of Muslims, while network analyst Peter Johnson, Jr, said that it "opens up a lot of questions" such as concerns about "legitimatizing a law that is really inimical to American values."
But faith-based financial accommodations are not specific to Islam -- Christian denominations benefit from them as well -- and options for Sharia-compliant loans are increasingly common.
Catholic and Christian denominations such as Lutherans similarly benefit from financial instruments that accommodate their religious beliefs, such as faith-based mutual funds. As The Wall Street Journal reported:
Faith-based mutual funds typically screen out stocks of companies that violate the tenets of a given religion or religious denomination. A Muslim fund is likely to screen out companies related to pork production, for example, while a Catholic fund can avoid a maker of contraceptives.
In looking at faith-based funds, be aware that the stock-picking methods vary widely from fund to fund. And potential investors should avoid making assumptions about a fund's screens or its stance on a moral issue based solely on its expressed religious affiliation, says David Kathman, a senior mutual-fund analyst at Morningstar Inc.
For example, Thrivent Financial for Lutherans, a nonprofit investment firm, doesn't screen funds based on religious principles, but donates a portion of its profits to charitable causes. Interested investors should study a fund's prospectus, information on its website and recent shareholder reports.
The Ave Maria mutual fund group, a Catholic fund family, uses negative screens based on a narrow set of moral issues important to its investor base, says George Schwartz, president of the funds. Following rules set by an advisory board, the funds avoid investing in companies that make contraceptives, conduct embryonic stem-cell research or contribute corporate funds to Planned Parenthood, a major provider of abortions and contraceptive services, Mr. Schwartz says. The funds also screen out companies involved with pornography and other adult entertainment, among others, he says.
Shariah-compliant financing makes up "more than $1.6 trillion in assets worldwide" and is continuing to grow, according to USA Today. Like other faith-based accommodations, it simply allows for payment through other methods besides interest.:
Big and small investors are increasingly dipping their toes in the world of Shariah-compliant financing, a sector that has grown to more than $1.6 trillion in assets worldwide over the past three decades. It's one that analysts see as having the potential for even greater growth as the Muslim population grows in the U.S. and Europe.
Earlier this month, Luxembourg issued a $254 million, five-year Islamic bond, known as sukuk. Meanwhile, Hong Kong last month completed its first sale of Islamic debt raising $1 billion. That came after Britain in June became the first Western nation to issue sukuk, an Arabic word that roughly translates as "certificates."
Sukuk act much like traditional bonds, delivering payments to investors until maturity. To comply with Sharia, the bonds have to be tied to some sort of physical asset. Instead of interest, investors are being rewarded with a share of the profit derived from the asset.
Goldman Sachs and HSBC are among western financial service behemoths that have introduced sukuk in recent years. And in the U.S. for the last decade, a number of banks have been arranging for mortgages and auto loans for their Muslim clients that are permissible under Islamic law.
Fears of "discrimination" and terrorism stand in stark contrast to Fox News' handling of other faith-based accommodations -- the network had no problem championing Christian corporation Hobby Lobby's lawsuit against the Obama Administration that sought a religious exemption from the Affordable Care Act's contraception mandate. But in this case, Islam is involved, and Fox has a long history of pushing anti-Muslim rhetoric and hyping fears about Islam.
From the July 13 edition of Premiere Radio Networks' The Rush Limbaugh Show:
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Right-wing media outlets are attacking a new rule from the U.S. Department of Housing and Urban Development (HUD) designed to increase diversity in American neighborhoods, calling it an attempt by President Obama to dictate where people live. But the program merely provides grant money to encourage communities to provide affordable housing and greater access to community resources.
Wall Street Journal editorial board member Mary Kissel is misinforming about a new fair-housing case under consideration by the Supreme Court, scaremongering that a decision to uphold half a century of civil rights precedent could force sellers, lenders, and landlords to establish policies that amount to "informal quotas."
On January 21, the Supreme Court heard oral arguments in Texas Department of Housing v. the Inclusive Communities Project, a fair-housing case that could make it more difficult for victims of discrimination to bring legal challenges against policies that reinforce decades of racial segregation, unintentionally or not. The Inclusive Communities Project argues that the way the Texas Department of Housing administered an affordable-housing plan had a discriminatory effect by entrenching racially segregated housing patterns in the Dallas area. This kind of lawsuit is known as "disparate impact" litigation, which has long been used under various civil rights statutes, including the Fair Housing Act (FHA). It does not require that intentional discrimination be demonstrated, rather that the challenged policies had an unjustified and disproportionate, negative impact on vulnerable groups protected by the FHA. Even though the Department of Housing and Urban Development (HUD) and other fair-housing advocates have successfully relied on disparate-impact litigation for almost 40 years, Texas is arguing that lawsuits under the FHA should newly be required to provide evidence of intentional racial discrimination.
On the January 21 edition of the Journal's WSJ Live video series, Kissel used a hypothetical about the government forcing a bank to make mortgage loans to attack the logic of disparate-impact analysis. Kissel said in this scenario, "Effectively, the government is saying, 'We want informal quotas. You have to lend x to Hispanics, y to blacks, and z to whites.' That doesn't sound constitutional to me." Kissel then went on to say that the Obama administration had "used this theory to shake down banks for millions of dollars. Let's hope the justices actually read the text of the law":
Right-wing media have long objected to the use of disparate impact in fair-housing litigation, calling it a "dubious legal theory." In fact, every one of the 11 federal circuit courts that have considered the question over the last 40 years have reaffirmed that the amelioration of discriminatory effects is a core component of both the intent and text of the FHA, and Congress specifically amended the statute in 1988 in recognition of the fact. Such overwhelming consensus was unsurprising -- the need to begin the slow process of integration after centuries of residential apartheid was specifically designed to be a systematic task, and not a game of Whac-A-Mole aimed at individual bad actors. It was anything but a fringe theory, but rather the product of bipartisan efforts, including those of the Republican HUD chief George Romney in the Nixon administration.
From the July 15 edition of Premiere Radio Networks' The Rush Limbaugh Show:
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A New York Post editorial dismissed the decrepit and dangerous condition of homeless shelters in New York City, claiming a New York Times exposé of the realities of poverty for homeless children demonstrated how "generous" the city had been.
On December 8, the New York Times published the first in a five-part series on poverty in the city titled "Invisible Child," which featured the story of one of the city's 22,000 homeless children whose family currently resides at the Auburn Family Residence, a homeless shelter. The Times described the shelter as "a place where mold creeps up walls and roaches swarm, where feces and vomit plug communal toilets, where sexual predators have roamed and small children stand guard for their single mothers outside filthy showers."
The Post editorial board responded to the story on December 9 by dismissing the family's problems, claiming that because they lived in a 540 square ft. shelter, they "aren't really homeless at all," and concluded that the city of New York had been "too generous" to provide the family with any shelter, even one that featured "mice and reports of sexual assaults and other crimes":
Begin with the family at the center of this story. The mother, father and eight kids aren't really homeless at all. True, they live in housing meant for "homeless families." But their 540-square-foot unit gives them a solid roof over their heads, in addition to city-provided meals and services.
Yes, the family's housing has problems, including mice and reports of sexual assaults and other crimes. But the Times and Elliott, like much of the liberal establishment, seem to think it's the city's job to provide comfortable lives to outrageously irresponsible parents. In this case, that's a couple with a long history of drug problems and difficulty holding jobs.
Something's wrong with that picture.
If the city is at fault here, it might well be for having been too generous -- providing so much that neither the father nor mother seems much inclined to provide for their kids. That would be a story worth reading.
Wall Street Journal editorial board member Mary Kissel falsely claimed that no American homeowners have been wrongfully foreclosed on since the financial crisis of 2008 and 2009. In fact, federal investigations found more than a million homeowners have faced potentially wrongful foreclosures.
On the October 11 edition of Fox Business' Varney & Co., guest host Charles Payne was joined by Fox contributor Monica Crowley and Kissel to discuss the latest quarterly earnings report from JPMorgan Chase. The firm, which has been beset by legal battles, reported robust profits despite extensive legal expenses in the last fiscal quarter.
The discussion turned to an alleged government "shake down" of the bank and demonization of Wall Street when Kissel interjected that, in fact, the financial industry had done nothing whatsoever to deserve extra scrutiny:
KISSEL: There hasn't been a single homeowner who has been identified who was foreclosed on that shouldn't have been foreclosed on. Somebody who was paying his bills.
In fact, more than a million American homeowners were potentially wrongfully foreclosed on during the housing crisis.
An independent review of foreclosures, conducted by the Federal Reserve and the Office of the Comptroller of the Currency (OCC), found that up to 30 percent of the 3.9 million households foreclosed on by 11 leading financial institutions faced wrongful challenges or should have been subject to certain legal protections. From the Huffington Post:
Close to 1.2 million borrowers, or about 30 percent of the more than 3.9 million households whose properties were foreclosed on by 11 leading financial institutions in 2009 and 2010, had to battle potentially wrongful efforts to seize their homes despite not having defaulted on their loans, being protected under a host of federal laws, or having been in good standing under bank-approved plans to either restructure their mortgages or temporarily delay required payments.
They reveal that nearly 700 borrowers who faced foreclosure proceedings had actually never defaulted on their loans.
The Huffington Post further reported, according to OCC data, that nearly a quarter-million borrowers eventually lost their homes. JPMorgan Chase, the bank being discussed on Varney & Co., has paid out millions of dollars in settlements over wrongful foreclosures, "leading Jamie Dimon, JPMorgan's chief executive, to personally apologize for his bank's errors."
Kissel's argument that banks like JPMorgan Chase did nothing do deserve current legal investigation - and instead praising Dimon for not "blow[ing] up the bank" - denies the reality faced by millions of Americans over the past five years.
Fox Business host Stuart Varney misleadingly downplayed the harm that a government shutdown would inflict on the U.S. economy by claiming Wall Street would be mostly unaffected and that it could help the housing market. In fact, a shutdown would harm the housing recovery and economists say it would slow economic growth.
Rush Limbaugh charged that a new rule proposed by the Housing and Urban Development Department (HUD) aimed at promoting fair housing practices was "social engineering" and an attempt on the part of the federal government to "force" people to live in certain neighborhoods.
In the 1970s, schools were ordered to bus children into neighborhoods far away in order to racial balance in the schools. ... [W]hen forced busing erupted, there was outrage all over the country, including liberal Boston. But the social architects of the left didn't listen, and they kept at it ... 'cause they were forcing people to do what people weren't doing of their own volition. People were choosing neighborhoods where they wanted to live, and leftists didn't like the choices they were making. So they basically used the power of the government to force them [to move].
Okay, let's fast forward to today. Social engineering is on the verge of being imposed on entire neighborhoods, adults and children alike. ... What this is, is central planners imposing their will on where you live, not just where your kids go to school--and it's all being done, of course, for our own good.
Limbaugh cites a Wall Street Journal op-ed written by Rob Astorino, the Republican Westchester County executive, as proof that HUD "wants the power to dismantle local zoning" ordinances in order to impose diversity in local communities. Limbaugh goes on to claim that "[a]ll of this is Obama and the Democrats. They run these agencies. They look at zoning as disguised discrimination." Any effort to balance out segregated housing patterns, according to Limbaugh, is "part of [an] ongoing effort to achieve utopia" by "the elites."
What Limbaugh fails to note is that HUD's efforts to integrate racially homogenous neighborhoods is not new, nor was it invented by President Obama or anyone in his administration. It was actually Republican George Romney (father of Mitt), in his role as Richard Nixon's HUD Secretary, who began this effort with the "Open Communities" program in 1968. The program would have given federal grants only to those local governments that provided subsidized housing for poor minorities, in an effort to promote equal opportunities in housing and education.
President Obama has given three high-profile speeches in July and August outlining an economic policy agenda for his remaining term in office as part of the White House's attempts to refocus the national media on pressing economic issues. An analysis of live coverage found that these speeches received unbalanced coverage across cable news outlets, with Fox News devoting by far the least amount of time.
From the August 8 edition of Fox News' Hannity:
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Fox Business host Stuart Varney falsely claimed that policies outlined in President Obama's housing speech will inflate a new housing bubble by "coercing" private banks to provide low interest rates and easy money to unfit borrowers, ultimately setting the stage for another financial collapse.
On the August 7 edition of Fox News' America's Newsroom, Varney argued that the president's call to wind down government involvement in Fannie Mae and Freddie Mac, perhaps dissolving the two mortgage giants altogether, was in fact a ploy to over-regulate private industry. According to Varney, Obama eventually planned to force other banks to lend to the "poor credit borrowers" currently served by Fannie and Freddie. Varney and Fox host Heather Childers agreed that it was a policy of lending to so-called "poor credit borrowers" that caused the financial collapse more than five years ago. They went on to state that the president's proposal would set the precedent for another crash.
Varney continued his attack on the president's housing initiatives on the August 7 edition of Fox Business' Varney & Co. with senior legal analyst Andrew Napolitano who agreed that the president "wants to transform them [Fannie Mae and Freddie Mac] ... into something more sinister" through federal regulation of the banking industry for his own political gain.
Fox is once again attacking the president for policies he does not actually support. Furthermore, they are once again blaming the financial collapse on bad borrowers who were extended loose credit through government regulation, even though economists conclude otherwise.
On August 6, President Obama spoke at Desert Vista High School in Phoenix, Arizona, on the merits of "responsible homeownership." The president outlined a vision to build upon stable growth in the housing market without burdening American taxpayers with the failures of risky borrowers and lenders. From the speech:
We've got to give more hardworking Americans the chance to buy their first home. We have to help more responsible homeowners refinance their mortgages, because a lot of them still have a spread between the rates they're paying right now on their mortgage and what they could be getting if they were able to refinance.
And we've got to turn the page on this kind of bubble-and-bust mentality that helped to create this mess in the first place. We got to build a housing system that is durable and fair and rewards responsibility for generations to come. That's what we've got to do.
The president specified that his plan will not bail out risky lenders and borrowers at the expense of the public, and that it would take steps to curtail some of the rampant market speculation that helped drive the housing bubble before the 2008-09 crash. The president indicated support for winding down the two government-backed mortgage giants; meanwhile, legislation to gradually dissolve Fannie and Freddie over the course of five years is already proceeding through the House and Senate.
President Obama also outlined a multi-step program that would allow borrowers to refinance at today's low rates, make more credit available to well-qualified borrowers, rebuild hard hit communities, and ensure affordable rent to families who opt not to buy a home.
The president also commented on the prospect of immigration reform providing a boost to the housing industry. According to The New York Times, a study by the National Association of Hispanic Real Estate Professionals estimates that the Senate's bipartisan immigration reform bill could generate up to $500 billion in mortgage lending to new citizens and documented legal residents.
Contrary to Varney's continued accusations, economists argue that loose private sector lending, rather than government-sponsored loans to "poor credit borrowers," precipitated the housing market's collapse. While Government-Sponsored Enterprises (GSEs) including Fannie Mae and Freddie Mac did contribute to the market's overall instability, a Brookings report finds that "Fannie and Freddie did not catalyze the market for subprime MBS [Mortgage Backed Securities]; rather, they started to hold such mortgages in the pools they purchased, perhaps because of shareholder pressure or to regain market share."
According to Brookings senior fellow Alice Rivlin, it was the private sector's "extraordinary decline in lending standards" that caused the crisis, and GSEs do not deserve the blame. Dean Baker of the Center for Economic and Policy Research notes that GSEs began buying junk bonds "late in the game" as a response to pressure from private market, citing a Moody's investor document. Data comparing GSE lending to the private sector indicates that GSEs took fewer risks than the private sector.
Right-wing media have responded to a proposed rule from the U.S. Department of Housing and Urban Development (HUD) with a barrage of false attacks and overheated rhetoric. The rule, which attempts to increase minority access to community resources like public transportation and education, has been called an act of "tyranny" designed to "encourage diversity, for diversity's sake."
After calling today's presidential address on the economy "a case of political déjà vu," America Live guest host Shannon Bream claimed that the economy has "mostly struggled" since Obama took office, despite evidence to the contrary.
The July 24 edition of Fox News' America Live opened with a preview of President Obama's economic speech taking place at Knox College in Illinois. Bream immediately framed Obama's economic record negatively, saying, "Critics argue, they think it's just going to be more of the same, returning to themes of higher taxes and higher spending, leaving some thinking he's just out of ideas. President Obama took office, since then the economy has mostly struggled." She then asked, "If the critics are right and there's nothing new here, what is the speech really all about?"
But in fact, housing prices have consistently risen, the Dow Jones Industrial average, also on the rise, has posted record highs, and private sector job growth has steadily increased since February 2010:
Although the economy has improved, Republican obstructionism "has blocked pro-growth policy and backed job-killing austerity," Guardian columnist Michael Cohen argued. Economic experts have argued that lowering public sector spending has held the economy back and government spending cuts have consistently lowered GDP growth in recent years, but Bream made no mention of Republican plans to gut the president's proposals to remedy this.