The Wall Street Journal's Stephen Moore cited figures that independent analysts have called misleading to hype Florida Gov. Rick Scott's claims about his administration's job creation record.
In a post on the Journal's Political Diary blog titled "The Florida Phenom," Moore wrote that Scott's job creation record may "save him from defeat" in the upcoming gubernatorial race. Moore touted Scott's claim that his administration had already completed half his campaign promise to create 700,000 jobs by 2017, concluding "The thing most likely to save him from defeat is, as Joe Biden once put it, that three letter word: J-O-B-S":
Now the needles are all pointed in a northward direction, and the man in charge during the turnaround is Republican Gov. Rick Scott. He promised 700,000 new jobs in seven years, and in an interview last weekend he said, "we're half-way there." The state has seen employment rise by just over 350,000 since 2010. A new analysis by the nonpartisan Florida Economic Estimating Conference is expecting 900,000 new jobs by 2018.
Sure, there's a national recovery, but the unemployment rate in Florida "has fallen almost twice as much as the national average," the governor noted. Mr. Scott credits pro-growth policies. "We cut taxes 24 times," he said, including business and property taxes by $200 per homeowner. The budget deficit has been tamed. The housing oversupply has been cut by one-third.
Despite Moore's endorsement, Scott's job creation claims have been criticized by independent analysts. PolitiFact Florida pointed out that Scott's campaign promise was actually to create 700,000 jobs on top of the 1 million the state was already expected to add - in essence promising to create 1.7 million jobs by 2017:
As the Competitive Enterprise Institute (CEI) prepares to release its annual report on the cost of regulations, the media should be aware of the organization's documented and vested interest in attacking government regulations, as well as the report's flawed methodology and biased analysis.
According to a May 20 Wall Street Journal editorial, CEI plans to release its report on federal regulations for 2012, the cost of which CEI Vice President for Policy Wayne Crews estimates exceeded $1.8 trillion.
Conservative media will undoubtedly use the CEI's most recent report to criticize government regulation at large, and particularly the regulations enacted by President Obama.
Here are a few reasons why media should be wary of touting the CEI report.
Economic media coverage has been heavily focused on advocating for deficit reduction, even as deficits decline and the federal government posts a surplus.
A Media Matters analysis on economic news coverage in the month of April found that media continued their long-established focus on deficit reduction. In 45 of 123 total segments discussing policy impacts on the economy, guests or hosts on network and cable news advocated for deficit reduction as a priority.
Calls for deficit reduction beat out mentions of other economic issues, most notably the need for economic growth and job creation, and economic inequality.
The continued focus on deficit reduction is particularly interesting given the fact that, in the month of April, the federal government posted the largest budget surplus in five years. Furthermore, according to the Congressional Budget Office, current and projected deficits are expected to decline in coming years.
Even conservatives have recently acknowledged that deficit reduction is not the country's most pressing economic issue. House Speaker John Boehner (R-OH) and House Budget Committee Chairman Paul Ryan (R-WI), agreeing with President Obama, stated that the country is not facing an immediate debt crisis, a notion shared by prominent Democrats. And John Makin, a scholar at the conservative American Enterprise Institute, remarked that Congress has already enacted enough deficit reduction.
Meanwhile, economists have expressed concerns over media's focus on deficits, instead calling attention to resolving the very real immediate crisis of unemployment. Economist Jared Bernstein recently began a series on the path to full employment, and numerous other economists have advocated increased short-term spending to bolster economic growth and job creation.
Furthermore, former Labor Secretary Robert Reich has even pointed out that focusing on jobs and growth -- not spending cuts -- provides an effective avenue for deficit reduction.
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.
While reporting that weekly jobless claims have fallen to a five year low, Fox News' Jenna Lee said that, "much of the job growth has come from fewer layoffs, not increased hiring, which begs the question whether it is real job growth at all." While Lee implied an inverse relationship between jobless claims and job growth, the U.S. Labor Department's first time unemployment claims report is only an indicator of layoffs, not job growth. In fact, the April jobs report showed that 165,000 jobs were added to the economy and the unemployment rate fell to 7.5 percent - the lowest since December 2008.
On the May 9 edition of Fox News' Happening Now, host Jenna Lee reported on the weekly initial jobless claims report issued by the Labor Department. Lee acknowledged that the numbers were encouraging but then erroneously framed the report as an indicator of slowed job growth, questioning "whether it is real job growth at all."
Lee's question implied an inverse relationship between the job growth and initial jobless claims report, which is a weekly report that tracks the number of Americans who apply for unemployment benefits. Jobless claims don't measure job growth, as Lee implies. The data are only a proxy for layoffs and necessarily do not measure job growth - if someone does not get laid off, that's a job maintained, not created. Contrary to Lee's suggestion, Bloomberg reported that, "Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates."
Lee questioned "whether it is real job growth at all." According to the report that actually tracks job growth, employers added 165,000 jobs in April and the unemployment rate fell to 7.5 percent -- the lowest it has been since December 2008. Private sector job growth has consistently risen since 2009:
But Fox News recently attacked that report, too. Their coverage was largely negative, despite the fact that economists generally agree that the report shows positive gains in the labor market.
Fox News' coverage of the April unemployment report was largely negative, despite the fact that economists largely agree that the report shows positive gains in the labor market.
Fox News host Jon Scott identified all retirees as those "who could be working" in order to disparage the labor force participation rate from April's positive jobs report.
The Bureau of Labor Statistics' (BLS) May 3 jobs report determined that the economy added 165,000 jobs in April, while the unemployment rate fell from 7.6 to 7.5 percent. BLS also reported that the labor force participation rate remained unchanged at 63.3 percent.
On Happening Now, Scott wondered of the labor force participation: "So, if this participation rate is at 63 percent, that leaves, what? Thirty-seven percent of the country who could be working, not working?" Doug Holtz-Eakin, former director of the Congressional Budget Office under President George W. Bush, responded, "Yeah. If you look at the ratio of the number of people in the United States who are working, to the number in the United States, that's a low number. We're not taking advantage of the skills of our population."
BLS determines the unemployment rate after conducting the Current Population Survey, a monthly sample of approximately 60,000 households where people are asked about the labor force status of household members.
The labor force participation rate that Scott referenced is the percentage of the civilian noninstitutional population who identified as either employed or actively looking for work. But here's where he dropped the ball -- the civilian noninstitutional population, as BLS defines it, includes all people 16 years of age and older, who are neither institutionalized (in a penal or mental institution) nor active duty military. So the 37 percent of people who self-identified as "not in the labor force" includes retirees and stay-at-home spouses, not generally groups "who could be working" or want to work.
Holtz-Eakin's claim was even more extreme, comparing the civilian labor force to the total population of the nation, which of course includes children.
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.
From the April 29 edition of Fox News Channel's Hannity:
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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.
A Wall Street Journal article debunked the myth that federal disability benefits are to blame for the shrinking labor force, "exaggerated" claims that have previously been pushed by the paper itself.
An April 29 Journal article headlined "Real Culprit Behind Smaller Workforce: Age" explained that the recent decrease in the labor force -- the number of employed and unemployed Americans who are currently seeking work -- "has more to do with retiring baby boomers than frustrated job seekers abandoning their searches." The article noted that claims that Americans are voluntarily leaving the workforce to receive Disability Insurance instead of working, for example, "may be exaggerated," and explained that retirees and students made up a far more significant portion of those leaving the labor force. The article included the following graph, showing disability was the least common reason for individuals leaving the workforce in March 2013:
However, the Journal has previously pushed the myth that Disability Insurance accounted for much of the dropping labor force participation rate. An April 10 article headlined "Workers Stuck in Disability Stunt Economic Recovery" claimed that workers receiving disability benefits were costing the economy billions by not instead participating in the labor force, and quoted economist Michael Feroli's claim that "worker flight to the Social Security Disability Insurance program accounts for as much as a quarter of the puzzling drop in participation rates, a labor exodus with far-reaching economic consequences." These claims are in direct contradiction to the Journal's most recent reporting.
According to Center for Economic and Policy Research co-director Dean Baker, research shows if more individuals who receive disability benefits worked, it would have a relatively minor effect on employment figures. Harold Pollack, an expert on disability policy at the University of Chicago's School of Social Service Administration, dismissed the idea that disability benefits might be "luring away people who could work." Despite these facts, media continue to attack federal disability benefits by pushing the false claim that disability programs harm the economy.
Fox News accused President Obama of promoting dependency and illegal immigration with a food stamp program that started under the Bush administration.
On the April 26 edition of Your World, Cavuto attacked a partnership that educates Spanish-speaking populations about Supplemental Nutrition Assistance Program (SNAP) eligibility. Wright claimed that "the Obama administration wants to encourage government dependency and, it looks like, illegal immigration" with the program. Cavuto agreed with Wright and added "it looks like we are doing a beeline to help folks who should not be here in the first place."
But the partnership was created under President George W. Bush in 2004. Salon reported that it "doesn't actually provide food stamps to immigrants," only information on benefits that are already available to those who had been in the country legally for five years:
Indeed, official USDA guidance notes, "SNAP eligibility has never been extended to undocumented non-citizens." An immigrant hoping to take advantage of American food stamps would have to get a green card, move here, wait five years, and then cash in. It's not exactly a get-rich-quick scheme.
There are some exceptions for children and the infirm, but fewer than 4 percent of food stamp users are non-citizen legal immigrants.
Why would the U.S. want to educate Mexican-Americans about nutrition assistance? Because Latinos have disproportionately high hunger rates.
Fox News figures accused the Obama administration of trying to "maximize" sequestration pain on the American people through the Federal Aviation Administration's furloughs of air traffic controllers, despite the fact that federal agencies are required by law to cut their programs evenly.
On April 22, the automatic spending cuts known as sequestration forced the F.A.A. to begin furloughs for air traffic controllers. The unpaid leaves delayed more than 1,200 flights that day, according to the F.A.A.
Although the legislation provides little to no room for agencies to decide how to implement the budget cuts, Fox figures used the furloughs to argue that the administration is trying to inflict maximum pain from sequestration. On his radio show, Fox News host Sean Hannity claimed that administration is furloughing air traffic controllers "because they want to maximize the amount of pain that you the American people are feeling."
In fact, as a New York Times editorial explained, "the sequester law is clear in requiring the F.A.A. and most other agencies to cut their programs by an even amount." This provision prevents agencies from deciding how and where to implement the budget cuts:
As it happens, the sequester law is clear in requiring the F.A.A. and most other agencies to cut their programs by an even amount. That law was foisted on the public after Republicans demanded spending cuts in exchange for raising the debt ceiling in 2011. Since then, the party has rejected every offer to replace the sequester with a more sensible mix of cuts and revenue increases.
As Forbes explained, the F.A.A. and other federal agencies "have little or no discretion to target spending cuts":
The across-the-board nature of the spending cuts has been well-noted. Federal agencies have little or no discretion to target spending cuts by, say, getting rid of obsolete or poorly-run programs. They have to cut them all, the good ones and the bad ones alike. They can't lay off poorly performing workers, they must furlough everyone.
But the fact that the legislation prevents the Obama administration from targeting the cuts has not prevented Fox figures from parroting Hannity's claim.
A Media Matters analysis of news coverage of the proposed Keystone XL pipeline since the 2012 election shows that the media continue to largely ignore the risk of an oil spill, while promoting the economic benefits of the project. Meanwhile, Fox News and the Wall Street Journal have dismissed Keystone XL's climate impacts, instead serving as a platform for the pipeline's champions.