Fox Business host Stuart Varney claimed that any signs of a weakening labor market cannot be explained by sequestration. However, economists have linked the expected slowdown in hiring to sequestration, and note that any negative impacts are likely to be temporary.
Reacting to an unexpected rise in weekly jobless claims, America's Newsroom host Bill Hemmer asked Varney if any of the rise was due to sequestration. Varney responded by claiming, "No...There's no seasonal factors, it's not weather, it's not sequester, it's just weakness in the underlying economy."
Economists do not support Varney's insistence that sequestration has had no impact on the job market. An April 3 Associated Press report noted economists' opinions on the link between sequestration and hiring:
Jim O'Sullivan, chief United States economist at High Frequency Economics, now expects just 160,000 net jobs in the March employment report, instead of 215,000. Jennifer Lee, an economist at BMO Capital Markets, said her group had lowered its forecast to 155,000, from 220,000.
Ms. Lee said businesses might have temporarily suspended hiring because they wanted to see the impact of $85 billion in government spending cuts, which began on March 1.
Furthermore, while Varney used the rise in weekly jobless claims to paint a thoroughly negative picture of the labor market, the same AP report noted that "most economists say any slowdown is likely to be temporary."
Indeed, when a more stable measure of the labor market is examined - such as the preferred four-week moving average of initial jobless claims - a much less negative picture emerges. While the four-week average rose in the April 4 report, the underlying trend of weekly claims has been positive. Since the beginning of 2013, the trend of initial claims has declined greatly, producing four-week averages at levels not seen since 2008.
Fox Business Network's Cheryl Casone misrepresented a tax credit in the Affordable Care Act by omitting vital information about the program and warning it could lead to "a huge tax bill."
On Fox News' America's Newsroom, Casone mischaracterized the consequences of the ACA's insurance exchange tax credit application, claiming "if you do not accurately project your 2014 income by October 1, 2013 -- that is this year -- you're going to be hit with a huge tax bill." Casone went on to explain: "you're going to get a tax subsidy from the government to help pay for getting into the exchanges" and noted that "you may have to pay the government back in the spring of 2015":
But Casone mischaracterized the program by claiming it will lead to a "huge tax bill." Recipients may have to repay the tax credit -- in part or in full -- received for the insurance exchange if the recipient projected his or her income lower than it turned out to be. But Casone failed to acknowledge that should an individual's projected income be higher than his or her actual income, he or she, if eligible for the credit, will receive a refund from the government.
As Tim Jost at Health Affairs explained last year, this method is a widely accepted way of providing private health insurance to low- and middle-income families:
At the heart of the Affordable Care Act (ACA) health care reforms are the premium tax credits, which will extend health insurance coverage to 18 million lower and middle-income Americans. The idea of using tax credits to purchase private health insurance for the uninsured is one of a number of the historically conservative policy positions adopted by the ACA. Both the Paul Ryan Roadmap and a recent proposal by James Capretta and Robert Moffit on How to Replace Obamacare also support premium tax credits to make health insurance accessible to Americans.
To create tax credits that are sufficiently substantial to in fact make health insurance affordable to lower-income Americans, without creating a program so costly that it is unaffordable to the country, tax credits must be means-tested and must be structured so as not to crowd out employment-based insurance. This turns out, not surprisingly, to be very complicated.
Reconciliation. Although the tax credit is paid in advance directly to an insurer on a monthly basis, it is in fact a tax credit that must be claimed on the taxpayer's annual income tax return. Final eligibility for the credit, therefore, cannot be known until the taxpayer files his or her annual return, at which point household income for the year will be finally determined. A "reconciliation" must then occur between the tax credit already received and that to which the individual is actually entitled. If over the course of the year household income turns out to be greater or less than projected, or if household composition or compliance with other eligibility requirements has changed, the final tax credit may turn out to be greater or less than the amount already paid.
If the taxpayer turns out to have been eligible for more than had been paid, the taxpayer gets a refund. If, however, the government has paid more than the taxpayer in fact turns out to be entitled to, the taxpayer must pay the money back.
Conservative media figures are painting a new White House push on affordable housing with the same dishonest brush they used to shift blame away from Wall Street for the housing bubble that precipitated the 2007-08 financial crisis.
On the April 3 edition of Fox News' America's Newsroom, Fox Business host Stuart Varney said that "lowering standards for who can borrow money to buy a home" is "what got us into trouble in the first place." The Washington Free Beacon made the same claim in an article titled "Subprime: The Sequel," and Ed Morrissey of HotAir.com claimed "the central failure in that bubble...was incentivizing increasingly risky loans with government cash and coercion."
But the housing bubble of the early 2000s was caused by private sector lending behavior, not government policy. The government-sponsored entities Fannie Mae and Freddie Mac, commonly called the GSEs, didn't lead private financial institutions into the subprime market and the complex financial instruments that made the bubble so toxic. Instead, they followed Wall Street there. As the University of North Carolina's Center for Community Capital explained, "Ultimately, profit not policy was what motivated Fannie and Freddie and loan products not borrowers were what caused their collapse."
The data support this explanation. The loans to borrowers with lower credit scores which the GSEs bought up fared much better than did similar privately-securitized loans. (Six times better, according to the Center for American Progress). A Federal Reserve report using different methodology "found no evidence" that government policies designed to encourage lending to lower-income borrowers had contributed to the subprime bubble. The Financial Crisis Inquiry Commission's final report examined and thoroughly debunked the contrary argument, primarily made by the American Enterprise Institute's Ed Pinto:
In direct contrast to Pinto's claim, GSE mortgages with some riskier characteristics such as high loan-to-value ratios are not at all equivalent to those mortgages in securitizations labeled subprime and Alt-A by issuers. The performance data assembled and analyzed by the FCIC show that non-GSE securitized loans experienced much higher rates of delinquency than did the GSE loans with similar characteristics.
Morrissey's post labels Pinto, former executive at Fannie Mae, a kind of soothsayer "who originally pointed out the failure at [the Federal Housing Administration]." But beyond the wonks who've debunked Pinto's claims, financial experts and journalists like Bailout Nation author Barry Ritholtz, The New York Times' Joe Nocera, and Bloomberg's David Lynch have shown him to be a primary driver of the false blame-the-government narrative of the crisis five years ago that conservative media are applying to housing policy developments in 2013.
An April 2 Washington Post article on the White House's efforts to broaden the reach of the current housing market resurgence notes that the recent improvement in the market "has been delivering most of the benefits to established homeowners with high credit scores or to investors who have been behind a significant number of new purchases." Housing officials, however, argue that a housing recovery that is limited to near-riskless buyers is constraining the broader economic recovery. According to the piece:
From 2007 through 2012, new-home purchases fell 30 percent for people with credit scores above 780 (out of 800), according to Federal Reserve Governor Elizabeth Duke. But they declined 90 percent for people with scores between 680 and 620 -- historically a respectable range for a credit score.
"If the only people who can get a loan have near-perfect credit and are putting down 25 percent, you're leaving out of the market an entire population of creditworthy folks, which constrains demand and slows the recovery," said Jim Parrott, who until January was the senior adviser on housing for the White House's National Economic Council.
"I think the ability of newly formed households, which are more likely to have lower incomes or weaker credit scores, to access the mortgage market will make a big difference in the shape of the recovery," Duke said last month. "Economic improvement will cause household formation to increase, but if credit is hard to get, these will be rental rather than owner-occupied households."
Yet conservative ideologues in the media appear eager to cast any attempt to expand the list of winners in the housing market's comeback as a doomed repetition of an invented history of a crisis that was actually caused by widespread private-sector fraud, greed, and collusion.
Echoing a conspiracy theory pushed by conservative website The Daily Caller, Fox News tried to link President Obama to a Google doodle highlighting the birthday of labor leader and civil rights activist Cesar Chávez.
In a segment on the April 1 edition of America's Newsroom, host Bill Hemmer discussed Google's decision to feature an illustration of Chávez on its homepage on Easter Sunday -- March 31 is also Chávez's birthday -- with his guest, David Drucker of Roll Call. Drucker thought the move was "an obvious mistake," and Hemmer bizarrely insinuated that Obama was somehow linked to Google's choice:
HEMMER: Eric Schmidt, who runs Google, was an informal adviser for President Obama. In 2011, the president said, "Make this day, 3/31, make it Cesar Chávez Day." Well, this year the calendar also fell on Easter Sunday. And that's why you had people lighting up the internet saying that they are on their way to Bing as their search engine of choice. Now the theorists would say there is a definite connection here. Do you buy it?
Conservative media are again using a European financial crisis to stoke fears about the U.S. economy.
According to many right-wing media figures, the Cypriot government's plan to tax private bank accounts to avert a fiscal disaster provides a dire warning for the U.S. Many have speculated or outright claimed that the same could happen here unless the so-called "debt crisis" is averted
Of course, fears of heavy taxation on private bank accounts occurring in the U.S. are largely unfounded, with many experts noting the comparison between the two countries is ill-conceived. But the facts rarely matter for right-wing media when it comes to exploiting a European crisis.
Fox's Alisyn Camerota and Charles Payne attacked paid sick day laws as job-killing "entitlements" but ignored studies indicating such laws protect vulnerable workers while having little or no negative impact on businesses.
On the March 29 broadcast of America's Newsroom, the two criticized a paid sick leave law poised to pass New York's City Council. The law would require companies with at least 15 employees to give full-time and some part-time workers five paid sick days per year, which advocates say would provide paid sick days for one million New Yorkers who don't currently have them.
Camerota opened the segment by saying the law means that "business owners are taking it on the chin here in New York City," and later hyped Mayor Michael Bloomberg's concerns that the law "could crush New York's fragile economy right now." Payne agreed and said Bloomberg is "absolutely right," adding, "We're talking about very thin [profit] margins, and if you have this many sick days and people simply take them, when things get tough, there won't be jobs for those same people. ... The smaller businesses cannot afford it."
Camerota noted that paid sick day laws are becoming a trend nationwide, but failed to inform her viewers that in at least one city, the law has been a success. A paid sick leave law passed in San Francisco has benefited workers and has not harmed businesses there.
Fox Business commentator Charles Payne criticized programs providing food and other assistance to low-income families, bizarrely claiming the social safety net keeps people mired in poverty despite overwhelming evidence to the contrary.
In an America's Newsroom segment, guest host Alisyn Camerota said that enrollment in the Supplemental Nutrition Assistance Program (SNAP), the federal food stamp program, has increased 70 percent since 2008 and asked Payne, her guest, "Is this all just a by-product of this slow recovery?"
Payne agreed that the slow recovery is "a large part" of the cause, but went on to claim that food stamps, as well as other public benefits, actually prevent poor and middle-class Americans from improving their economic status:
PAYNE: For instance, if you're making, in California, $44,000 a year and your boss offers you a raise to 50,000, you would probably say, "No thanks. Cause I don't want to lose out on things like food stamp benefits, local benefits, my child care tax credit, my earned income tax credit."
In other words, you know, we're a very generous society. But what we've actually ended up doing is creating a wall, a giant barrier for people to move out of poverty into the middle class because that initial transition, they actually lose money and lose benefits.
Payne is wrong (even setting aside the fact that a Californian family earning $44,000 would almost never qualify for food stamps). Social safety net programs are not "a giant barrier" for people seeking to escape poverty: they keep millions of Americans out of poverty every year.
From the March 28 edition of Fox News' America's Newsroom:
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Fox News gave credence to debunked conspiracy theories surrounding the United Nations Arms Trade Treaty, presenting outlandish fears about the treaty's potential effects on domestic gun policy as legitimate reason to oppose it.
Members of the United Nations are meeting this week to negotiate an international arms trade treaty, which would regulate the transnational transfer of weapons in an attempt to keep weapons from human rights abusers and war criminals.
America's Newsroom highlighted arguments for and against the U.S. joining the U.N. treaty, laying out how "critics" in the U.S. "fear that this new treaty will create international gun control, and that it will restrict American gun rights." Fox correspondent Eric Shawn uncritically explained how specific provisions in the treaty have caused some to fear it could create a gun registry and infringe upon the 2nd Amendment.
Fox then aired comments by an unidentified man furthering these conspiracies: "The treaty isn't clearly limited to the international arms trade. There are points in the draft treaty where it seems like it could apply to domestic arms sales and transfers inside the United States." Shawn noted how the National Rifle Association (NRA) also "strongly opposes" the treaty, believing it will restrict Americans' gun rights.
Rather than report on the merits of these conspiracy theories, Shawn explained that supporters of the treaty disagree with the NRA and argue the treaty is needed for various human rights reasons.
The treaty's actual language clearly explains that it does not dictate or impact nations' domestic affairs. The treaty's draft preamble says that a State party to this treaty "reaffirm[s] the sovereign right of any State to regulate and control conventional arms exclusively within its territory, pursuant to its own legal or constitutional systems."
Fox News contributor Charles Payne falsely claimed that the Cyprus banking crisis could happen in the U.S., describing the Cypriot financial situation as the natural "end game" for all nations in debt and in need of a bailout. The realities of the U.S. economy, however, delegitimize Payne's comparison.
On Monday, the European Central Bank (ECB) approved a bailout for the island nation of Cyprus, with the caveat that roughly six billion euros of the total 16 billion euros in requested funds be financed through a tax on savings deposits at Cypriot banks. Lawmakers did not approve the controversial measure, but are facing pressure from the ECB to reach a deal by Monday or risk a cutoff of financing for Cypriot banks.
Earlier this week, the island nation of Cyprus considered bailing out its indebted banks with the help of a onetime tax on all deposits. Lawmakers did not approve the controversial measure, but are facing pressure from the European Central Bank to reach a deal this week or risk a cutoff of financing for Cypriot banks.
On the March 22 edition of Fox's America's Newsroom, contributor Charles Payne discussed the Cypriot debt crisis, falsely claiming that, "Constitutionally, you definitely could see it happen here." Payne concluded the segment by warning that Cyprus is a "cautionary tale," which proves that "when a country gets its back against the wall to a certain degree, anything can happen, and ultimately, even the biggest empires in the world, including America now, aren't immune from that."
But Payne's fear mongering ignores significant differences between the banking and deposit insurance systems in Cyprus and the U.S., realities even Fox Business host Stuart Varney has reluctantly acknowledged.
CNBC reported that unlike Cyprus and other European nations that have borrowed in a currency controlled by the ECB, "the U.S. is the issuer of the currency in which its debt is denominated." Because Cyprus cannot issue currency to pay off its debt, it must accept the conditions imposed by the ECB. However, as economist Paul Krugman noted when commenting on right-wing comparisons of the U.S. to Greece, the U.S "literally can't run out of money. After all, it can print the stuff. So there's almost no risk that America will default on its debt." The very structure of the U.S. economy precludes it from needing to accept draconian measures imposed by a central bank outside the U.S.
CNBC also illustrated a fundamental difference between the Cypriot and U.S. economies, citing former president of the Dallas Fed Bob McTeer:
There are other fundamental differences between the U.S. and Cyprus. For one, the U.S. does substantial financing through its capital markets and is not as reliant on banking. "In the U.S. the dog is the economy and the banking system is the tail," McTeer said. "In Cyprus it's the other way around apparently. The banking system was bloated relative to their overall economy."
Since the bloated banking system in Cyprus is what ultimately caused the need for a bailout from the ECB, using the Cypriot crisis to stoke fears about government seizure of private funds in the U.S. further misses the mark.
Another key distinction of the U.S. system is the Federal Deposit Insurance Corporation (FDIC), which according to CNBC "has never lost money backing deposits. Although the banks had to borrow money, the banks are better capitalized than they were before the crisis."
Even Fox's Stuart Varney has backed away from claims that the U.S. government could follow Cyprus and seize private bank accounts. On the March 18 edition of Fox's America's Newsroom, Varney suggested that U.S. citizens had reason to fear for their bank accounts, saying, "Who's next? Which other governments which have run up enormous debt will also go towards begin seizing private bank accounts? Who else is next? Maybe Spain? Maybe Italy? How about America?" However, Varney negated his own argument on The Sean Hannity Show the following day, saying that a run on the banks is "possible in Europe, but I doubt it in America [...] your money in a bank account, you think it's safe, I believe it is safe in America, but elsewhere in the world, it's clearly not."
Fox Business host Stuart Varney selectively cited a Wall Street Journal article to fearmonger over President Obama's health care law, ignoring that potential increases would impact only a small part of the insured population and would be partially offset by federal tax subsidies.
On America's Newsroom, Varney, citing a Wall Street Journal article, claimed that millions of people "will be paying a whole lot more for their individual coverage after Obamacare takes full effect next year. In some cases, the premiums that they will pay will double."
But Varney ignored several key facts from the WSJ article to stoke fears about costs under the health care law.
The Journal reported that tax subsidies "will limit many consumers' costs" and that "[m]ore than half of the 35 million people expected to be in the individual market by 2016 are likely to qualify for credits." The Journal also noted that some individuals and small businesses will actually see their premiums decrease and that the nonpartisan Congressional Budget Office "says average individual premiums, on an apples-to-apples basis, would be lower."
Moreover, an Associated Press report found that potential increases in health care premiums would impact "a relatively small slice of the insured population" and that the law "is expected to tame health care costs for many." The AP also found that tax credits will offset some of the premium increases:
There also will be tax credits, or subsidies, given to people with incomes that fall within 400 percent of the federal poverty level. For 2013, 400 percent of the poverty level for all states except Alaska and Hawaii would be $94,200. These credits won't lower premiums, but they can ease the insurance bill depending on a person's income.
The credits should help the 20-something customers that insurers warn will see big premium hikes, said Linda Blumberg, an economist with the Health Policy Center of the Urban Institute, a nonpartisan policy research organization.
"While these folks are potentially facing some premium increases due to all these reforms, they also are the ones most likely to get the financial help from the exchanges," she said.
On March 13, Fox & Friends also misled on premium costs under the health care law when co-host Alisyn Camerota claimed, "Your premiums are going to double and that your bills could double, this is really stunning news for lots of Americans."
From the March 22 edition of Fox News' America's Newsroom:
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Fox News host Oliver North revived the discredited claim that Iraq possessed weapons of mass destruction to justify the American-led invasion of that country 10 years ago.
During an America's Newsroom segment on the 10-year anniversary of the Iraq war, North explained why he thought the war was "worth it," saying: "We got rid of a brutal despot who used chemical and biological weapons against his own people. Weapons of mass destruction that he probably exported to Sudan before we got there."
The claim that Iraq possessed WMD at the time of the invasion has been long debunked.
In 2004, the CIA's Iraq Survey Group (ISG) released a report that found that Iraq "ended the nuclear program in 1991 following the Gulf war. ISG found no evidence to suggest concerted efforts to restart the program." The report further stated, "While a small number of old, abandoned chemical munitions have been discovered, ISG judges that Iraq unilaterally destroyed its undeclared chemical weapons stockpile in 1991."
ISG also concluded that after 1995, Iraq "abandoned its existing [biological warfare] program in the belief that it constituted a potential embarrassment, whose discovery would undercut Baghdad's ability to reach its overarching goal of obtaining relief from UN sanctions." The report stated that Iraq appeared to have destroyed its undeclared stocks of biological warfare-related weapons in 1991 and 1992.
As for North's claim that WMD were transferred out of Iraq, intelligence officials have said they found no evidence that weapons or related equipment were moved. From the Associated Press:
[I]ntelligence and congressional officials say they have not seen any information -- never "a piece," said one -- indicating that WMD or significant amounts of components and equipment were transferred from Iraq to neighboring Syria, Jordan or elsewhere.
Last week, a congressional official, speaking on condition of anonymity, said suggestions that weapons or components were sent from Iraq were based on speculation stemming from uncorroborated information.
Fox News reporter Kelly Wright used a partial quote from Rep. Paul Ryan (R-WI) to paper over Ryan's acknowledgment that debt levels are stable for the near term, misrepresenting the debt conflict between President Obama and House Republicans.
On the March 17 edition of CBS News' Face the Nation, host Bob Schieffer asked Ryan about an interview Obama had previously given to ABC News, in which he observed that "we don't have an immediate crisis in terms of debt." Ryan conceded to Schieffer that "we don't have a debt crisis right now," going on to explain that Republicans differ with the president on how to handle the prospective crisis. From the March 17 edition of Face the Nation:
RYAN: To borrow a phrase from my friend Erskine Bowles and the fiscal commission, we're the healthiest looking horse in the glue factory. That means America is still a step ahead of the European nations who are confronting a debt crisis of Japan that's in its second lost decade. It's partly because of our resilient economy, our world currency status. So we do not have a debt crisis right now, but we see it coming, we know it's irrefutably happening. And the point we're trying to make in our budget is let's get ahead of this problem. Look we know that in a debt crisis you pull the rug out from under people living on the safety net, you cut seniors in retirement. This is what we're trying to avoid. The purpose of having a reasonable balanced budget like we're proposing is let's prevent a debt crisis from happening in the first place. If we keep kicking the can down the road, if we follow the president's lead or if we pass the Senate budget, then we will have a debt crisis. Then everybody gets hurt. You know who gets hurt first and the worst in a debt crisis? The poor and the elderly. That's what we're trying to prevent from happening. Pro-growth economic policies to get people working, to bring in more revenue, and get the entitlement system under control so it doesn't go bankrupt so people can seriously plan for the promises that government has made for them in retirement. That's what we're saying, is, let's prevent a debt crisis from happening, we know it's coming, this budget does that.
In the lead segment of the March 18 edition of Fox News' America's Newsroom, however, Wright excised Ryan's agreement with the president. After stating that despite Obama's "charm offensive," Republicans "remain skeptical about the president's sincerity," Wright offered a misleading paraphrase of Ryan's comments that implied that Obama's 'no immediate crisis' observation was a stumbling block in negotiations, rather than a point of common ground.
WRIGHT: But some Republicans remain skeptical about the president's sincerity. Congressman Paul Ryan, who we just heard from, expressed doubts after the president's recent comment that America is not in an immediate debt crisis. Ryan contends that America is teetering on the edge of a crisis, and that it will have serious repercussions.
[RYAN CLIP:] You know who gets hurt first and the worst in a debt crisis? The poor and the elderly. That's what we're trying to prevent from happening. Pro-growth economic policies to get people working, to bring in more revenue, and get the entitlement system under control so it doesn't go bankrupt so people can seriously plan for the promises that government has made for them in retirement. That's what we're saying, is, let's prevent a debt crisis from happening, we know it's coming, this budget does that.
This heavy truncation of Ryan's quote suggests disagreement where there is none: Both Ryan and House Speaker John Boehner (R-OH) agreed with the president's assessment that any crisis is not immediate. That's because debt levels are stable in the near term, a fact straight from the Congressional Budget Office. The White House and the congressional GOP dispute the proper policy response to these non-immediate, middle-distance fiscal issues, but the president's "immediate crisis" comments are not controversial.
President Obama and congressional Republicans agree about the importance of debt reduction, but dispute the timeline and architecture of that reduction. Ryan's belief that America is merely "the healthiest horse in the glue factory" may be misguided, but it is much more informative for fiscal debate watchers than Fox's focus on a ginned-up disagreement that Ryan and Boehner have already rejected.
Emails obtained through a Freedom of Information Act request reveal no evidence of the Environmental Protection Agency's so-called "war on coal," denying the conservative media ammunition against Gina McCarthy, President Obama's nominee to lead the agency. But Fox News is now using the lack of evidence to attack McCarthy, suggesting the administration is engaging in a cover-up to protect her.
Chris Horner of the fossil fuel-funded Competitive Enterprise Institute (CEI) released more internal EPA emails this week as part of his ongoing effort to uncover the agency's crusade against coal. Instead, he found correspondence on the subject to be "remarkably absent," leading him to wonder: isn't it a little suspicious that the emails didn't uncover anything suspicious?
Remarkably absent are what should be the dominant class of records covered by our request seeking records: Gina McCarthy discussing her biggest assignment, the Obama administration's "war on coal".
The question is no longer whether they are hiding things, it's what are they hiding now. And the answer apparently is: Whatever they have to hide to protect Ms. McCarthy's nomination.
Fox News seized on CEI's report to claim that McCarthy is "under fire for a batch of internal emails just out," only to later admit that she is almost entirely absent from the emails: