From the July 27 edition of Fox News' Cavuto on Business:
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Conservative media figures have criticized President Obama's focus on immigration reform, saying that the top priority should be the economy and jobs. In fact, immigration reform is an economic issue: studies show that it would boost economic output and lower unemployment.
From the July 13 edition of Fox News' Cavuto On Business:
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Fox News disregarded economic evidence to claim that legislation providing a living wage in Washington, D.C. would deprive the city of jobs and keep workers in poverty, and defended Walmart after the company declared it would nix plans for locating new stores in Washington should the living wage bill pass.
The Washington, D.C. City Council recently proposed and passed legislation that would require retail outlets with a parent company yielding $1 billion or more in annual revenue to pay a living wage of $12.50 per hour to workers. In a July 9 op-ed in the Washington Post, regional general manager for Walmart U.S. Alex Barron claimed that the legislation would require the company to cancel plans to build three new stores in the district and potentially jeopardize the survival of three existing locations.
On the July 10 edition of Your World, Fox Business personalities Charles Payne and Elizabeth MacDonald quickly came to Walmart's defense. MacDonald claimed, "Walmart brings economic development time and again, we've seen that, they bring other stores that create jobs in the area."
Payne responded by claiming that the City Council was doing a disservice to the poor, and that implementing the living wage legislation would deprive them of job opportunities.
MacDonald's and Payne's assertions about Walmart's positive economic influence are in direct contrast to evidence.
A study conducted by economists David Neumark, Junfu Zhang, and Stephen Cicarella directly disproves MacDonald's theory that Walmart brings new jobs to areas in which stores are located. The authors found that counties with Walmart locations witness a net reduction in retail employment:
The employment results indicate that a Wal-Mart store opening reduces county-level retail employment by about 150 workers, implying that each Wal-Mart worker replaces approximately 1.4 retail workers.
Fox's Charles Payne responded to a Media Matters inquiry about his recent paid promotions for company stocks by declining comment on all but one question. Payne, or his firm, also appears to have scrubbed a webpage on his company's website connecting him to one of the company stocks in question.
Media Matters reported earlier today that Payne, a contributor and frequent guest host for Fox News and Fox Business, was compensated to promote the now worthless stocks of three companies (Brainy Brands, NXT Nutritionals, and Generex) since joining Fox. The practice of compensated stock endorsements is currently prohibited by Fox rules, and resulted in the recent contract termination of contributor Tobin Smith.
Payne responded to a Media Matters inquiry by declining to comment except for one question. Media Matters had asked Payne:
1) How many times has Payne, or his firm, received compensation to promote the stock of a company since October 2007?
2) How much did Payne, or his firm, receive to promote Brainy Brands Company, NXT, and Generex?
3) All three companies' stock prices appear to be virtually worthless now. Do you have any comment on how these stocks have fared given Payne's forecast?
4) Can you confirm that Payne was involved in setting up the websites Afterthecrashwinners.com, Investafterthecrash.com, and Postcrashgains.com?
5) MarketWatch reported that Fox rules state "no Contributor to FBN, nor his/her firm, and/or family members are allowed to accept financial consideration of any kind whatsoever to issue research, advertisements, or to otherwise promote individual stocks or securities." Did Payne's compensation to promote the stocks of Brainy Brands, NXT, and Generex violate this policy?
6) In 1999, Payne reached a settlement with the SEC to settle a claim without confirming or denying wrongdoings. Is Fox aware of the SEC settlement?
Payne responded this afternoon: "Never heard of any of the websites your [sic] mentioned and only affiliated with www.wstreet.com. There are no other comments to you or your organization."
A webpage on Payne's Wall Street Strategies site -- housed at www.wstreet.com/brainybrands/default.asp -- previously advertised an offer for "Charles Payne's FREE 10-day Bonus Report--Spotlight on a Winner: How Brainy Brands Is Poised to Take Over the Multibillion-Dollar Early Education Industry (a $19 value)." Media Matters linked to the webpage in its original report, and the URL was functioning prior to posting. Now, however, the URL redirects to www.wstreet.com/signup/newsletter.asp, which doesn't contain any mention of Brainy Brands. The original page is still accessible via Google Cache and is screenshotted here (see a Google search for the site here). The page carried a 2011 copyright date.
Charles Payne, a contributor and frequent guest host for Fox News and Fox Business, was compensated to promote the stocks of at least three companies since joining Fox. The practice of compensated stock endorsements is currently prohibited by Fox rules, and resulted in the recent contract termination of contributor Tobin Smith.
According to a Media Matters review, Payne was paid $40,000 to promote The Brainy Brands Company, "$25,000 by a third party" to promote NXT Nutritionals Holdings, and an undisclosed amount for a "consulting arrangement" to promote Generex Biotechnology Corporate.
The share prices of the companies Payne was paid to tout are now essentially worthless.
Payne forecasted lofty gains for investors who bought those stocks. He projected in 2011 that Brainy Brands could hit $4.50 a share in three years. At the time of the pitch, Brainy Brands was trading at around $1.35 -- it's now below 1 cent. Payne claimed in 2009 that NXT could "turn $10,000 into $25,000." At the time, NXT was trading for $2.00 -- it's now below 1/10th of a cent. And Payne claimed in November 2007 that Generex, then at $1.58, was a long term "screaming buy" which could hit $7.00. It's now trading at roughly 4 cents.
Aside from rosy projections, Payne's sponsored stock pitches shared a common theme: using his cable news and Fox credentials to assure skeptical investors that his advice was trustworthy. A direct marketing company which worked with Payne stated it brandished Payne's Fox News connections "to build credibility" with his potential customers. The stock pitches were also used as a vehicle to entice readers to join Payne's subscription newsletter.
Fox policy prohibits contributors from receiving compensation to promote a stock. MarketWatch -- which, like Fox, is owned by News Corp. -- reported on June 18 that a spokesman said "no Contributor to FBN, nor his/her firm, and/or family members are allowed to accept financial consideration of any kind whatsoever to issue research, advertisements, or to otherwise promote individual stocks or securities." As a result of the rule, Fox News fired contributor Tobin Smith, who regularly releases sponsored research reports (Smith claimed his contract "did NOT include any exclusion from me or my company sponsored research").
While Fox currently prohibits financial arrangements like Payne's, it's not clear whether his actions specifically violated Fox rules. MarketWatch quoted Smith claiming that the rule was instituted in "late" 2012, or after the three Payne stock promotions studied in this report first occurred. It's also not clear if Payne has been compensated for stock promotions after 2011. Regardless, even if Payne's actions occurred before an official Fox policy, he still used Fox's brand to engage in practices that the network now thinks is problematic enough to prohibit and fire an employee.
Fox and Payne did not respond to requests for comment.
Payne and his company, Wall Street Strategies, have a problematic history related to the disclosure of paid stock endorsements. In 1999, the Securities and Exchange Commission (SEC) announced that while not "admitting or denying" wrongdoings, Payne "agreed to pay a civil penalty of $25,000." The SEC alleged of Payne:
The Complaint alleges that on at least eight occasions, Wall Street Strategies recommended that its clients purchase Members stock through recorded messages on its telephonic stock recommendation service. The Complaint also alleges that Payne failed to disclose that he received payments from Members to promote Members stock.
More about Payne's alleged actions are contained in this May 1997 SEC release.
In this report:
After months of struggling with how to report on good economic news, Fox News finally found a new strategy to attack consistently positive labor market gains: move the bar to an unreasonable height. While downplaying the May 2013 jobs report that was better than expected, Fox misleadingly cited employment growth during the Reagan administration and proposed a new standard for growth so unreasonably high that it has only been met three times in the past 30 years.
On the June 7 edition of Fox News' America's Newsroom, contributor Charles Payne downplayed the May 2013 jobs report -- a report that was better than expected -- saying, "You know, in the grand scheme of things, none of us should really like the number." He then compared the number to the September 1983 jobs report when the economy added 1.1 million jobs. Later, Payne guest hosted Fox Business' Varney & Co. where contributor Monica Crowley claimed, "At this point in the recovery, you should be generating 300 -- 500,000 jobs a month." She also brought up the September 1983 report.
PAYNE: You know what, all things considered, what you just laid out: it's better than expected. But you know, in the grand scheme of things, none of us should really like the number. It's extraordinarily mediocre with what we've gotten in the past. You know, the way we've come out of recessions in the past, we've had some amazing, robust times. I mean, going all the way back to Reagan where one month we actually had one million jobs created in a single month. For us to still be well under 200,000 is really disheartening. But you know, the good news is, a lot of people thought it could have been worse.
MACCALLUM: Wow, that's an - I just want to go back to what you just said. So during the Reagan recovery there was a single month period where we added a million jobs?
PAYNE: One single month. A million - by the way, we had a whole lot less people too.
But Payne and Crowley ignored the context of the 1983 report. While Payne portrayed it as just one example of the so-called "Reagan recovery," according to The Wall Street Journal's Market Watch blog, it was actually an outlier. Market Watch also pointed out that about 640,000 of the 1.1 million jobs can be attributed to striking AT&T employees returning to work. In reality, the average monthly job growth during the Reagan administration was 168,000.
Crowley's assertion that the economy "should be generating 300 -- 500,000 jobs a month," is also unreasonable. When Market Watch evaluated a similar claim by Gov. Mitt Romney, it found that job growth had only surpassed the 500,000 mark three times in the past 30 years. From Market Watch:
How rare is it for 500,000 jobs to be created in a month? The last time was in May 2010 -- when the U.S. hired thousands of workers to conduct the Census. (The next month, payrolls shrunk by 167,000.)
Lest Romneyites think that only President Barack Obama struggled to make that grade, neither President Bush, older or younger, saw job creation that strong. President Clinton had one-plus 500,000 month, when in September, 1997, 507,000 positions were created. (Aided by the return of striking UPS workers.) President Reagan enjoyed a spectacular 1.11 million-job month in September 1983, but that was the only plus-500K mark and was boosted by roughly 640,000 AT&T workers returning from a strike.
Payne and Crowley's claims represent a new line of attack, but this isn't the first time Fox News has reset the bar on how it characterizes economic news. As the economy has consistently improved, Fox News has repeatedly struggled to portray good news in a negative light. In some cases, it has even cut its economic coverage in half.
From the May 14 edition of Fox News' America's Newsroom:
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From the March 30 edition of Fox News' Cavuto on Business:
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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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From the March 26 edition of Fox News' Your World with Neil Cavuto:
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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."