Each year the Business & Media Institute looks back on the year's news and selects the top 10 worst economic myths. Here is our 2009 list:
10. CBS, NY Times Support Ecuadorian Shakedown of U.S. oil company
9. Media Fail to Scrutinize Obama’s Job Claims
8. Government Stimulus is the Answer to Our Economic Problems
7. No Tax Increases for the Middle Class
6. The Recession was Over … by July.
5. Cash for Clunkers was a ‘Success’
4. Reagan vs. Obama on Jobs: Same Rate, Different Story
3. Health Care Reform will be ‘Deficit Neutral’
2. Tea Parties aren’t made up of grassroots protestors; they’re just ‘Astroturf.’
1. ClimateGate
10. CBS, NY Times Support Ecuadorian Shakedown of U.S. oil company.
Media myth: Chevron is responsible for abandoned oil wells across Ecuador.
A South American country is trying to squeeze $27 billion out of Chevron for environmental cleanup from discarded oil wells – all with the help of the U.S. news media.
CBS “60 Minutes” and The New York Times took the side of “eco-radicals” at the Amazon Defense Coalition who have filed suit against Chevron, even though the government of Ecuador signed off on the company’s cleanup actions more than 10 years ago.
It all began when Texaco Petroleum drilled for oil in Ecuador decades ago as the smaller part of a consortium with the state-run PetroEcuador. Oil is a messy business and when TexPet was ready to leave the country, it worked out a cleanup deal. TexPet spent $40 million cleaning up 40 percent of the sites – equal to its share of the consortium. It did a thorough job with the clean-up and the government of Ecuador signed a paper absolving TexPet of all obligations.
Since Chevron now owns Texaco, the environmental litigators have come after the company claiming that the oil wells have polluted the ground water and made people sick.
Scott Pelley’s May 3 CBS report included six anti-Chevron voices versus just one spokeswoman for the company. It also ignored the corruption of the Ecuadorian courts. Pelley also used deceptive video footage – showing not the TexPet sites in question, but the government-run oil pits PetroEcuador is responsible for.
That’s in part because PetroEcuador has a horrendous environmental record with more than 1,000 oil spills since 2000. In 2006, BusinessWeek said the company had “suffered an oil spill every two days this year.”
The Times also stirred up hostility toward Chevron on May 15 saying, “Texaco’s roughnecks are long gone, but black gunk from the pits seeps to the topsoil here and in dozens of other spots in Ecuador’s northeastern jungle. These days the only Chevron employees who visit the former oil fields, in a region where resentment against the company runs high, do so escorted by bodyguards toting guns.”
9. Media Ignore Failure of Stimulus Package to Stop Job Loss
Media myth: Obama administration claimed spending would keep unemployment from rising about 8 percent, but as losses climbed news outlets spun the numbers.
“For every day we wait or point fingers or drag our feet, more Americans will lose their jobs,” Obama said on Jan. 8 at a speech in Fairfax, Va. At that time the unemployment rate was 7.2 percent.
Obama also claimed that the country would face double-digit unemployment without the stimulus package while the Congressional Budget Office forecast was slightly lower: 9 percent unemployment by 2010.
To boost support for his stimulus, Obama’s economic team released a report that estimated unemployment wouldn’t rise above 8 percent with a stimulus package, according to Associated Press. Even without a stimulus, Obama’s team echoed the CBO claim that the economy would shed 3-4 million more jobs, reaching 9 percent unemployment by 2010.
By April 2009, the claim was null and void as unemployment soared to 8.9 percent (it would later climb as high as 10.2 percent). But rather than report those failed jobs numbers the media found the “silver lining.”
On June 1, The Washington Post spun the projected loss of a half million jobs, saying, “Economists forecast that employers will have shed another 530,000 jobs and that the jobless rate will rise to 9.2 percent [in May], from 8.9 percent. Although those numbers are steep, they would provide ammunition for the glimmers-of-hope crowd.”
Similarly, when April data was released the first week of May, The New York Times, Washington Post, CBS “Early Show,” and NBC “Today Show” found the good news in the bad – the exact opposite of how they treated economic news under Bush.
None of those reports mentioned that Obama’s stimulus package was supposed to prevent unemployment from rising so high.
Many in the media also accepted the administration’s claim that the stimulus would “create or save” 3 million new jobs – the phrase “create or save” became an easy out as unemployment skyrocketed to 10.2 percent in October. A convenient line for the White House since it cannot be proven or disproved.
Yet, journalists reported the claims uncritically, like Charles Gibson did on May 11 and 13, saying the stimulus would “save or create one-and-a-half million jobs this year.”
But as James Sherk explained for the Heritage Foundation, “it is impossible to hold the President accountable to these promises because there is no way of measuring ‘jobs saved’.”
8. Stimulus is the answer.
Media myth: $787 billion stimulus needed to fix the economy.
Stimulus wasn’t just supposed to create jobs. It was the jolt of cash the economy needed to get going – at least, that was the broken-record claim from the liberal news media. From auto bailouts, to the stimulus package, to cash for clunkers, to calls by some for a second stimulus; journalists had trouble finding a downside to the government’s massive spending spree financed by taxpayers’ dollars and debt.
Two broadcast networks – ABC and NBC – showed particularly strong support for the president by relying on pro-stimulus voices by a more-than 2-to-1 ratio (139 to 56). As reporter Scott Cohn told the NBC “Nightly News” audience about a struggling Indiana community. “Economic stimulus isn’t just a political debate around here. It could be a matter of survival.”
Never mind the cost to the great-grandchildren of current taxpayers, the networks didn’t even bother to ask how Obama and Congress would pay for the roughly $800 billion package.
Reporters like ABC’s Dan Harris turned to experts like Mark Zandi in stimulus reports. Zandi declared “we have no choice,” and then backed them up saying, “Most economists agree, we have no choice.”
The news media also perpetuated the myth that the $787 billion package would be spent on infrastructure. CBS’s Chip Reid said on Jan. 12, “The total size of the plan is about $750 to $800 billion – roughly $300 billion is for tax cuts for businesses and individuals. The rest will be spent on everything from roads and bridges to renewable energy to create three to 4 million jobs. Republicans are raising red flags about the amount of spending.”
But in reality, little more than 3 percent of the funds would be allocated to road and bridge construction.
Months later, the media were still giving Obama credit for the stimulus program. Michelle Gielan of CBS “Morning News” said on Oct. 16, “there is new evidence this morning that President Obama’s stimulus program is working. Federal contractors say it helped to create – to create or save 30,000 jobs, mainly in construction.”
7. Media Ignore Violation of Obama’s Middle Class Tax Pledge
Media myth: Despite spending. President has stuck by his pledge to slash taxes for middle-income families.
If you’re a member of the middle class you probably have no trouble remembering that Obama promised he wouldn’t raise your taxes. After all, he made a “firm pledge” on the campaign trail not to hike taxes on any family “making less than $250,000 a year.”
But by endorsing the House health care reform bill, Obama sought to violate that promise. The bill contains several provisions which would increase taxes on such families.
According to conservative tax policy group Americans for Tax Reform (ATR), the House bill (H.R. 3962) is “loaded with tax hikes on families making less than $250,000 per year,” including the individual mandate excise tax, employer mandate payroll tax, and tax increases on health savings accounts. On its Web site, ATR explained 6 specific provisions that would result in higher taxes for the middle class.
The Associated Press thought that was a story, reporting it on Nov. 2 and explaining that the individual insurance mandate would “impose new taxes on people who don’t buy qualified health insurance, including those making less than $250,000 a year.”
Yet not a single network report between Nov. 6 and 9 called Obama out for breaking his pledge to the middle class. In fact, out of 38 health care stories or briefs on the three networks only 29 percent (11 stories) even mentioned taxes related to the health care bill.
6. Newsweek and Others Race to Proclaim Recession Over
Media myth: The recession is already over and we’re on the road to economic recovery thanks to the stimulus package.
You know the news media has gone too far when even President Obama is surprised by their glowing economic reports.
That’s exactly what happened in July when Newsweek magazine released its Aug. 3 issue declaring “The Recession is Over!*” with the subhead “Good luck surviving the recovery.”
Obama called it “a little startling,” but took credit for stopping “the free-fall.” Newsweek was the first to declare the recession over, but ABC and CBS were also asking economic experts the same question.
On “Good Morning America,” July 28 two guests, Liz Ann Sonders of Charles Schwab and Mike Santoli of Barron’s, supported the claim that the recession is in fact over.
Sonders told Diane Sawyer, “I do think it is real, I think that we have enough cumulative signs now that we’ve come through the worst. And not only are things just less bad, we’re actually starting to see some pockets of improvement.” Sawyer accepted Sonders’ and Santoli’s opinions without rebuttal.
Other experts, including left-wing economist Dean Baker thought the claims were premature. Baker wrote on Politico’s Arena that “only economists and Washington pundits are going to be blathering about a recovery.”
“The rest of the country is going to see an unemployment rate that crosses 10 percent this summer and likely crosses 11.0 percent early next year. They are also going to see a foreclosure rate that runs at a 2 million annual rate through the rest of 2009 and 2010. To anyone other than the tiny group of wonks that monitor economic data closely, the fact that GDP might be growing slowly doesn't mean a damn thing,” Baker wrote. “The rest of the country cares about whether they have a job and whether they can hold onto their home. So the GOP just has to sit back and make fun of any ‘elitist’ Democratic politician who is stupid enough to boast about an economic recovery.”
5. Media Praise Clunker Program: ‘Too Successful’
Media myth: A government program that burns through its 14-week budget in one week will stimulate the economy.
The networks loved “stimulus” in 2009 and the government’s clunker of an idea to give away free money to car buyers was no exception.
ABC, CBS and NBC heaped praise on the Cash for Clunkers rebate program that offered vouchers of up to $4,500 to new car buyers if their trade-ins qualified for the program and they bought the government-approved fuel-efficient vehicles.
That list of approved vehicles included the 2009 Hummer H3T, according to Edmunds.com.
Despite the poor budgeting of the program and massive bureaucracy surrounding each purchase the networks insisted that it was a “victim of its own success.” CBS “Evening News” anchor Katie Couric teased on Aug. 3, “[S]ales reports out today show the Cash for Clunkers program gave U.S. automakers a much-needed jumpstart.”
Jim Cramer called the potential $2 billion extension for the program, “money well-spent,” on NBC’s “Today.” The experts brought on by the networks also favored the program. Proponents outnumbered critics nearly three times as often, in the 37 network stories between July 4 and Aug. 3.
Though the program was touted as “great for the auto industry” and the environment, the Washington Post concluded that the program was not “necessarily a boon to the environment.”
Jeremy Anwyl, CEO of Edmunds.com (a car buying Web site), said “it’s not clear that cash for clunkers actually increased sales.” Later analysis from Edmunds found that the government didn’t get much bang for the taxpayer buck either – shelling out $24,000 per car once you subtract cars that would have been sold without the program.
On Dec. 8, President Obama announced plans for a similar rebate program for home weatherization, nicknamed “cash for caulkers” the same day he proposed spending $50 billion more on stimulus for infrastructure projects.
4. Same Unemployment Rate: ‘Good News’ for Obama, ‘All’ Bad for Reagan
Media myth: There are plenty of ‘glimmers of hope’ in 2009, despite unemployment rising to highs not seen since 1982.
This year the network news media provided a stunning example of the way they selectively report economic data depending on which political party is in office. Under Obama, the networks consistently found “hopeful” signs about the economy despite nearly 10 percent unemployment.
A look back at the last time unemployment was so high, in 1982 under President Ronald Reagan, and the networks were not so generous. In fact, reporters in 1982 focused on places where “desperation had turned to hopelessness.”
The unemployment rate reached 9.4 percent under Reagan and under Obama (twice), but received completely different treatment from the networks – and in one case from the same reporter.
Charles Gibson illustrated how dramatically different the network coverage of Reagan and Obama really were.
Gibson, who was a Capitol Hill correspondent for ABC in 1982, told viewers May 7, 1982, “[T]here really isn’t any good news in the statistics. All the numbers are bad.” He then quoted two Democratic attacks on Reagan including Rep. Henry S. Reuss, D-Wis., who charged that Reagan’s “policies aren’t just mistaken, they’re wicked.”
But as an ABC anchor in 2009, Gibson was full of hope. He introduced that night’s story saying “sometimes a bad jobs report can look good.”
“345,000 Americans lost their jobs in May, a big number to be sure. Traumatic if you are one of the 345,000. But the number was smaller than economists had predicted, and that’s good news,” Gibson said before admitting that the unemployment rate of 9.4 percent was “pretty bad.” Neither Gibson, nor reporter Betsy Stark mentioned President Obama at all that night.
On Aug. 7, 2009, Gibson suggested “the economy may be finally turning the corner.”
BMI found that network reports were 13 times more negative in their treatment of Reagan than Obama. In fact, 91 percent of stories (20 out of 22) mentioning Reagan’s administration portrayed it negatively – while only 7 percent (1 out of 15) of Obama administration mentions were negative. Obama was mentioned positively 87 percent of the time (13 out of 15). There was not a single positive mention of the Reagan White House.
3. Media Swallow Obama Claim that Health Care will be ‘Deficit Neutral’
Media myth: The networks spent most of the year cheering for government-run health care solutions, all while ignoring the trillion-dollar price tag.
President Obama insisted that any health care reform bill that passes must be deficit-neutral. That’s what he told ABC’s Jake Tapper on Nov. 9.
“I have actually said that it is important for us to make sure this thing is deficit neutral without tricks. I said I wouldn’t sign a bill that didn’t meet that criteria,” Obama said.
Just 3 days earlier, Obama officially endorsed H.R. 3962, the House health care bill which the Congressional Budget Office (CBO) says will NOT be deficit neutral. As Reason.com reported on Nov. 20, CBO said that if you count both that bill and a separate provision to fix Medicare reimbursement rates the budget deficit would rise by $89 billion between 2010 and 2019.
“The agency estimates that the two bills together would increase the budget deficit in 2019 by $23 billion relative to current law, an increment that would grow in subsequent years,” Reason explained.
In some cases, network reporters uncritically repeated Obama’s claims about the impact of health care reform on the deficit like ABC’s Chris Cuomo did Dec. 7. Cuomo told “Good Morning America” viewers, “The President made a rare visit to Capitol Hill Sunday to rally senators, saying the health care reform bill would reduce the deficit more than anything Congress has done since the Clinton years.” Cuomo then went on to other news.
NBC’s David Gregory mentioned concerns about the health care reform package’s “impact” on the deficit during the “Today” show Dec. 6, but without mentioning any cost estimate whatsoever.
For much of the year the networks ignored the “exorbitant” cost of health care reform proposals – citing estimates of $1 trillion or more in only 9 percent of stories between Inauguration Day and Obama’s primetime town hall meeting on health care (June 24, 2009). Despite the Congressional Budget Office’s (CBO) estimate that one Senate proposal would cost $1.6 trillion.
2. Media Dismiss, Disparage and Attack Tax Day Revolution
Media myth: Tea Parties aren’t made up of grassroots protestors; they’re just ‘Astroturf.’
2009 was the year many ordinary Americans said “Enough, is enough” when it came to government bailouts and spending. CNBC’s Rick Santelli called for a tea party in a rant Feb. 19.
Thousands responded, rallying at hundreds of events around the country to protest on April 15 (and on a few later dates). But leading up to that day the networks were nearly silent, with only three passing mentions of the tea parties.
CNN didn’t cover the tea parties ahead of time, waiting until April 15 to report them at all. But CNN’s Susan Roesgen became the story that day after showing contempt for Chicago protesters.
Roesgen rudely interrupted one of the protestors and slammed the event for being “anti-government,” “anti-CNN,” and “not really family viewing.”
After arguing with one man at the protest, Roesgen said, “you get the general tenor of this,” tea party. “Anti-government, anti-CNN since this is highly promoted by the right-wing conservative network Fox and since I can’t really hear much more and I think this is not really family viewing. Toss it back to you Kyra,” Roesgen concluded.
MSNBC took a different tack than the networks’ silence – using the crude sexual term “teabagging” or “teabaggers” to label and mock protesters. On April 9, host Rachel Maddow and guest Ana Marie Cox, and Air America radio contributor, used the word “teabag” at least 51 times in a 13-minutes segment.
But it wasn’t the only word used to attack tea party attendees. MSNBC also condemned the events as “Astroturf,” or fake-grassroots. Liberal columnist Paul Krugman made the same claim in a New York Times column.
Krugman tied the tea party events directly to the GOP in his April 13 column “Tea Parties Forever.” In that column, he questioned the motivation and sincerity of protestors saying, “it turns out that the tea parties don’t represent a spontaneous outpouring of public sentiment. They’re AstroTurf (fake grass roots) events, manufactured by the usual suspects.”
MSNBC explained the turnout of protests by calling them “Astroturf” and claiming that they had been orchestrated by Fox News.
1. ClimateGate: It isn’t news if we ignore it.
Media myth: Global warming science is ‘solid,’ despite scandalous e-mails suggesting alarmists might have been ‘manipulating’ data and preventing skeptics from being published.
In 2009, the news media ignored plenty of worthy stories, but none as big as the global warming scandal that broke just before Thanksgiving on Nov. 20. That was when word got around thanks to the Internet, Fox News and talk radio that leaked e-mails suggested unethical and possibly illegal behavior on the part of climate scientists.
ClimateGate began after someone (hacker or whistleblower) attacked servers of University of East Anglia's Climate Research Unit (CRU) and made thousands of e-mails and documents public. Those e-mails appear to show a conspiracy to falsify temperature data, a willingness to destroy information rather than release it under Freedom of Information (FOI) law and the intimidation of publications willing to publish skeptical articles.
Here are just two of the most disturbing messages:
From Phil Jones, CRU director, to climatologist Michael Mann and two others:
“I’ve just completed Mike’s Nature trick of adding in the real temps to each series for the last 20 years (ie from 1981 onwards) amd [Sic] from 1961 for Keith’s to hide the decline.”
Jones to Mann Feb. 2, 2005:
“The two MMs have been after the CRU station data for years. If they ever hear there is a Freedom of Information Act now in the UK, I think I’ll delete the file rather than send to anyone. Does your similar act in the US force you to respond to enquiries within 20 days? – our does ! The UK works on precedents, so the first request will test it. We also have a data protection act, which I will hide behind.”
The publication of those messages has led to the temporary resignation of Jones and an investigation of Mann by Penn State University, yet ABC, CBS and NBC morning shows refused to cover the ClimateGate scandal for 13 days. It wasn’t until Dec. 4-6 that the network news programs finally mentioned the controversy. A mere four stories mentioned ClimateGate, Tiger Woods’ car accident, infidelity and apology were covered more than 15 times as often (62 stories).
Most egregious was the omission of ClimateGate during the Nov. 25 evening broadcasts, the night that all three networks reported that President Obama would be attending the climate conference in Copenhagen, Denmark and would push for a pact to reduce carbon emissions.
Global warming science had been portrayed as incontrovertible by the news media which used a “peer-reviewed” stamp of approval to UN IPCC reports warning about climate change. But other leaked e-mails suggest that the very scientists criticizing skeptics for not being published in peer reviewed publications were attempting to game the system by intimidating publications willing to publish skeptical work.
