A new study reveals how successful government safety net programs are at keeping people out of poverty, delivering an additional blow to the Fox News myth that government assistance cannot improve the lives of low-income individuals.
According to The Washington Post, researchers Christopher Wimer and Liana Fox of the Columbia Population Research Center found that from 1967 to 2012, the safety net reduced the poverty rate from 26 to 16 percent.
Official poverty measures did not take government programs used by low-income Americans into account before 2010, often giving the appearance that poverty rates have remained unchanged over the past 50 years. Wimer and Fox adjusted poverty rates going back to 1967 to take into account additional costs and the effect of safety net programs, revealing the 10-point drop in poverty. Previous research by the Center on Budget and Policy Priorities suggested that government programs reduce the official poverty rate, but Wimer and Fox found that the safety net has an even greater effect in reducing poverty.
The findings of the study reveal how crucial government anti-poverty programs are, undercutting the right-wing media myth rampant on Fox News that government programs cannot help low-income people.
Fox Business contributor Charles Payne made this point as recently as September, arguing that government assistance has been a waste because poverty numbers have not decreased since the "Great Society" in the 1960s, which implemented many anti-poverty measures.
In a discussion on The O'Reilly Factor, Fox Business' John Stossel recently railed against anti-poverty programs, claiming that government makes poverty "worse with these government programs" and that "we should get rid of most of government and allow poor people to become rich."
Indeed, the belief that government assistance cannot help low-income individuals is somewhat of a theme in the right-wing media, with figures continually questioning the efficacy of safety net programs.
The study also found that absent government safety net programs, 29 percent of Americans would be in poverty today -- an increase since 1967. These findings show that while the economy has grown tremendously in the past few decades, the gains have not reached those at the bottom.
The study reinforces previous research about the nature of growing income inequality in America. However, it is unlikely that voices in right-wing media will take notice of the findings as a problem, especially considering previous calls to reduce inequality have been met with staunch opposition and accusations of implementing a communist agenda.
While Fox News may continue to dismiss government assistance as wasteful, it doesn't change the fact that it plays a critical role in reducing poverty and inequality.
Fox News dismissed the economic benefits of long-term unemployment insurance, erroneously characterizing the program as a "crutch" holding back economic growth.
On December 6, the Bureau of Labor Statistics released its unemployment report for the month of November. The national unemployment rate edged down from 7.3 to 7 percent, while the economy added a total of 203,000 jobs month-to-month, beating economists' expectations.
On the December 6 edition of Fox News' Your World, host Neil Cavuto and Fox Business contributor Charles Payne used the better than expected report to cast doubt on Rep. Nancy Pelosi's (D-CA) recent call to extend long-term unemployment benefits set to expire at the end of the year. Cavuto claimed that Pelosi was misguided for "talking up the need for extending jobless benefits and all of that in the face of more jobs" before Payne launched an all-out attack on social safety net programs:
PAYNE: Yeah, you know, it's really interesting as people, as we get more and more people coming off these jobless benefits, what are they doing? They're going back into the job market. What's happening? More jobs are being created. It's the exact opposite of what they're preaching in Washington which is the defeatist attitude. They don't believe in the American economic system. You know, it doesn't need all these crutches, it doesn't need all these aids. Let people come back into the job market, that's a sign of confidence; confidence is what this is all about. That's what will spark a real recovery. Unlimited unemployment benefits, 50 million people on food stamps, that's nutty stuff, you can do the math, you can talk about multiplier effects all you want, that's not what America was built on. This stock market wants people to get off these unemployment benefits after three years and look for a job, because they will eventually find a job and that's better for all of us.
Cavuto and Payne's claim that the strong jobs report indicates that unemployment insurance doesn't have to be extended -- in addition to claiming that allowing the program to expire would help the economy -- is at odds with reality.
Despite recent months of relatively strong job growth, the long-term unemployed -- the same people who are facing benefit cuts when the Emergency Unemployment Compensation (EUC) program expires later this month -- have seen little gain. According to economist Chad Stone of the Center on Budget and Policy Priorities, long-term unemployment currently "equals the highest rate achieved in any previous recession since the end of World War II." Stone also noted that when previous emergency unemployment insurance programs expired, the long-term unemployment rate was at far lower levels.
The Wall Street Journal editorial board pushed long-debunked myths about the minimum wage, misleadingly criticizing the growing support for increasing the minimum wage as economically destructive.
In a December 5 editorial, the Journal criticized President Obama's support of increasing the minimum wage to $10.10 an hour, claiming that the move would harm the economy and the job market. After lamenting the passage of a number of recent state-level minimum wage hikes, The editorial concluded:
Our readers are familiar with the mountains of evidence that minimum wages lead to fewer workers hired. Small minimum-wage hikes have small negative employment effects, but raising a worker's cost by 50% or more risks pricing many low-skilled workers out of the job market.
While the Journal claims that there are "mountains of evidence" that support the claim that minimum wage hikes are harmful to the labor market, it never offers any specific proof about their broader impact. If it had actually looked at the "mountains of evidence" concerning minimum wage hikes, a different picture would emerge.
Research conducted by economists Paul Wolfson of Dartmouth and Dale Belman of Michigan State looked at a variety of studies published on the minimum wage since 2000. While some found negative employment effects and some found positive effects, their analysis concluded that across studies, there are no statistically significant negative hiring effects of increasing the minimum wage.
Furthermore, according to a report from the Center for Economic and Policy Research, while "employment responses generally cluster near zero," the effect of a minimum wage hike on employment is "more likely to be positive than negative."
Of course, nowhere in its editorial did the Journal note the positive effect a minimum wage increase would have on workers. According to the Economic Policy Institute, raising the minimum wage to $10.10 an hour would increase the wages of about 30 million workers, 88 percent of whom are at least 20 years old.
In addition to the benefit of workers receiving higher wages, a minimum wage increase would also help the economy at large. According to the same EPI study, the increased spending power of workers would increase gross domestic product by about $32 billion and create approximately 140,000 jobs.
Flickr Image Via The All-Nite Images.
In 2013, broadcast evening news programs have largely ignored the need for the economy to return to full employment, instead placing overwhelming focus on debt and deficit reduction.
Right-wing media have repeatedly blocked efforts to help the economy return to full employment in recent years, instead placing undue focus on policies that would hinder economic growth and job creation.
In a December 2 post on The New York Times' Economix blog, Center on Budget and Policies Priorities Senior Fellow Jared Bernstein outlined a number of policies that would help the economy return to full employment, roughly defined as when all who are able and want to work are employed. Bernstein's policy prescriptions derive from his recently released book, Getting Back to Full Employment, coauthored with economist Dean Baker.
Bernstein's myriad recommendations, as he notes, have been repeatedly stymied by the current "political environment." Many of the policies he recommends -- particularly those related to fiscal policy -- have been given extra derailment by the right-wing media, who vehemently oppose efforts that would return the U.S. economy to full employment.
The primary reason Bernstein cites to explain why the economy has been operating below full employment is the implementation of austerity measures that have drastically reduced the deficit in the past few years. According to Bernstein, the policy of cutting deficits in a time of high unemployment has held back the economy from reaching its full potential.
Of course, in the past few years, right-wing media have championed every effort to reduce deficits and derided any policies that would potentially increase them, even if the result was faster economic and jobs growth.
For example, in the third quarter of 2013, Fox News placed overwhelming focus on deficit reduction, mentioning its supposed need as the country's top economic priority instead of economic growth. Indeed, calling for deficit reduction has become a theme at the network, even while other news outlets place more emphasis on the need for economic growth.
Right-wing media's focus on deficits as economic priorities has not only impeded efforts to increase employment through increased government spending -- an idea endorsed by economists -- but has also crowded out any discussion of pro-growth economic policy.
Bernstein states that one of the best paths to full employment is directly targeting unemployed people through things like subsidized jobs programs. According to Bernstein, government should be involved in directly creating jobs as "employer of last resort," adding that "just as the Fed's powers must be invoked when credit markets fail, so must the government's when labor markets fail to create the quantity of jobs necessary to employ American labor resources (or 'people,' if you prefer)."
In the past few years, right-wing media have not only railed against enacting policies that would create jobs indirectly -- such as canceling sequestration -- but also against direct employment efforts.
In 2011 when President Obama introduced the American Jobs Act, a bill that would directly increase employment through investment and jobs training programs for the unemployed, right-wing media were quick to run attacks against the legislation. Fox News erroneously characterized the bill as "another failed stimulus plan" and falsely claimed that economists considered it "nonsense." And even though the 2009 American Recovery and Reinvestment Act - commonly known as the stimulus -- unequivocally created up to millions of jobs, Fox still continues to characterize the bill as a failure.
Bernstein notes that one of the greatest direct employment efforts of the past few years was utilizing the Temporary Assistance for Needy Families (TANF) Emergency Fund to places hundreds of thousands of low-income individuals in temporary jobs. Of course, TANF -- commonly referred to as welfare -- has become right-wing media's favorite boogeyman, with false claims about its effectiveness and necessity trumpeted regularly on Fox News.
Bernstein's final recommendation focuses on the need for greater infrastructure investment, noting that it would increase long-term economic output and productivity. He also notes that given current low borrowing rates, increased investment through deficit spending would produce minimal negative side effects.
Right-wing media have long opposed infrastructure investment and have ramped up efforts to block additional investment in recent months. Conservative media figures repeatedly dismiss calls for additional investment, erroneously claiming that current investment levels are adequate despite the fact that spending on infrastructure is at historic lows. In a more direct and egregious attack on infrastructure spending, The Wall Street Journal editorial board recently claimed that it could not spur economic growth despite mounting evidence to the contrary.
While Bernstein includes additional recommendations on how to achieve full employment that get little play in national media debates, it is clear that right-wing media have played a role in ensuring that the economy does not achieve this goal anytime soon.
After weeks of highlighting negative aspects of the Affordable Care Act (ACA), media outlets have largely underreported the law's success in helping slow the growth of health care costs.
Reports indicate that CNBC business anchor Maria Bartiromo will soon move to the Fox Business Network to host a weekday market hours program. Judging by Bartiromo's past comments, the host will find a welcome home at Fox.
On November 18, multiple news outlets reported that Bartiromo, currently the anchor of CNBC's Closing Bell, intends to leave her current position to take a job at Fox Business. According to USA Today, Bartiromo will also report for Fox News.
A March 2010 profile of Bartiromo in New York magazine described her as "empathetic to Big Business" and noted the criticism she's taken for being "too cozy" with the people she covers as a journalist. Bartiromo dismissed her critics as jealous: "Anybody who has been very successful is sort of, you know, in the crosshairs."
Indeed, Bartiromo has gone to great lengths to protect the interests of businesses, even advancing borderline conspiracy theories about the Obama administration and government regulatory agencies.
In 2011, Bartiromo repeatedly argued that the National Labor Relations Board (NLRB) should not have intervened when Boeing was accused of anti-labor practices, going so far as to claim that the only reason NLRB filed suit against the company was because Boeing's jobs are non-union. In late 2012 when Citigroup CEO Vikram Pandit unexpectedly resigned, Bartiromo asserted that is was because he was "[g]etting bashed and bashed and bashed again by the President, by the populists." And of course, there is Bartiromo's recent staunch defense of JPMorgan Chase CEO Jamie Dimon, despite the fact that Dimon headed the investment bank when it was involved in allegedly fraudulent deals in the mortgage security market just before the financial crisis.
Bartiromo's soft approach to business interests is exactly what will make the host successful at Fox. The network regularly accuses the federal government of committing "shakedowns" whenever big business interests are held accountable for misconduct, even when there is mounting evidence of wrongdoing. Similar to Bartiromo's assertion that Pandit resigned because of pressure from the Obama administration, Fox Business' Stuart Varney claimed that when Standard & Poor's Devan Sharma stepped down as president in 2011 it was because the Obama administration was exacting revenge for S&P's downgrade of the U.S. credit rating.
Bartiromo's defense of big business is not the only reason she'll fit in at Fox -- she's also well-practiced in false, conservative attacks on President Obama. In October 2012, she suggested that the reason President Obama did not refer to the September 2012 attacks in Benghazi, Libya as "terrorism" -- a well-worn falsehood -- was because he may have been trying to garner support for cuts to military spending. The attacks in Benghazi, of course, have become fodder for Fox to advance baseless conspiracy theories and attacks on the Obama administration and former Secretary of State Hillary Clinton.
Given that Bartiromo's past comments fit into Fox's pro-business anti-government narrative, it is no wonder that the network would take her on board.
(Image via Financial Times via Creative Commons License)
The Wall Street Journal encouraged Congress to support budget cuts while simultaneously arguing for increased economic growth that would be hindered by such cuts.
In a November 11 editorial subtitled "Deficits are falling, but they'd fall more with faster economic growth," The Wall Street Journal argued that while a recent Congressional Budget Office (CBO) report found that the deficit fell to 4.1 percent of GDP in 2013, this number would be smaller if economic growth were stronger, concluding that "above all faster economic growth" is the best path to reduce deficits.
The WSJ urged Republicans in Congress to stand firm on budget caps and across-the-board spending cuts known as sequestration. From the editorial:
But a big part of the spending control is due to the budget caps and sequester. Defense spending took the biggest hit, falling by 6.6% in 2013 and for the second year in a row. Nondefense discretionary spending also fell overall, though CBO didn't break out the details. The spending caps are clearly working, and Republicans should refuse to ease them unless Mr. Obama provides substantial changes in entitlement policy. That means immediate changes in law, not merely promises of future cuts to medical providers that will never happen.
Embracing budget caps and sequestration while arguing for increased economic growth is curious considering that economists have repeatedly noted that budget sequestration has and will continue to hinder economic growth.
According to a separate CBO analysis, canceling sequestration would result in a 0.7 percent increase in GDP, an additional 900,000 jobs in the third quarter of 2014, and continued benefits for years to come.
Economists have long supported increased economic growth to reduce deficits, but unlike the WSJ, they argue that increased investment in the short term -- not destructive cuts -- is the answer.
According to economists Robert Reich and Jared Bernstein, focusing too much on deficit reduction through spending cuts encourages policies that hinder economic growth, such as sequestration. Instead, they argue that focusing on economic growth with increased government spending has the benefit of increasing jobs in the short-run and decreasing deficits in the long-run. According to Reich:
But more jobs and growth will help reduce the deficit. With more jobs and faster growth, the deficit will shrink as a proportion of the overall economy. Recall the 1990s when the Clinton administration balanced the budget ahead of the schedule it had set with Congress because of faster job growth than anyone expected -- bringing in more tax revenues than anyone had forecast.
The best way to generate jobs and growth is for the government to spend more, not less. And for taxes to stay low - or become even lower - on the middle class.
If the WSJ were truly concerned about reducing deficits through economic growth, it would reject budget cuts and embrace expansionary fiscal policy.
Incoherently pushing for budget cuts as a way to grow the economy, however, is standard practice for WSJ. In a February editorial, the outlet ignored all economic evidence to falsely suggest that that sequestration will help the economy.
In the first month following the opening of healthcare exchanges -- a key component of the Affordable Care Act (ACA) -- broadcast news programs have largely ignored the role of expanded health care in reducing economic insecurity, instead placing overwhelming focus on glitches in the Healthcare.gov website.
Cable and broadcast nightly news programs have remained completely silent on pending automatic cuts to the Supplemental Nutrition Assistance Program (SNAP) -- formerly known as food stamps -- which will have negative impacts on the economy and low-income groups.