Media coverage of economic news has declined sharply over the past three months.
Media Matters research reveals a roughly 80 percent cumulative decline in segments dedicated to economic issues from April 1 through June 30. The week of the Boston Marathon bombings yielded zero news segments dedicated to economic coverage. Media diverted from its traditional lineup to cover the attack and ensuing manhunt. Even after accounting for this outlier in the data, economic coverage across the three major cable and broadcast networks displayed a strong negative trend.
According to a Gallup survey released June 28, Americans are most concerned about the economy when thinking about this nation's future. Economic issues remain at the forefront of American public interest polling, while media focus elsewhere.
American's concerns about the economy are not unfounded. Through the first quarter of 2013, the United States economy is on pace to produce $843 billion less than its ideal economic potential. This "output gap" is estimated to have cost the economy more than $4.6 trillion since the onset of the recession.
One major story consistently overlooked in the media is the pervasive negative effect of a weak economic recovery. Television pundits are often quick to pronounce that individual monthly job growth is insufficient but rarely discuss why those numbers are insufficient or what policy changes might be enacted to spur growth.
The primary factor holding back economic growth has been so-called "fiscal drag," or the economic policies out of Washington that emphasize austerity and deficit reduction ahead of stimulus and growth. Economists agree that fiscal austerity harms growth and has slowed economic recovery, but television news has largely ignored these expert opinions.
Despite the emergence of internet-based alternatives, television remains the primary news source for most Americans. According to a recent Gallup survey, 55 percent of Americans rely on television for current events. With finite time and resources to report developments, and with an industry-wide focus on alleged Washington "scandals," huge portions of the American public are not exposed to valuable economic coverage.
Broadcast and cable evening news coverage touched upon a variety of economic topics, including deficit reduction, economic growth, and entitlement reform throughout the second quarter of 2013. A Media Matters analysis shows that many segments lacked proper context or input from economists, while some topics went largely underreported.
Cable and television news outlets have overwhelmingly presented Social Security as a program that should be cut, giving little to no airtime for proposals that would instead strengthen the program for beneficiaries.
Media Matters research revealed significant media selection bias in the Social Security debate. Through the first six months of 2013, the three largest broadcast and cable news networks dedicated nearly 300 segments to discussions of Social Security. More than two-thirds of those segments framed the entire Social Security debate as a problem of long-term solvency and the national debt, which can only be solved through drastic cuts to beneficiaries.
Media's heavy focus on "fixing" the solvency of the program belies the fact that Social Security is funded for at least the next two decades.
On May 31, the Social Security Board of Trustees submitted its annual report to members of Congress and the White House, which concluded that Social Security "does not face an immediate crisis," as noted by the Center on Budget and Policy Priorities' summary of the report. The report recommends that lawmakers prudently address long-term solvency concerns, but need not immediately adopt deep benefit cuts.
The Economic Policy Institute argued, contrary to most news coverage, that the challenges facing Social Security are "modest and manageable." Nobel Prize-winning economist Paul Krugman had a similar reaction to the latest Social Security report, noting "the system will be able to pay most of its scheduled benefits as far as the eye can see." Krugman also recognized the irrationality of arguments made by those who claim to want to save Social Security from eventual collapse:
The risk is that we might, at some point in the future, have to cut benefits; to avoid this risk of future benefit cuts, we are supposed to act pre-emptively by...cutting future benefits. What problem, exactly, are we solving here?
While media coverage of Social Security paints the debate of the program as one-sided, members of Congress have put forth plans that would expand the program through need-based benefit increases and tax reform.
The most prominent Social Security expansion proposal involves raising the payroll tax cap from its current $113,700 annual limit. The payroll tax is the primary source of revenue for Social Security. A report from the Center for Economic and Policy Research revealed that placing a cap on taxable income causes low wage workers to pay higher effective rates than high wage workers. Eliminating the payroll tax cap would more evenly distribute payroll taxes to all workers while extending the life of the Social Security trust fund indefinitely.
In January 2013, the National Academy of Social Insurance conducted a comprehensive survey of American attitudes toward various Social Security reform proposals. The data revealed overwhelming support for lifting or raising the payroll tax cap, while respondents reported significant opposition to benefit cuts, including raising the retirement age and decreasing cost of living adjustments through chained CPI.
The Center for American Progress has also argued in favor of expanding Social Security through tax reform and increasing outlays to those beneficiaries who most rely on the program.
News segments devoted to the alleged demise of Social Security and other benefit programs consistently overlook these alternative proposals aimed at strengthening -- rather than cutting -- the program for beneficiaries.
Throughout the first half of 2013, broadcast and cable nightly news overwhelmingly discussed Social Security in an unbalanced and negative light by repeatedly insisting that the program is insolvent, must be cut, or poses a risk to long-term fiscal security.
Conservative radio host Rush Limbaugh severely misrepresented several years of student loan-related legislation in an attempt to smear Democrats while pushing yet another unfounded conspiracy.
On July 1, interest rates on government-sponsored Stafford Loans automatically doubled from 3.4 to 6.8 percent. Myriad provisions to avoid the rate hike have been advocated by various caucuses in the House and Senate, as well as by the White House.
On the July 1 edition of The Rush Limbaugh Show, Limbaugh stated that "it was Democrat legislation that doubled the student loan interest rate, 3.4 to 6.8 percent." He went on to claim that, originally, "Democrats intentionally wrote law to make student loan interest rates double in an election year" so they could "blame it on the Republicans."
While Limbaugh attempted to pin the automatic rate hike solely on Democrats, the legislation in question -- the College Cost Reduction and Access Act of 2007 -- passed both houses of Congress with broad bipartisan support. On September 7, 2007, the bill passed 292-97 in the House of Representatives with 77 Republican votes before passing 79-12 in the Senate with 33 Republican votes. The legislation did not face so much as a cloture motion from the Republican minority.
Limbaugh's claim that House and Senate Democrats intentionally designed the bill to raise interest rates to previous levels during an election year to help Democrats' election prospects in 2012 is also false. The final rate expiration date specified in the College Cost Reduction and Access Act of 2007 was negotiated with Republicans to go into effect on July 1, 2012 - the original Democratic drafts had the rate cut expiring in 2013.
Last summer, near the height of the election, President Obama and Republican presidential candidate Mitt Romney both lobbied Congress to delay the rate hike for twelve months specifically to avoid making student loan rates an election issue, according to The Washington Post.
Finally, after falsely claiming that Democrats would use the returning issue of student loan rates as a "bludgeon" against Republicans, Limbaugh reiterated a long-debunked claim that the increased revenue from a student loan rate increase would go to fund Obamacare, claiming, "The bottom line is that the student loan rate is going to double. It's gonna go from 3.4% to 6.8%, and here's the reason why: Congress has figured out they need that additional money to spend on Obamacare. "
In the weeks leading up to an automatic doubling of federal student loan interest rates, broadcast and cable nightly and weekend news devoted little time explaining the effects of the rate hike and the expiration of other programs designed to help American students, graduates and families with increasingly high education costs.
In 2007, Congress passed a law to reduce interest rates on federal subsidized student loans, the Stafford Loan program, to 3.4 percent. The law was intended to reduce college costs and increase access to higher education. The Budget Control Act of 2011 ended several provisions of previous law; foremost setting an expiration date of July 1, 2013, for Stafford Loan interest rates. Today, those rates automatically double to their previous 6.8 percent.
Media Matters research found the looming student loan deadline has been largely ignored by major news networks in the past several weeks. Since May 23, the date the House of Representatives passed a party line student loan plan of its own, primetime and weekend television news has offered just 13 brief segments on student loan issues.
Absent from media analysis has been any real discussion of economists' recommendations for dealing with student debt. Many economists, including Nobel Prize winners Joseph Stiglitz and Paul Krugman, have supported various efforts to defray college costs, expand federal funding, and provide restructuring and refinancing options for student and family borrowers.
In May, the Consumer Financial Protection Bureau released a report on student loan affordability. It found that expanded refinancing options for student debt could have a simulative effect on economic growth, household formation and homeownership among borrowers. The Federal Reserve Bank of New York had previously found that student debt was a driving force in decreasing home and automotive purchases among recent graduates.
The rate increase set to take effect on July 1 will directly affect millions of Americans while making college less affordable for prospective students. The Congressional Research Service estimated that the higher rate could cost average borrowers more than $1,000 to take out a subsidized federal loan. College graduates are saddled with an enormous debt burden - more than $1 trillion through 2013, according to The New York Times.
Media Matters conducted a Nexis search of transcripts of Sunday and evening (defined as 5 p.m. through 11 p.m.) programs on CNN, Fox News, MSNBC, and network broadcast news from May 23 through June 30. We identified and reviewed all segments that included any of the following keywords: student loan, college loan, student debt, college debt, student, debt, loan, and college.
The following programs were included in the data: World News with Diane Sawyer, This Week with George Stephanopoulos, Evening News (CBS), Face the Nation, Nightly News with Brian Williams, Meet the Press with David Gregory, Fox News Sunday, The Situation Room, Erin Burnett OutFront, Anderson Cooper 360, Piers Morgan Live, The Five, Special Report with Bret Baier, The O'Reilly Factor, Hannity, On the Record with Greta Van Susteren, Hardball with Chris Matthews, Politics Nation with Al Sharpton, All In with Chris Hayes, The Rachel Maddow Show, and The Last Word with Lawrence O'Donnell. For shows that air re-runs (such as Anderson Cooper 360 and Hardball with Chris Matthews), only the first airing was included in data retrieval.
Media Matters only included segments that had substantial discussion of increasing student debt or the July 1 interest rate deadline. We did not include teasers or clips of news events, and re-broadcasts of news packages that were already counted on their initial broadcast in the 5p.m. to 11p.m. window.
Despite a number of significant economic developments, major network and cable Sunday shows have been largely silent on the economy.
Media Matters research reveals that from May 12 to June 9, five major Sunday shows devoted only approximately 35 minutes of economic coverage.
During this time period, the Sunday shows were silent on the economy and missed an opportunity to cover significant developments.
Despite the various economic developments over this period, CNN and major network Sunday shows devoted little time to those stories. Only during the week of June 2 did coverage of the economy rise above five minutes, which provided three-quarters of the coverage for the entire five-week period.
In recent weeks, Sunday morning network news programs have virtually ignored economic issues, instead devoting hours of coverage to the September attacks on U.S. diplomatic facilities in Benghazi, Libya; improper targeting of conservative nonprofits by the Internal Revenue Service; controversial federal investigations of national security leaks; and new revelations about National Security Agency surveillance programs.
Fox Business host Liz Claman suggested that students should attend less expensive colleges as a solution to the mounting student debt problem, a recommendation that does not comport with facts about higher education costs.
Commenting on President Obama's speech concerning the importance of finding loan solutions for students and families, Claman argued that parents ought to prioritize "finding a less expensive college" during their university search. From the May 31 edition of Fox News' America's Newsroom:
Claman's argument that aspiring college students should base their choices on tuition costs has little value since education costs are increasing across the board. According to the National Center for Education Statistics (NCES), the average cost of attendance (tuition, room and board) for the 2010-11 academic year at a public university was about $13,600. This rate represented a 42 percent inflation-adjusted increase from the 2000-01 year.
The growing costs have already altered students' choices about where to attend school. More than four in 10 college students are already choosing less selective college options to avoid mountains of debt. Many students opt for public over private universities based on cost calculations, but they still graduate with too much debt and too few employment options.
Claman's argument is even less valuable to the more than 37 million American students and parents who already carry student loans. According to data from the Federal Reserve Bank of New York, the share of 25 year olds with outstanding student debt increased from just 25 percent in 2003 to 43 percent in 2012. The average debt balance-per-student increased from $10,649 to $20,326 during that period -- a 91 percent increase.
Meanwhile, median annual earnings among full-time workers aged 25 to 34 with a bachelor's degree have dropped -- from 2000-2010, earnings fell 12.2 percent among men and 9.5 percent among women.
With interest rates set to double on July 1, from 3.4 to 6.8 percent on subsidized federal loans, tens of millions of Americans need real time solutions, not empty suggestions that ignore reality.
A new review of the infamous Reinhart-Rogoff debt-to-GDP study further undermines the right-wing claim that high sovereign debt leads to low economic growth.
In their paper, "Growth in a Time of Debt," Harvard economists Carmen Reinhart and Kenneth Rogoff supported the notion that high levels of sovereign debt carry disastrous consequences -- particularly when debt reaches 90 percent of GDP -- that was promoted throughout the media.
Even though that premise was thoroughly debunked in April, members of the right-wing media have clung to the notion that while the 90 percent debt-to-GDP threshold in the Reinhart-Rogoff study was inaccurate, its conclusion that high debt slows economic growth remained unchanged.
When faced with the discredited research, Wall Street Journal editorial board member Stephen Moore claimed as debt mounts, "the negative effects of that become more pronounced." Fox Business' Lou Dobbs dismissed the critique of the Reinhart-Rogoff study as focusing too heavily on "a small mistake." Douglas Holtz-Eakin of the American Action Forum claimed that "the simple fact that debt ultimately hinders growth is unchanged." And editorials in both The Washington Post and The Wall Street Journal responded to the critique of the study by renewing calls for debt reduction in fear of negative economic outcomes.
New research further undermines this right-wing narrative. University of Michigan economist Miles Kimball and undergraduate researcher Yichuan Wang, examining the Reinhart-Rogoff data, conclude that high levels of debt have no link to slow, much less reverse, long term economic growth:
Based on economic theory, it would be surprising indeed if high levels of national debt didn't have at least some slow, corrosive negative effect on economic growth. And we still worry about the effects of debt. But the two of us could not find even a shred of evidence in the Reinhart and Rogoff data for a negative effect of government debt on growth.
Kimball and Wang's findings provide yet another blow to right-wing media's academic defense of austerity.