Fox News contributor Laura Ingraham tried to downplay the effects of the recent government shutdown by citing data from before the shutdown even began.
On November 7, the Commerce Department released its latest economic growth estimate for the third quarter of 2013. These data, which track the growth of gross domestic product (GDP) from July through September 2013, revealed a 2.8 percent growth rate over that three-month period.
On Twitter, Ingraham interpreted the reported 2.8 percent GDP growth rate as evidence that the 16-day government shutdown -- orchestrated by the Republican caucus in the House of Representatives and emboldened by favorable right-wing media coverage -- actually had little effect on the economy.
If Ingraham had taken time to read actual reporting on the subject, she would have seen that the third-quarter report (July-September) does not include any negative effects of the government shutdown, which started on October 1. From the LA Times:
The third-quarter outcome was nearly a full percentage point stronger than most economists had predicted. Analysts expect the shutdown will slow growth in the October-December quarter.
A widely-reported impact estimate from financial ratings agency Standard & Poor's put the cost of the government shutdown at roughly $24 billion. The agency also lowered its growth forecast for the last quarter of the year (October through December). Economists argue that the shutdown will have lingering effects on the labor market and overall economy for the foreseeable future. The shutdown also eroded consumer confidence and may have derailed our gradual economic recovery.
Ingraham's faulty attempt to downplay the negative economic consequences of the government shutdown reveals a clear misunderstanding of the facts and of calendars.
UPDATE (11/7): Ingraham has since deleted her tweet and has issued no correction to her Twitter account at time of posting.
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.
Fox Business' Charles Payne questioned the need for fast food workers to rely on federal assistance, absurdly citing aggregate earnings of workers and ignoring the fact that many in the industry earn below subsistent wages.
On the October 25 edition of Fox Business' Varney & Co., guest host Charles Payne and Fox contributor Elizabeth MacDonald discussed a recently released audio recording from the advocacy group LowPayIsNotOK.org. In the recording, a long-time McDonald's employee is directed by a "McResources" representative to seek out federal benefit programs to augment her inadequate take-home income. MacDonald cited a statement from McDonald's disavowing the call before Payne launched into a slander-filled tirade against a stereotyped generalization of low-wage, fast food employees:
PAYNE: There is a lot of unfortunate parts of the story. If you want to create a society where these jobs -- $8 jobs go for $15. Then what you're saying to people is like, okay, "don't improve your life. Don't finish high school. Don't go to college. Don't, you know what, have three or four kids out of wedlock. Don't put yourself in a predicament where this is your only option. In fact, keep doing what you're doing, smoke weed all day if you want. Doesn't matter. You'll get rewarded because in this society Mickey D's has got the money. They owe it to you." And I think that's a work mentality.
Payne concluded his screed by referencing the aggregate wages of fast food employees nationwide to support his claim that they don't actually need taxpayer-subsidized assistance programs:
PAYNE: By the way, people should know. They say it's between $3 to $7 billion that fast food workers get in care from the government. In the same time though, these fast food workers make between $41 and $46 billion. So who is subsidizing who?
While Payne is quick to dismiss that workers need these programs, absurdly citing aggregate earnings of fast food workers, facts show that they are indeed essential.
According to a recently released study by economists at the University of California, Berkeley and the University of Illinois, Urbana-Champaign titled "Fast Food, Poverty Wages: The Public Cost of Low-Wage Jobs in the Fast Food Industry," "annual earnings in the fast food industry are well below the income need for self-sufficiency," and after accounting for limited work hours, the median annual earnings of a fast food worker stands at just $11,056 -- below the federal poverty threshold for an individual. Couple those low earnings with the fact that workers in the industry are twice as likely to be in households with total income below the poverty line, and it becomes clear that reliance on federal programs is necessary.
Indeed, fast food workers are overwhelmingly more reliant on public assistance programs than other segments of the workforce.
In the week following the end of the 16-day government shutdown, major print media outlets shifted their attention to upcoming bipartisan budget negotiations. This coverage of budget priorities was far more likely to mention the need for deficit and debt reduction than economic growth and job creation, despite economists warning that growth is the more pressing concern.
Fox News has downright ignored the billions lost in productivity as a result of the government shutdown, which stands in stark contrast to the network's years-long attack on minimal waste and abuse in food assistance programs.
On October 16, the financial ratings agency Standard & Poor's released its estimate of the economic cost of the 16-day long shutdown of the federal government, concluding that it cost the American economy $24 billion in lost productivity. The agency also cut its forecast for economic growth in the upcoming fiscal quarter by at least 0.6 percentage points.
Since the shutdown was lifted on October 16, Fox News personalities have expended considerable effort downplaying the effect the shutdown had on the economy.
On October 16, Fox Business host Lou Dobbs cited a slight uptick on the Dow Jones industrial average throughout the shutdown as evidence that the nationwide closure of federal lands and agencies had a negligible economic effect. Fox Business' Melissa Francis made a similar argument, claiming that the shutdown had shown Americans they could live with "a lot smaller government." On the October 17 edition of The Five, Fox News host Eric Bolling questioned the validity of S&P, and other agencies, that report economic losses from the shutdown, baselessly suggesting that their reports are influenced by political factors.
Fox's continued denial of the ruinous economic effect of the government shutdown reveals the network's hypocritical and overzealous reporting on waste and abuse in federal anti-poverty programs.
In August, the United States Department of Agriculture (USDA), which administers the Supplemental Nutrition Assistance Program (SNAP), updated its figures for "trafficking," or when SNAP recipients sell their benefits for cash, in the program. Its data reveal a slight increase in trafficking rates from 1.0 percent in 2006-2008 to 1.3 percent in 2009-2011. The total value of trafficked benefits during the last three year period is estimated to be $858 million annually.
Rather than acknowledging that SNAP trafficking rates were still near historic lows, Fox misleadingly highlighted what it called a "30 percent" increase in abuse. Days previously, Fox dedicated another segment to attacking food assistance that included host Eric Bolling overestimating SNAP fraud and abuse rates by 5,000 percent.
The amount of yearly trafficking abuse in SNAP amounts to less than four percent of the wasted economic output caused by the government shutdown. In other words, the cost of the 16-day shutdown is nearly 28 times larger than a full year of food assistance abuse. While Fox has repeatedly claimed that waste in SNAP cannot be tolerated, the network has yet to acknowledge that waste from the shutdown even exists.
Of course, this should come as no surprise given the network's efforts to encourage the shutdown and resulting economic fallout. Fox News played a prominent role in encouraging and facilitating a partial government shutdown that cost the economy billions of dollars in lost productivity while producing zero policy gains for the Republican Party or its right-wing media champions. Fox has tried repeatedly to find scapegoats in the administration to shift blame away from allies in the House GOP caucus.
According to the USDA, "fluctuations in the number of SNAP participants in the last 16 years have broadly tracked major economic indicators." With the Republican-led shutdown effectively draining tens of billions of dollars out of the economy, SNAP registries are likely to increase in the near-term as the shutdown and lingering fiscal austerity drag down recovery.
If that happens, recipients of federal anti-poverty assistance can expect a resurgence of Fox attacks.
Wall Street Journal editorial board member Mary Kissel falsely claimed that no American homeowners have been wrongfully foreclosed on since the financial crisis of 2008 and 2009. In fact, federal investigations found more than a million homeowners have faced potentially wrongful foreclosures.
On the October 11 edition of Fox Business' Varney & Co., guest host Charles Payne was joined by Fox contributor Monica Crowley and Kissel to discuss the latest quarterly earnings report from JPMorgan Chase. The firm, which has been beset by legal battles, reported robust profits despite extensive legal expenses in the last fiscal quarter.
The discussion turned to an alleged government "shake down" of the bank and demonization of Wall Street when Kissel interjected that, in fact, the financial industry had done nothing whatsoever to deserve extra scrutiny:
KISSEL: There hasn't been a single homeowner who has been identified who was foreclosed on that shouldn't have been foreclosed on. Somebody who was paying his bills.
In fact, more than a million American homeowners were potentially wrongfully foreclosed on during the housing crisis.
An independent review of foreclosures, conducted by the Federal Reserve and the Office of the Comptroller of the Currency (OCC), found that up to 30 percent of the 3.9 million households foreclosed on by 11 leading financial institutions faced wrongful challenges or should have been subject to certain legal protections. From the Huffington Post:
Close to 1.2 million borrowers, or about 30 percent of the more than 3.9 million households whose properties were foreclosed on by 11 leading financial institutions in 2009 and 2010, had to battle potentially wrongful efforts to seize their homes despite not having defaulted on their loans, being protected under a host of federal laws, or having been in good standing under bank-approved plans to either restructure their mortgages or temporarily delay required payments.
They reveal that nearly 700 borrowers who faced foreclosure proceedings had actually never defaulted on their loans.
The Huffington Post further reported, according to OCC data, that nearly a quarter-million borrowers eventually lost their homes. JPMorgan Chase, the bank being discussed on Varney & Co., has paid out millions of dollars in settlements over wrongful foreclosures, "leading Jamie Dimon, JPMorgan's chief executive, to personally apologize for his bank's errors."
Kissel's argument that banks like JPMorgan Chase did nothing do deserve current legal investigation - and instead praising Dimon for not "blow[ing] up the bank" - denies the reality faced by millions of Americans over the past five years.
In the first week of cable and broadcast nightly news coverage of the ongoing government shutdown, networks largely failed to report the effects on low-income Americans, instead opting for discussions of political leverage and national park closures.
Major media outlets are pushing the narrative that the United States Department of the Treasury could prioritize payments to bond holders and select groups of recipients in lieu of an increase of the federal borrowing limit, also known as the debt ceiling, beyond October 17. This ignores Treasury Department officials and other experts who explain such prioritization is unworkable and legally dubious, and that default would still happen.
Fox Business host Stuart Varney believes that the ongoing government shutdown, while presenting no real threat to the economy, offers an opportunity to "punish" federal workers for "living on our backs."
On the October 2 edition of AM 560's The Big John & Amy Show, co-hosts John Howell and Amy Jacobson interviewed Fox Business' Stuart Varney and asked him about the government shutdown and its effect on workers and the economy. Varney stated, incorrectly, that the shutdown was not having an impact on financial markets or the greater economy before launching into a tirade against federal employees. When asked if federal employees deserved to be recompensed for lost wages during the shutdown, Varney had this to say:
HOWELL: Do you think that federal workers, when this ends, are deserving of their back pay or not?
VARNEY: That is a loaded question isn't it? You want my opinion? This is President Obama's shutdown. He is responsible for shutting this thing down; he's taken an entirely political decision here. No, I don't think they should get their back pay, frankly, I really don't. I'm sick and tired of a massive, bloated federal bureaucracy living on our backs, and taking money out of us, a lot more money than most of us earn in the private sector, then getting a furlough, and then getting their money back at the end of it. Sorry, I'm not for that. I want to punish these people. Sorry to say that, but that's what I want to do.
After co-host Amy Jacobson responded that "it's not the federal employees' fault" and that she hates to see them victimized by a political fight, Varney complained that in "the big picture" he is "getting screwed" by government workers who are "living large":
JACOBSON: But it's not their fault. It's not the federal employees' fault. I mean, that's what I'm sick of, I hate and it makes me anxious, to see people who are victimized because of a political fight.
VARNEY: I take your point Amy, it is not directly their fault, but I'm looking at the big picture here. I'm getting screwed. Here I am, a private citizen, paying an inordinate amount of money in tax. I've got a slow economy because it's all government, all the time. And these people are living on our backs, regulating us, telling us what to do, taxing us, taking our money, and living large. This is my chance to say "hey, I'm fed up with this and I don't miss you when you're on furlough." Sorry if that's a harsh tone, but that's the way I feel.
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Right-wing media are accusing President Obama of using "scare tactics" to score political points with the upcoming debt limit deadline, but professional economists agree that debt limit brinkmanship could end in disaster.
On October 2, President Obama sat down for an interview with CNBC correspondent John Harwood in which he said that Washington's political posturing was "different" this time, and that major financial institutions "should be concerned" by Republican threats to not raise the debt ceiling before October 17. But the right-wing media response to President Obama's caution has been to downplay the looming deadline while accusing the president of engaging in "scare tactics."
On the October 3 edition of Fox News' Fox & Friends, co-hosts Steve Doocy and Brian Kilmeade questioned if the president was hoping to "trigger a stock market sell-off":
In a later segment, the Fox & Friends crew was joined by Fox Business host Stuart Varney to discuss the effect the president's statements might have on financial markets. Varney and the hosts agreed that the president's rhetoric was designed to drive markets down and thus provide him with "extra leverage" in the debt ceiling fight: