Fox Shields Austerity Push From Economic Realities Even Republican Leaders Recognize
Fox News covered Democratic criticism of harmful and unnecessary spending cuts as a purely political maneuver, without acknowledging that those criticisms are reflected in actual economic data, and echoed by economists and even by House GOP leadership.
On the April 29 edition of America's Newsroom, host Bill Hemmer set up an interview with Wall Street Journal editorial board member Stephen Moore by suggesting that only Democrats argue that America is not in a "debt crisis," and hinted that the raw total of U.S. debt belies that claim. Moore proceeded to divert the conversation far away from economic reality, first citing a Fox News poll on public concerns about the debt, then accusing anti-austerity Democrats of merely seeking to protect "the favored programs that they care about," before finally misleading viewers on the relationship between economic growth and spending cuts. From America's Newsroom:
There are a few layers of deception to unpack here:
- Speaker John Boehner (R-OH) and Budget Chairman Paul Ryan (R-WI) acknowledged we don't have a "debt crisis." "We do not have an immediate debt crisis," Boehner said on ABC's This Week on March 17, acknowledging that he agrees with the President about the non-immediacy of the debt problem. "We do not have a debt crisis right now," Ryan said on CBS' Face the Nation on March 17, an acknowledgment Media Matters previously caught Fox concealing. This isn't, as Moore called it, "the new Democrat spin on the budget." It's an aisle-crossing reality.
- The primary research pillar of the austerity argument crumbled in mid-April. Insofar as austerity-pushing deficit hawks appeal to economic research at all, they primarily hitch their argument to research by Harvard economists Caroline Reinhart and Kenneth Rogoff. Reinhart and Rogoff argued that there is a tipping point, at a 90 percent debt-to-GDP ratio, past which economic growth is permanently stifled. Their research was thoroughly undermined by economists at University of Massachusetts Amherst, who found not only basic spreadsheet errors but unsupportable statistical weighting choices that render the Reinhart-Rogoff paper flatly wrong. This development might explain the uptick in anti-austerity rhetoric that Hemmer and Moore attribute to Democratic politicking.
- It's not just Democratic politicians arguing rapid austerity is harmful and unnecessary -- it's a broad range of economists. Richard Koo. Mark Thoma. Brad DeLong. Jared Bernstein. Dean Baker. Henry Aaron. Alan Blinder. Larry Summers. Even the American Enterprise Institute's John Makin (to say nothing of Nobel Prize winner Paul Krugman). Observing that austerity is premature and harmful isn't a "new line" from one political party, as Moore claimed, but rather the consensus position of numerous and ideologically disparate economists.
- GDP data actually do show that spending cuts put a drag on the economy. While Moore mentioned the topline data on GDP growth for the first quarter of 2013, and then attributed that "healthy" number to "Washington get[ting] at least semi-serious about cutting wasteful spending," the actual data undermines his entire pro-austerity argument. "The U.S. government is in pullback mode, and whatever one thinks about reducing the size government in the long run, for now it is unequivocally the villain in slowing growth. If there'd been no change in government spending over the last six months, GDP growth would have averaged a respectable 2.55 percent, not the current soft 1.45 percent," The Washington Post WonkBlog's Neil Irwin wrote in his examination of the GDP report. The chart below shows just how slowed government spending has placed a drag on overall GDP growth in the age of austerity:
These sorts of facts in the U.S., and related ones from other economies, are threatening to upend the entire austerity movement, as Irwin observes. But while that debate proceeds and evolves elsewhere, Fox News continues to offer conservatives a venue to avoid reconciling ideology and fact.