Right-wing media voices have coalesced around the myth that unemployment benefits to the long-term unemployed do not need to be extended because the economy is improving and benefits have existed for too long. These arguments, however, ignore key realities about long-term unemployment, namely that it remains elevated despite an improving economy.
The past 12 months witnessed innumerable attacks on social safety net programs in the United States. These attacks on American social insurance programs were hardly limited to Social Security -- all forms of social insurance, including unemployment benefits, food stamps, and disability, came under fire from mainstream and conservative media alike, regardless of the programs' social or economic benefits. Media Matters compiled a list of the six types of attacks on the social safety net in 2013.
For more than three years, an influential study by two Harvard economists -- Carmen Reinhart and Kenneth Rogoff -- provided a plausible foundation for attacks on spending of all types. The study fostered debt-paranoia among pundits otherwise interested in austere fiscal policies.
An April study by economists at the University of Massachusetts, however, concluded that the Reinhart-Rogoff data was error-filled in a way that selectively biased the results. A further review of the corrected data by economists at the University of Michigan found that the study should have been deemed inconclusive.
Despite losing its intellectual foundation in April, the deficit reduction talking point maintained a prominent position in fiscal policy discussion throughout the year.
Media calls for deficit reduction in the past year also regularly relied on budget reporting that lacked adequate context that federal budget deficits have declined precipitously from their 2009 peak. A Media Matters review of budget reporting done by The New York Times, The Wall Street Journal, and The Washington Post revealed that a sizeable majority of articles provided budget items and program spending figures out of context. Further analysis concluded this misrepresentative reporting to be little more than a scare tactic, which bolstered calls for deeper cuts to the safety net for the sake of alleged fiscal responsibility.
This lack of context in media, and the effect it had in shifting the policy debate, eventually encouraged Times public editor Margaret Sullivan to issue a statement promising to correct problematic reporting standards going forward, but other outlets have yet to follow suit.
The latest development in the never-ending soap opera of congressional budget negotiations is that Sen. Patty Murray (D-WA) and Rep. Paul Ryan (R-WI) are close to reaching a limited deal to partially replace spending cuts imposed earlier this year (the much-maligned sequestration). The details of the deal are not known, but that hasn't stopped conservative activist groups and pundits from denouncing Ryan -- a long-time conservative hero for his austere budget proposals -- as a sellout.
The Washington Post laid out what little is known about the emerging deal:
Senior aides familiar with the talks say the emerging agreement aims to partially repeal the sequester and raise agency spending to roughly $1.015 trillion in fiscal 2014 and 2015. That would bring agency budgets up to the target already in place for fiscal 2016. To cover the cost, Ryan and Murray are haggling over roughly $65 billion in alternative policies, including cuts to federal worker pensions and higher security fees for the nation's airline passengers.
Salon's Brian Beutler notes that if the deal ends up looking like this rough outline, then there's no real reason for conservatives to be all that upset: "If inked, it wouldn't raise revenue through the tax code, and would protect the Defense Department from sequestration's most severe cuts. At the same time, some of the savings in the deal would likely come out of the hide of federal workers."
And yet, the outcry from activists was swift. Groups like Heritage Action, Americans for Prosperity, and FreedomWorks are urging conservative members of Congress to vote against the budget deal, even though they don't know what the deal actually looks like.
Appearing on Fox News on December 10, Stuart Varney trashed the deal, calling it "a handshake deal. It does absolutely nothing to resolve the basic problems which we're facing. It does not tackle entitlement reform, it does not tackle tax reform, and it does nothing to drastically reduce the debt."
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.
Fox News' Neil Cavuto refused to hear arguments in favor of expanded infrastructure investments, instead claiming that revenue for necessary improvements will be lost to fraud or waste. Cavuto has repeatedly argued against and downplayed the necessity of infrastructure spending, revealing his misunderstanding of the the federal budgeting process and the current state of American infrastructure.
On the December 3 edition of Fox News' Your World with Neil Cavuto, Cavuto engaged in a contentious interview with Rep. Earl Blumenauer (D-OR) regarding the congressman's proposal to increase the federal gas tax as a means of financing necessary investments in roads, bridges, and other forms of public infrastructure around the country.
On the December 4 edition of Your World, Cavuto returned to the previous night's argument in his opening segment. He was joined in his heated criticism of infrastructure investments by libertarian pundit Matt Welch, editor-in-chief of Reason magazine. Both Cavuto and Welch continually claimed that they do not know where all of the infrastructure and transportation revenue has gone; maintaining only that it must not be going to the places where it is needed:
CAVUTO: To make the point here, that we're not following the moneys we're already spending that, I think, are not exactly in a 'lock box' just meant for this sort of thing.
WELCH: Yeah, I mean if you look at people who advocate for big government, they actually don't spend a lot of time extolling the virtues of big government, because that is an awkward conversation and because it requires them to do what you were asking earlier, is just document what you've already spent.
WELCH: Spending money on the federal level is an inefficient way to deal with local, and state, and city roads.
CAVUTO: If you were to add it all up. Let's say now -- being devil's advocate here -- let's take the stimulus money, the shovel-ready projects a lot of them were infrastructure-targeted, at around $800 billion and average it out over the last five years and throw in the $60 billion or so you're supposed to get from the oil companies, a lot of taxes, and they were going to tap that for infrastructure. You're looking at $250-300 billion a year that would be presumably allocated to just this sort of thing. We're asking for more?
Cavuto's central argument is that the federal government must not be spending money on infrastructure if our infrastructure is in a state of disrepair. Cavuto repeated a popular Fox News thesis, claiming that the government is wasting, misallocating or stealing tax dollars instead of putting them to good use.
In fact, the government's infrastructure budget is simply woefully underfunded.
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.
Fox News overstated the costs of Medicaid expansion for states by ignoring research and evidence showing that expanding Medicaid actually saves money for many states because of the high share of the cost being picked up by the federal government in the Affordable Care Act (ACA) and the reductions in money spent by states on uncompensated care.
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.
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.
From the October 31 edition of Fox News' The Real Story:
Loading the player reg...
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.
From the October 25 edition of Premiere Radio Networks' The Rush Limbaugh Show:
Loading the player reg...
From the October 23 edition of Cumulus Media Networks' The Mark Levin Show:
Loading the player reg...