Economy

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  • Washington Post Corrects "Inaccuracies" In Trump's Air Force One Tweet

    Blog ››› ››› MEDIA MATTERS STAFF

    The Washington Post’s Glenn Kessler broke down the numerous errors in a tweet sent out by President-elect Trump calling for the cancellation of the building of an Air Force One plane claiming that “costs are out of control.”

    In a December 6 tweet, Trump said the cost of a new Boeing 747 Air Force One plane would be “out of control, more than $4 billion,” and called for the government to cancel the order.

    Later in the lobby of his New York Trump Tower, the president-elect called the alleged price of the plane “ridiculous … We want Boeing to make a lot of money, but not that much money.” But Washington Post reporter Glenn Kessler found that Trump’s tweet is incorrect. Boeing will design a replacement “for the aging pair of Air Force Ones” but is technically not building the jet, and the cost of the project has not been set. The Department of Defense estimates “a cost of $2.9 billion over the next five years,” with a possible additional $1 billion “to complete and procure the aircraft.” Kessler explained Trump cannot “cancel the order” because nothing has been ordered yet. From the December 6 Washington Post article:

    Trump is not a stickler for accuracy, but there are number of inaccuracies in his tweet. Let’s break them down one by one.

    “Boeing is building . . . ”

    Earlier in 2016, Boeing received a $170 million contract to design a replacement for the aging pair of Air Force Ones used by the president. Boeing is not actually building the jet, though logically it is the only U.S. manufacturer with the capability to build such an aircraft.

    “ … a brand new 747 Air Force One … ”

    At a minimum, there would be two Air Force Ones. You need a spare in case there is a problem with one. The jets generally have a life cycle of 30 years.

    A plane only receives the call sign “Air Force One” when the president is on board. This is actually a highly modified version of the Boeing 747-8 jet.

    “Costs are out of control, more than $4 billion”

    Cost have actually not been set. The Defense Department’s five-year plan indicates a cost of $2.9 billion over the next five years for design and development. It’s logical to assume at least another $1 billion in additional expenses to complete and procure the aircraft.

    So an estimate of $4 billion — for design, testing and manufacture of at least two jets — is not completely out of line. But the budget is subject to approval by Congress and the actual design of the aircraft. Boeing literally needs to re-engineer the plane from the ground up, so there are many one-time expenses.

    [...]

    “Cancel the order!”

    Nothing has been ordered yet. But the program could be eliminated. This may not be a problem for Trump, but certainly would affect his successors, especially if no order is placed before Boeing stops making 747s. The current aircraft were delivered in 1990, and as we noted, the life cycle is about 30 years. The Pentagon says the current fleet “faces capability gaps, rising maintenance costs, and parts obsolescence as it reaches the end of its planned 30-year life-cycle.”

    Boeing seemed to “shrug off” the tweet, which caused the company’s stocks to dip about one percent in the morning, but bounced “back in the black” later that same day.

  • Right-Wing Media Slam Student Loan Assistance, Calling It A “Con” And A “Bailout”

    Blog ››› ››› ALEX MORASH

    The Wall Street Journal’s editorial board joined a chorus of right-wing outlets in blasting the federal government’s income-based student loan repayment program, calling it a costly “con” meant to “buy millennial votes.” Yet right-wing media are ignoring the benefits of a program that could relieve millions of student borrowers of a portion of their remaining debt and that is still generating a profit.

    Right-wing media lambasted the Department of Education and student borrowers after the Journal reported on November 30 the latest findings from the Government Accountability Office (GAO), which found that the government is on track to forgive $108 billion of $352 billion in student loans as part of federal income-driven repayment plans. The Journal’s editorial board blasted the government on December 1, calling the latest findings proof that the Department of Education’s loan program is a “con” designed to “buy millennial votes.” (The editorial column was the Journal’s second since November 1 lamenting the federal program, which has led to millions of students earning student loan forgiveness.) Earlier that day, Fox News host Jon Scott questioned if the program was a “bailout” for student borrowers. Fox Business host Stuart Varney also called the program “a bailout” on the November 30 edition of Varney & Co., while his guest Steve Costes added that the program is “a shame.”

    Federal student loan borrowers have multiple repayment plan options, including income-based plans that require borrowers to pay back loans based on a percentage of their income for a certain number of years, after which the remainder is eligible to be forgiven. The GAO’s findings were for the hypothetical cost in loan principal forgiveness for the 5.3 million borrowers who signed up for income-based repayment plans for loans issued over a 22-year period, between 1995 to 2017. These borrowers will likely see an average of $21 forgiven for every $100 in loans received. Despite right-wing media complaining about the cost of borrower relief for those on income-based payment plans, the GAO found that the Department of Education still nets a profit on student loans.

    The reason the government still makes a profit even after loan forgiveness is because many federal student loans have an interest rate at 6.8 percent -- a figure that is much higher than inflation or the 1 percent interest rate banks receive from the Federal Reserve. The 6.8 percent interest rate is so high that the GAO’s hypothetical borrower would pay almost double the original principal of their loan if the income-based plan had no cutoff date for forgiveness:

    Student loan debt is a leading concern among young people, with The Atlantic finding nearly 30 percent of Americans aged 18 to 29 “cited paying off student loans as their biggest financial challenge.” According to Fortune, “there is little doubt that many Millennials are struggling financially” after a survey by PwC found that 79 percent of the 42 percent of millennials that have student loans struggle to pay those loans. Evidence shows student debt can impact personal wealth, delay homeownership affect personal decisions to marry or start a family, and that it has “cripple[d] retail sales growth.” The financial stress of student loans has a “devastating toll” on borrowers’ mental health, according to Complex, which cited findings by researchers that “student loans were associated with poorer psychological functioning.”

    While right-wing media push many myths about student debt, student concerns are valid; according to a November 21 op-ed published by Investopedia, Americans with student loan debt have “a challenging road ahead of them in the present and the future” due to workers being unable to save for retirement. The op-ed, which was authored by a financial adviser, even questioned whether people with student loans "will be able to retire” at all. The increasing debt burden can even hinder career advancement as graduates can be forced to take jobs that may have no chance of wage growth or career development so they can make debt payments on time.

    Conservative media have labeled higher education as a "privilege" and suggested students ought to choose fictional cheaper colleges. Some outlets have even defended schools that take advantage of students and leave them with significant debt. But research shows college matters now more than ever, and the cost to attend is rising across the board. The student debt crisis is especially damaging for poor students and students of color, who more frequently attend cheaper open-access and community colleges and are still forced to borrow in higher numbers to pay for their education.

    Blaming students for the student loan debt crisis ignores the facts and distracts from finding real solutions to America's skyrocketing student debt burden.

  • Television News Praises Trump’s “Symbolic Coup” In Carrier Jobs Announcement

    Indiana-Based Company Convinces Trump To Give It Taxpayer Money, Still Moves Many Of Its Jobs To Mexico

    ››› ››› CRAIG HARRINGTON

    Broadcast and cable news personalities rushed to credit President-elect Donald Trump for closing a deal with the Indiana-based manufacturer Carrier that provides the for-profit company with millions of taxpayer dollars while allowing it to still outsource hundreds of jobs to Mexico. Journalists and reporters framed the agreement as a “symbolic coup” and “unadulterated win” for Trump’s incoming administration even as they acknowledged that supporting a relatively small number of jobs at taxpayer expense is an unsustainable manufacturing policy.

  • Fox News Cheers Trump Over 1,000 Carrier Jobs; Denounced Obama For Saving 1.5 Million Auto Industry Jobs

    Blog ››› ››› ERIC BOEHLERT

    Fox News and much of the conservative media slipped into messiah mode coverage this week when news broke that Carrier, the air conditioner giant, has decided to not move approximately 1,000 manufacturing jobs from Indiana to Mexico as the company had previously planned. President-elect Donald Trump took credit for having negotiated the respite.

    Cheering Trump’s hands-on approach and his commitment to the working class, Fox talkers portrayed the Republican’s maneuver in relentlessly glowing terms. “A Big Win For Donald Trump,” announced Bill O’Reilly’s show last night.

    Fox’s Stuart Varney claimed Trump had played hardball with Carrier and won: “He strong-armed them. What’s wrong with that?” (According to reports, it was likely the lure of additional tax incentives that convinced Carrier to keep the jobs in Indiana, not being “strong-armed” by Trump.)

    Trump’s cheerleader-in-chief Sean Hannity was just gobsmacked by the whole thing, saying on his radio program that he "can't think of a time in my lifetime where a president-elect or a president ever" did this. 

    Hannity loved the fact that Trump reached out to corporate America, which is fascinating because you know what Hannity didn’t love in 2009? He didn’t love when newly elected President Obama reached out to Detroit’s auto industry in the form of an $80 billion-dollar bailout. Back then, an unhinged Hannity called Obama every name in the book as conservative pundits accused the president of trying to destroy democracy and capitalism.

    Fox News and the entire right-wing noise machine relentlessly denounced Obama as he tried to rescue American manufacturing jobs, which the federal bailout eventually did. One independent study estimated the aggressive government move saved 1.5 million jobs. “This peacetime intervention in the private sector by the U.S. government will be viewed as one of the most successful interventions in U.S. economic history," the study’s author wrote.

    Lots of people might forget, especially in light of the bailout’s stunning success, but Obama’s push to help the Detroit industry once served as a defining line of GOP attack. The bailout symbolized the dangers of Obama's alleged socialist/gangster leanings. This, despite the fact it was actually President George W. Bush who unveiled the first phase of the bailout plan during the final weeks of his presidency, in order to "avoid a collapse of the U.S. auto industry."

    Nonetheless, the topic soon became a cornerstone of the Tea Party and its overheated attacks on Obama, amplified by Fox News.

    Remember how Varney this week toasted Trump for having “strong-armed” Carrier? Back in 2009, the host was furious that Obama was allegedly trying strong arm the public into buying American cars: “[N]ow you're in the position where the government somehow has to coerce or force us all into buying the small cars that it insists Detroit puts out." (Varney routinely whined that Obama was a “bully” to business.) 

    Meanwhile, Glenn Beck, then with Fox News, claimed the bailout reminded him of "the early days of Adolf Hitler." Fox favorite Michelle Malkin compared the auto deal to a "crap sandwich," and a "lemon" the U.S. taxpayers would be stuck with "for life."

    Hannity himself berated Obama for engaging in what he called a "mission to hijack capitalism." And in the infamous words of Rush Limbaugh, it was as if General Motors and Chrysler "bent over and grabbed the ankles." (Limbaugh loves Trump’s Carrier deal, by the way.)

    Question: Why would conservatives be so upset about saving American manufacturing jobs? Seems bizarre, right? But they were furious. So wrapped up in hatred for the new Democratic president, conservative pundits despised the government’s attempt to save GM and Chrysler from bankruptcies. They also seemed to despise the companies’ union workers, suggesting they were wildly overpaid. (Pundits even lied about how much the Detroit autoworkers made.)

    Republican politicians were also angry. Mitt Romney, who’s reportedly being considered for a cabinet position in Trump’s administration, derided the auto bailout as a "sweetheart deal disguised as a rescue plan," and guaranteed that if Detroit companies accepted the aid, you could "kiss the American automotive industry goodbye." 

    In the end, the bailout that Obama championed saved more than one million jobs, and Fox News still hated it.

    If only Obama had saved 1,000 Carrier jobs instead.

  • Evening News Virtually Ignores Paul Ryan’s Medicare Privatization Plan

    MSNBC Only Outlet To Vet Ryan's Scheme To Gut The Social Safety Net

    Blog ››› ››› CRAIG HARRINGTON

    Weekday evening programming on the largest cable and broadcast news outlets almost completely ignored a long-standing Medicare privatization scheme favored by Speaker of the House Paul Ryan (R-WI) in the days since he first resurrected the idea of radically reshaping the American health care system toward for-profit interests.

    During a November 10 interview with Fox News host Bret Baier, Ryan misleadingly claimed that due to mounting “fiscal pressures” created by the Affordable Care Act, the Republican-led Congress would be forced to engage with what Baier called “entitlement reform” sometime next year. Ryan falsely claimed that “because of Obamacare, Medicare is going broke” and that the popular health insurance system for American seniors will have to be changed as part of any legislation to “repeal and replace” President Obama’s health care reform legacy. From Special Report with Bret Baier:

    According to a Media Matters analysis of broadcast and cable evening news coverage from November 10 to November 27, Ryan’s plan to privatize the nationwide, single-payer health care coverage currently enjoyed by millions of seniors has gone unmentioned on ABC, CBS, NBC, CNN, and Fox News. Ryan’s so-called “premium support” plan was briefly mentioned on the November 22 edition of PBS NewsHour when co-host Judy Woodruff pressed President-elect Donald Trump's former campaign manager, Kellyanne Conway, as to whether Trump would accept Ryan’s privatization proposal. By comparison, during the same time period, MSNBC ran six prime-time segments exposing Ryan’s privatization agenda:

    According to a July 19 issue brief from the Kaiser Family Foundation, conservative lawmakers are likely to pursue “a proposal to gradually transform Medicare into a system of premium supports, building on proposals” adopted by Ryan when he served as chairman of the House Budget Committee. These so-called “premium supports” would provide each Medicare beneficiary with a “voucher” that can be used for the purchase of private health insurance; they represent “a significant change from the current system” that pays health care providers directly for services rendered.

    In essence, Ryan’s plan would privatize Medicare and redirect hundreds of billions of tax dollars that currently go to doctors, hospitals, and other medical service providers through the costly private health insurance market.

    This startling scheme bears similarities to a failed 2005 attempt by the Bush administration to partially privatize Social Security. Democratic members of Congress are already aligning themselves against Ryan’s throwback plan to gut Medicare, and it’s not actually clear if Trump is supportive of the initiative, which he refused to fully endorse on the campaign trail.

    As the Center on Budget and Policy Priorities (CBPP) pointed out last July, claims that Medicare is “nearing ‘bankruptcy’ are highly misleading,” and Ryan’s specific charge that Medicare is “broke” because of the ACA is completely wrong. President Obama’s health care reform law greatly improved Medicare’s long-term finances and extended the hospital insurance trust fund’s solvency by 11 years.

    The looming fight over the future of Medicare, which serves over 55 million beneficiaries and accounted for 15 percent of the entire federal budget in 2015, has been well-documented, but it has garnered almost no attention on major television news programs.

    Millions of Americans who rely on broadcast and cable evening news are completely unaware of the stakes in this health care policy fight. They are also unaware that Ryan’s privatization scheme would leave millions of retirees at the whims of the same private insurance market that right-wing media are currently attacking because of increased rates.

    Methodology

    Media Matters conducted a Nexis search of transcripts of weekday network broadcast evening news programs on ABC, CBS, NBC, and PBS and weekday prime-time news programming (defined as 8 p.m. through 11 p.m.) on CNN, Fox News, and MSNBC from November 10, 2016, through November 27, 2016. We identified and reviewed all segments that included any mention of “Medicare.”

  • Fox News Peddles Misleading Deficit Hysteria To Undercut Obama’s Economic Record

    Confused Fox & Friends Host Claims Trump Is Not Inheriting “A Healthy Economy” From President Obama

    Blog ››› ››› CRAIG HARRINGTON

    Fox & Friends misinterpreted a nuanced statement about long-term federal budget deficits from the president of the Committee for a Responsible Federal Budget (CRFB) while falsely claiming that President-elect Donald Trump “is inheriting the worst economy since Truman.” The comments demonstrate the continued right-wing media effort to diminish the economic successes of the Obama administration.

    During the November 20 edition of CBS’ Face the Nation, an all-conservative panel lamented the supposed failure of President Obama to rein in the federal budget deficit. CRFB president Maya MacGuineas -- whom Nobel Prize-winning economist Paul Krugman has labeled “the queen of the deficit scolds” -- argued that the incoming Trump administration will inherit “the worst fiscal situation of any president” since Truman, “as judged by the debt relative to the economy.” MacGuineas’ point about the so-called “debt-to-GDP ratio” was part of a larger argument highlighting that the tax and economic policy proposals put forward by Trump and his GOP counterparts during the campaign are entirely at odds with their promises to reduce the federal budget deficit and national debt. From Face the Nation:

    As MacGuineas pointed out, Trump’s proposals would add “over $5 trillion to the national debt,” on top of $9 trillion that was already projected to accumulate over the next decade. CRFB says Trump’s proposals are significantly more expensive than those that were put forward by Democratic presidential nominee Hillary Clinton based on an analysis that assumes his proposed tax cuts generate economic growth. In fact, decades of evidence show no stimulative effects from tax cuts.

    It is true that the debt-to-GDP ratio is currently at its highest point since the end of World War II, but there is no reason to believe the current national debt is untenable. MacGuineas clarified her point later on Twitter, reiterating that Trump actually promises to make the “fiscal situation” worse and conceding that Obama actually inherited “one of the worst economic situations” in history:

    MacGuineas’ nuanced, but probably not very useful, argument about “fiscal situations” and Trump’s irresponsible approach to the federal budget was entirely lost on the crew of Fox & Friends, which misinterpreted her remark while falsely claiming that the overall economy is in poor health.

    During a November 21 interview with former Trump campaign manager Kellyanne Conway, co-host Brian Kilmeade butchered MacGuineas’ argument, stating, “This president-elect is inheriting the worst economy since Truman,” and, “It is not a healthy economy.” Conway agreed with Kilmeade’s hollow argument, slamming the Obama administration for the pace of debt accumulation over the past eight years while neglecting to mention that even the most favorable estimates concede that debt accumulation under Trump will far exceed Obama. From Fox & Friends:

    This is not the first time that Fox & Friends has lamented the supposed fiscal shortfalls of Democratic politicians while completely ignoring the reality that Trump’s plans are demonstrably worse by the same standards.

    Deficit hysteria used to be a cause célèbre of conservative media figures, who routinely slammed Obama’s alleged negligence with the nation’s finances. In 2010, an error-filled paper from two conservative Harvard economists, which falsely claimed that debt-to-GDP ratios exceeding 90 percent immediately result in domestic economic stagnation, generated unceasing criticism of the Obama administration. For years, deficit-obsessed right-wing outlets promoted the absurd claim that the national debt was pushing the United States to the verge of collapse, and right-wing politicians who are now aligned with Trump unfavorably compared the U.S. to crisis-stricken European countries.

    It remains to be seen how sincere conservative media personalities are about the need to balance the budget and reduce the debt -- but we’ll find out the answer if Trump has the opportunity to enact budget-busting tax cuts for the wealthiest and most powerful individuals and corporations in the world.

  • Media Falsely Give Trump Credit For A Ford Plant Not Moving To Mexico

    ››› ››› JULIE ALDERMAN

    Media are uncritically hyping President-elect Donald Trump’s false claim that he should be credited for Ford Motor Co.’s decision not to relocate a plant from Kentucky to Mexico, despite the fact that the plant was never going to close and no jobs were going to be lost. While right-wing media hyped Trump’s claim on its face as proof of his political success, mainstream media echoed that pro-Trump spin in a series of misleading headlines, which critics have called out for being out of context and “completely wrong.”