Conservative media praised the failed theory of trickle-down economics in response to Hillary Clinton's remark that the middle class, not tax cuts for corporations, spurs economic growth, a position backed by economists.
From the October 27 edition of Premiere Radio Networks' The Rush Limbaugh Show:
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From the October 27 edition of Fox News' Fox & Friends:
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Mainstream media figures, following in the footsteps of conservative media, are trying to manufacture a scandal out of former Secretary of State Hillary Clinton's recent argument against trickle-down economics by stripping her comments of context to falsely cast them as a controversial gaffe or a flip-flop on previous statements about trade.
Conservative media outlets rushed to vilify Clinton's stance after she pushed for a minimum wage increase and warned against the myth that businesses create jobs through trickle-down economics at an October 24 campaign event for Massachusetts gubernatorial candidate Martha Coakley (D). Breitbart.com complained, "Clinton told the crowd ... not to listen to anybody who says that 'businesses create jobs,'" conservative radio host Howie Carr said the comments showed Clinton's "true moonbat colors," while FoxNews.com promoted the Washington Free Beacon's accusation that she said "businesses and corporations are not the job creators of America."
Mainstream media soon jumped on the bandwagon.
CNN host John King presented Clinton's comments as a fumble "a little reminiscent there of Mitt Romney saying corporations are people, too," and USA Today called the comments "An odd moment from Hillary Clinton on the campaign trail Friday - and one she may regret." In an article egregiously headlined, "Hillary Clinton No Longer Believes That Companies Create Jobs," Bloomberg's Jonathan Allen stripped away any context from Clinton's words in order to accuse her of having "flip-flopped on whether companies create jobs," because she has previously discussed the need to keep American companies competitive abroad.
Taken in context, Clinton's comments are almost entirely unremarkable -- and certainly don't conflict with the philosophy that trade can contribute to job growth, as Allen suggests. The full transcript of her remarks shows she was making the established observation that minimum wage increases can boost a sluggish economy by generating demand, and that tax breaks for the rich don't necessarily move companies to create jobs:
CLINTON: Don't let anybody tell you that raising the minimum wage will kill jobs. They always say that. I've been through this. My husband gave working families a raise in the 1990s. I voted to raise the minimum wage and guess what? Millions of jobs were created or paid better and more families were more secure. That's what we want to see here, and that's what we want to see across the country.
And don't let anybody tell you, that, you know, it's corporations and businesses that create jobs. You know, that old theory, trickle-down economics. That has been tried. That has failed. That has failed rather spectacularly.
One of the things my husband says, when people say, what did you bring to Washington? He says, well I brought arithmetic. And part of it was he demonstrated why trickle down should be consigned to the trash bin of history. More tax cuts for the top and for companies that ship jobs over seas while taxpayers and voters are stuck paying the freight just doesn't add up. Now that kind of thinking might win you an award for outsourcing excellence, but Massachusetts can do better than that. Martha understands it. She knows you have to create jobs from everyone working together and taking the advantages of this great state and putting them to work.
Economic experts agree that job growth is tied to the economic security of the middle class.
U.S. economic growth has historically relied on consumer spending, and middle class consumers are "the true job creators," Nobel Prize winning economist Joseph Stiglitz points out. Right now, the U.S. economy is "demand-starved," as Economic Policy Institute's (EPI) Joshua Smith puts it. Steiglitz says that, of all the problems facing the U.S. economy, "The most immediate is that our middle class is too weak to support the consumer spending that has historically driven our economic growth."
In a testimony before the Senate Committee on Health, Education, Labor, and Pensions, economist Heather Boushey noted that "It is demand for goods and services, backed up by an ability to pay for them, which drives economic growth" and "The hollowing out of our middle class limits our nation's capacity to grow unless firms can find new customers."
UC Berkeley economist Robert Reich agrees that the problem in the U.S. economy is demand. "Businesses are reluctant to spend more and create more jobs because there aren't enough consumers out there able and willing to buy what businesses have to sell," he writes, and places the blame on low paychecks and growing inequality: "The reason consumers aren't buying is because consumers' paychecks are dropping... Consumers can't and won't buy more." He says the key to job growth is "reigniting demand" by "putting more money in consumers' pockets." From The Huffington Post:
Can we get real for a moment? Businesses don't need more financial incentives. They're already sitting on a vast cash horde estimated to be upwards of $1.6 trillion. Besides, large and middle-sized companies are having no difficulty getting loans at bargain-basement rates, courtesy of the Fed.
In consequence, businesses are already spending as much as they can justify economically. Almost two-thirds of the measly growth in the economy so far this year has come from businesses rebuilding their inventories. But without more consumer spending, there's they won't spend more. A robust economy can't be built on inventory replacements.
The problem isn't on the supply side. It's on the demand side. Businesses are reluctant to spend more and create more jobs because there aren't enough consumers out there able and willing to buy what businesses have to sell.
The reason consumers aren't buying is because consumers' paychecks are dropping, adjusted for inflation.
Clinton's emphasis on the minimum wage is supported by economic experts as well. Reich says that raising the minimum wage is an effective way to generate the consumer demand that would spur job growth. It "would put money in the pockets of millions of low-wage workers who will spend it -- thereby giving working families and the overall economy a boost, and creating jobs." He also rejected critics' claims that giving low income-earners a raise hurts job growth: "When I was Labor Secretary in 1996 and we raised the minimum wage, business predicted millions of job losses; in fact, we had more job gains over the next four years than in any comparable period in American history."
EPI called the minimum wage a "critically important issue" that "would provide a modest stimulus to the entire economy, as increased wages would lead to increased consumer spending, which would contribute to GDP growth and modest employment gains" (emphasis added):
The immediate benefits of a minimum-wage increase are in the boosted earnings of the lowest-paid workers, but its positive effects would far exceed this extra income. Recent research reveals that, despite skeptics' claims, raising the minimum wage does not cause job loss. In fact, throughout the nation, a minimum-wage increase under current labor market conditions would create jobs. Like unemployment insurance benefits or tax breaks for low- and middle-income workers, raising the minimum wage puts more money in the pockets of working families when they need it most, thereby augmenting their spending power. Economists generally recognize that low-wage workers are more likely than any other income group to spend any extra earnings immediately on previously unaffordable basic needs or services.
Increasing the federal minimum wage to $10.10 by July 1, 2015, would give an additional $51.5 billion over the phase-in period to directly and indirectly affected workers, who would, in turn, spend those extra earnings. Indirectly affected workers--those earning close to, but still above, the proposed new minimum wage--would likely receive a boost in earnings due to the "spillover" effect (Shierholz 2009), giving them more to spend on necessities.
This projected rise in consumer spending is critical to any recovery, especially when weak consumer demand is one of the most significant factors holding back new hiring (Izzo 2011). Though the stimulus from a minimum-wage increase is smaller than the boost created by, for example, unemployment insurance benefits, it has the crucial advantage of not imposing costs on the public sector.
The economic benefits of a minimum wage increase are widely accepted. Over 600 economists signed a recent letter supporting an increase, arguing, "Research suggests that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front."
Thousands of low-income Detroit residents denied access to water over delinquent bills did not find much sympathy from the hosts of Fox & Friends, who argued, "If you're not paying for water, why should you get it?"
The city of Detroit has shut off water service to more than 27,000 households this year, an effort to address the water department's more than $5 billion in debt in a city where over 50 percent of residents are delinquent on their water bill.
An estimated 2,300 homes are still without water, despite the fact that the city has established a payment plan for some who are unable to afford their water bill. The city says that 33,000 customers are currently enrolled. According to U.N. human rights officials who made an informal visit to Detroit, the water disconnection constitutes a human rights violation.
But to the hosts of Fox & Friends, the water shutoffs were more justified. Co-host Ainsley Earhardt said that it is "devastating" that several thousand Detroit families don't have water and that she's sorry they can't afford to pay their bills, but declared:
EARHARDT: Why is that any different than any other bill that we have to pay? You don't pay your car payment, you don't pay your house payment, you lose your car. You lose your house. If you're not paying for water, why should you get it?
The hosts condemned the U.N. officials' determination that the water shutoffs constituted a human rights violation, claiming the U.N. was making "a deliberate attempt to embarrass the United States."
Fox's indignation didn't extend to the commercial and industrial businesses similarly behind on their water bills -- as of July, the city had not reported which delinquent businesses had seen their service disconnected. According to recent reports, the Detroit Red Wings' hockey arena and the Detroit Lions' stadium owe tens of thousands in unpaid water bills but still have service.
Detroit's water shutoffs take the greatest toll on low-income residents, a significant number of people given that nearly 40 percent of the city lives below the poverty line. People are often forced to choose between paying for rent, electricity, or water, and the water department has recently increased the price of service by almost 10 percent. Beyond water being a basic necessity for life, the lack of access has other repercussions -- it could be grounds for child protective services to remove children from their homes.
Fox News misleadingly attributed a drop in McDonald's quarterly profits to widespread calls for a minimum wage increase, even though the company itself pointed to image problems as the major factor in the loss, not the minimum wage.
Fox Business host Maria Bartiromo appeared on the October 22 edition of Fox & Friends to discuss a 30 percent drop in McDonald's quarterly profits. Bartiromo and the hosts agreed that calls for a minimum wage increase caused profits to drop and forced McDonald's to turn to automation:
STEVE DOOCY: Meanwhile, McDonald's, the Golden Arches, reporting a 30 percent drop in corporate profits.
BRIAN KILMEADE: Why? Well, it turns out workers' wages might be to blame.
BARTIROMO: Well, the issue really is, this is the implication of raising the minimum wage for certain companies. I mean, something's got to give. The money comes from somewhere. At some point, a company will say, "OK, we have a higher expense rate because we are raising the minimum wage we've got to do something somewhere else." In this case, they are going to automation. They are changing certain jobs to computers.
AINSLEY EARHARDT: So it's really biting them in the tail. They were complaining, saying "we want more money," and as a result, McDonald's saying,"Hey, we're going to lose some of you guys, and we're going to replace you with machines.
Fox & Friends offered no evidence to connect calls for a minimum wage increase and the profit loss. In fact, McDonald's CEO Don Thompson "owned up to some corporate image problems" as an explanation for the drop in profits, according to Reuters. The AP also detailed the fast-food company's image problems:
One of its biggest challenges in the U.S. is long-held perceptions around the freshness and quality of its ingredients. The chain has been fighting to boost sales as people gravitate toward foods they feel are more wholesome. As a result, people have been gravitating to places like Chipotle, which markets its ingredients as being of superior quality.
The Fox hosts also left out another important detail -- earlier this year, Thompson announced McDonald's would "support legislation that moves forward" on a minimum wage increase:
McDonald's Chief Executive Don Thompson told students at Northwestern University's Kellogg School of Management that it could handle a theoretical bump in the minimum wage to, say, $10.10 an hour, the figure supported by President Barack Obama and others.
"McDonald's will be fine," Thompson said in the May 12 discussion. "We'll manage through whatever the additional cost implications are."
With two weeks to go before midterm elections, the North Carolina Senate race is on track to be the most expensive Senate race ever. But on Fox News, the focus is on spending by teachers unions, not the conservative-backed groups pouring money three times that amount into the state.
Fox News' America's Newsroom highlighted on October 21 how two prominent teachers unions, the American Federation of Teachers (AFT) and National Education Association (NEA), are "on track to spend a record amount this [campaign] cycle." Focusing specifically on the North Carolina Senate race, host Martha MacCallum asked, "What are the teachers unions doing there?" Correspondent Mike Emanuel noted that Democratic incumbent Sen. Kay Hagan is polling narrowly ahead of her Republican challenger Thom Tillis, as "the National Education Association super PAC has spent about $3 million on ads blaming Republican Tillis for making class sizes bigger and for reduced art and sports programs. Expect more of this down the final stretch," because Tillis is "a target."
With its focus on teachers unions, Fox conveniently left out the spending from outside groups that totals nearly three times more. For example, the North Carolina chapter of Americans for Prosperity, a conservative group backed by the Koch brothers has poured in at least $8.3 million in ad money. At least $6 million has come from groups linked to conservative Karl Rove, a Fox News contributor.
Such selective reporting on election spending is becoming standard for the network, which has worked to minimize the influx of money supporting Republican candidates into states with hotly-contested congressional races this election cycle.
From the October 20 edition of Fox News' The O'Reilly Factor:
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Fox News hyped a Watchdog.org study purporting to show Colorado recipients of government assistance programs accessed the government funds from exotic, out-of-state locations, suggesting the recipients were on lavish vacations. But Fox's report failed to mention that the study found only two percent of withdrawals were made outside of Colorado.
An October 6 Watchdog.org report found that $3.8 million was withdrawn by Colorado recipients of the Temporary Assistance for Needy Families program (TANF), commonly referred to as "welfare," outside the state in the past two years. The study cited some of the more "exotic" places where these withdrawals had occurred, such as Las Vegas, Hawaii and the Virgin Islands.
Fox hyped the study on the October 8 edition of Fox and Friends. Co-host Elizabeth Hasselbeck interviewed Colorado State Representative Tim Dore (R) about the report, asking him how he plans to "specifically stop this spending of hard-earned tax dollars on vacation spots and strip clubs?"
Later, Special Report host Bret Baier covered the study claiming "your tax dollars are helping welfare recipients enjoy vacations at some very exotic destinations."
But Fox's coverage failed to note that Watchdog.org's study found that out-of-state withdrawals represented just 2 percent of Colorado program recipients' ATM withdrawals, and only 1.7 percent of withdrawals outside states bordering Colorado. The purported abuse is even more absurd for the specific destinations Fox highlighted: the $6,451 withdrawn in Hawaii, for example, represents 0.003 percent of the $170 million total.
Fox has a history of hyping misleading stories to demonize government assistance. Last month, Fox & Friends falsely claimed that TANF money in Colorado was being used to buy marijuana, leading to the passage of two pieces of legislation in the United States House of Representatives.
From the October 7 edition of Premiere Radio Networks' The Rush Limbaugh Show:
From the October 3 edition of Premiere Radio Networks' The Rush Limbaugh Show:
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On the October 2 edition of Fox News' The Real Story, host Gretchen Carlson was surprised to find out that President Obama called out Fox News' Obamacare coverage during a speech. Carlson asked reporter Ed Henry "Why? My question to you, Mr. Henry, is why would he do this?"
President Obama delivered a speech on the economy at Northwestern University today, during which he brought up the Republican party's inability to focus their campaigns on attacking the Affordable Care Act (ACA), pointing out that contrary to Fox News' coverage, the health care law is working well:
So I laid out what I know has happened over the six years of my presidency so far, and I've laid out an agenda for what I think should happen to make us grow even better, grow even faster. A true opposition party should now have the courage to lay out their agenda, hopefully also grounded in facts.
There's a reason fewer Republicans are preaching doom on deficits -- it's because the deficits have come down at almost a record pace, and they're now manageable. There's a reason fewer Republicans you hear them running about Obamacare -- because while good, affordable health care might seem like a fanged threat to the freedom of the American people on Fox News -- (laughter) -- it's turns out it's working pretty well in the real world.
Carlson was confused as to why the president called out Fox News, but perhaps the reason is that just last week the network revived the debunked death panel myth amid news that Obamacare was working. As Vox reported, although the health care law is working "in the real world," in conservative media it's a disaster:
[C]osts are lower than expected, enrollment is higher than expected, the number of insurers participating in the exchanges is increasing, and more states are joining the Medicaid expansion. Millions of people have insurance who didn't have it before. The law is working. But a lot of the people who are convinced Obamacare is a disaster will never know that, because the voices they trust will never tell them.
This post has been updated for accuracy.
Fox News misled viewers about trends in household income, job creation, and the use of food stamps while claiming that President Obama's policies are to blame for a supposedly stagnant economy.
During an interview that aired on the September 28 edition of CBS' 60 Minutes, Obama argued that the United States "is definitely better off" economically than it was when he took office in 2009. The president said he would compare the success of his response to the "terrible, almost unprecedented financial crisis" that he inherited to the response by "any leader around the world."
On the September 30 edition of Fox & Friends, co-host Steve Doocy and Fox Business anchor Stuart Varney attempted to refute Obama's claim of economic achievement over the past six years, citing three major indicators -- household income, part-time job creation, and food stamp participation -- to make their case.
In each instance, Fox cherry-picked data to obscure positive trends in the overall economy:
News of a massive student protest in Colorado against a "conservative-led school board proposal" has prompted Fox News to rethink its stance on student freedoms.
Earlier this week, hundreds of students across six high schools in Arvada, Colorado, walked out of their classrooms amid news of a "conservative-led school board proposal to focus history education on topics that promote citizenship, patriotism and respect for authority." The Associated Press reported that the curriculum proposal would establish a committee to ensure certain history materials "don't 'encourage or condone civil disorder, social strife or disregard of the law'":
Student participants said their demonstration was organized by word of mouth and social media. Many waved American flags and carried signs, including messages that read "There is nothing more patriotic than protest."
The school board proposal that triggered the walkouts in Jefferson County calls for instructional materials that present positive aspects of the nation and its heritage. It would establish a committee to regularly review texts and course plans, starting with Advanced Placement history, to make sure materials "promote citizenship, patriotism, essentials and benefits of the free-market system, respect for authority and respect for individual rights" and don't "encourage or condone civil disorder, social strife or disregard of the law."
On September 25, Fox & Friends hosted Ken Witt, president of the Jefferson County Board of Education, which oversees the Arvada schools, to discuss the protests. Amid chyrons like "Political Pawns" and "Teachers Are Using Students," Witt alleged that the real issue was not the history curriculum proposal, but rather the upcoming teachers union contract :
WITT: That's the unfortunate situation that's going on. I believe that there is a significant amount of union conflict right now that we would like to not have. The issue is that it's easy to get children out. It's easy to use kids as pawns and it's not right. We have a union contract that's expiring in August of this year.
Co-host Elisabeth Hasselbeck parroted Witt's allegations, saying, "What concerns me is that what I'm hearing from you, and correct me if I am wrong, is that there is someone else behind this planting it and using these students for their own gain."
Conservative media figures have been attacking climate change policies by claiming that they would harm the poor. But their feigned concern contradicts previous attacks on aid for the poor -- and the climate policies in question would actually help developing countries the most.
On September 23, President Obama spoke at the United Nations' climate summit to call for strong international action on climate change. His remarks were immediately met with mockery and criticism in conservative media, with Rush Limbaugh and Fox News' Greg Gutfeld claiming that climate action would hurt the poor. On Fox News' The Five, co-host Gutfeld complained that climate action is a way for "rich people" to "deny" resources to others, going on to say "there are no poor people in this fight." And on the September 23 edition of Limbaugh's show, Rush ranted that climate change regulations are going to keep "[t]hird world countries" poor:
LIMBAUGH: Do you know who these climate change regulations, this dream of limiting carbon emissions, do you know who it'll really affect? Third world countries are going to be kept poor. They are not going to be allowed economic growth.
So all of these things Obama and his buddies are dreaming about would keep poor people poor, and never allow them to make their way up.
But Limbaugh and Gutfeld -- and many conservative media pundits -- have a history of attacking policies that would help the developing countries for which they claimed to express concern. Limbaugh previously denounced United States' international aid efforts, lamenting that the U.S. is "practically the only one loaning any money" despite the fact that U.S. international aid programs at the time were less generous than some from other countries. Limbaugh also likened a United Nations Development Programme proposal to finance global problems to "rap[ing] the U.S. for $7 trillion."
Meanwhile, Gutfeld has mocked the serious security threat that small islands face from rising sea levels due to climate change, despite that many experts have determined that small islands "are expected to lose significant proportions of their land," and that many will become uninhabitable if global warming continues unabated. One such small island resident, Kathy Jetnil-Kijiner from the Marshall Islands, delivered a moving poem during the U.N. climate summit about how climate change could impact her child, and has impacted many nations already: