Economy

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  • Major Newspapers Fail To Grasp Severity Of Putting Andy Puzder In Charge Of Labor Department

    Blog ››› ››› CRAIG HARRINGTON

    Initial reporting on the president-elect’s selection of fast-food CEO Andy Puzder to replace Tom Perez as the next secretary of labor depicted Puzder as a “vocal” critic of Obama administration policies while failing to note the conservative media-fueled inaccuracies that inform the incoming secretary’s anti-worker views.

    On December 8, The Wall Street Journal was first to report that President-elect Donald Trump planned to name Puzder -- the CEO of CKE Restaurants, which owns the Carl’s Jr. and Hardee’s burger chains -- as the incoming labor secretary in his administration. The Journal’s report, and subsequent reporting from The New York Times, Los Angeles Times, and USA Today, focused mostly on Puzder’s opposition to specific economic initiatives from the Obama administration -- raising the minimum wage, expanding overtime protections, and extending the scope of the Affordable Care Act (ACA) -- while failing to mention that Puzder’s arguments against each have been widely discredited:

    • The Journal reported that Puzder is a “vocal advocate for cutting back regulations,” which he claims “have stifled growth in the restaurant industry,” and concluded with the acknowledgment that Puzder has used the Journal’s own opinion pages to discuss “topics such as the negative effects of President Obama’s health-care law and of broad increase in minimum wage.”
    • The Times noted that Puzder believes “large minimum wage increases hurt small business and lead to job loss among low-skilled workers,” adding that he believes the ACA created a so-called “restaurant recession” by reducing disposable incomes that American workers would otherwise “spend dining out.”
    • The LA Times claimed that Puzder opposes raising the federal minimum wage to $15 per hour “because he thinks that would cost many low-wage workers their jobs,” and quoted a Forbes op-ed published by Puzder on May 18 that alleged the Obama administration had created an “extensive regulatory maze” with overtime and health care reforms that drive up labor costs and “reduced opportunities, bonuses, benefits, perks and promotions” for workers.
    • USA Today’s synopsis was much less extensive, merely labeling Puzder as “a major critic of what he calls unnecessary federal regulations, including a proposed hike in the federal minimum wage” before moving on to other rumored Trump appointments.

    Despite amplifying Puzder’s criticism of progressive economic policies, none of the outlets saw fit to mention that his arguments are wrong.

    First, Obama-era regulations have not “stifled growth in the restaurant industry” or created a “restaurant recession.” According to data from the Bureau of Labor Statistics (BLS), employment in the restaurant industry is up more than 20 percent since Obama took office in January 2009:

    Second, while it is true that Puzder is an ardent opponent of increased minimum wages -- he once argued that modest wage increases actually encourage low-wage workers to game the system so they can stay in poverty -- it is important to note that his arguments are unfounded. Puzder and other right-wing media personalities have waged a campaign of misinformation against raising the minimum wage, claiming that it hurts businesses and kills jobs. In reality, reliable professional studies of the minimum wage consistently find a negligible relationship between the minimum wage and employment activity.

    As is the case with Puzder’s opposition to living wages, the incoming labor secretary’s antagonism toward the ACA is also not based in facts. Right-wing media outlets and allied politicians have spent years claiming that President Obama’s signature health care reform law is hurting the economy and stymieing the job market despite all evidence to the contrary. In reality, Obamacare has reduced the uninsured rate to historic lows, has reduced medical debt and benefited public health outcomes while strengthening the economic security of low-income families.

    Finally, Puzder’s opposition to expanded overtime protections amounts to little more than retooled talking points generated by right-wing media. Conservative media outlets opposed President Obama’s proposed overtime expansion before they even knew the details, claiming it threatened to undermine American work ethic and turn the country into Greece. Puzder’s claim that a “regulatory maze,” which includes overtime expansion, has “reduced opportunities, bonuses, benefits, perks and promotions” ignores the obvious economic benefits of paying millions of American workers for the hours they actually work and that the overtime threshold “has the advantage of simplicity” that makes it efficient for employers to implement.

    Media Matters outlined the many ways media should approach his troubled relationship with the truth. If coverage today is any indication, major outlets still have a lot to learn.

  • Reports Show Trump May Have Had Little To Do With SoftBank Deal He Took Credit For

    ››› ››› CRAIG HARRINGTON & ALEX MORASH

    On December 6, President-elect Donald Trump credited his election victory for spurring Japanese telecommunications and technology giant SoftBank to propose a $50 billion investment in the United States, which he claimed would create as many as 50,000 jobs. Later reporting from The Wall Street Journal and others debunked Trump’s boasts, but not before numerous media outlets amplified his unsubstantiated claims.

  • 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.