OK, one more point about Howard Kurtz's fact-checking segment yesterday. Earlier, Eric Boehlert noted that Kurtz seemed to go out of his way to find a reason to slap a Democrat on the wrists, and I showed that his "fact-checking" of Bill Clinton and Tim Geithner wasn't actually a fact-check. So how did Kurtz do with Republican Senate Minority Leader Mitch McConnell? Not well.
On the April 18 CNN broadcast of State of the Union With Candy Crowley, McConnell reiterated his contention that Senate financial reform legislation is "a bailout fund that sort of guarantees in perpetuity that we will be intervening once again to bail out these big firms."
Politifact concluded that similar claims by McConnell at a press conference a few days earlier were "false," noting:
the "bailouts" at issue are those for the small number of very large, highly interconnected institutions -- those sometimes called "too big to fail" because their collapse would severely impact the rest of the economy.
The legislative language says that the money must be used to dissolve -- meaning completely shut down -- failing firms.
Sen. Bob Corker, a Republican, helped draft the orderly liquidation measures in the bill, and he has been arguing against McConnell's assertions that the bill allows bailouts.
He was asked about the bill on MSNBC's Morning Joe on April 20. "Does it ensure future bailouts as Mitch McConnell suggests?" asked host Joe Scarborough.
"There are some loopholes in the bill, no question," Corker replied. "But generally speaking, the central elements of the bill absolutely do the opposite."
Corker gave an extended speech on the floor of the Senate the day before, discussing many details of the bill, including the $50 billion fund.
"This fund that has been set up is anything but a bailout," Corker said. "It has been set up in essence to provide upfront funding by the industry so that when these companies are seized, there is money available to make payroll and to wind it down while the pieces are being sold off."
In ruling on McConnell's statement, that financial reform "actually guarantees future bailouts of Wall Street banks," we base our ruling primarily on the legislation. It clearly states that the intention is to liquidate failing companies, not bail them out. To do that, it creates a fund with contributions from financial firms, not from taxpayer funds. We do not see any element of the bill that expressly permits ongoing, "endless" outlays from the federal treasury. Is it possible that liquidation may cost the government money, potentially more money than is allowed for in the bill? Yes. But even so, McConnell is using seriously overheated rhetoric. Nothing in the bill "guarantees" future bailouts of Wall Street banks. We rate his statement False.
But Howard Kurtz looked at McConnell's claims on CNN -- and declared them true, criticizing the GOP leader only for misquoting former Labor Secretary Robert Reich:
KURTZ: That last part is not true. Robert Reich said the bill preserves the possibility that the Fed could launch another bank bailout, but that, he says on his blog, has nothing to do with the liquidation fund.
Reich now writes, "When Mitch McConnell has to misquote me to find evidence he's telling the truth, he is desperate. No, Senator, I never said Dodd's finance reform bill contains a bailout fund."
McConnell's other points are true. "A "Washington Post" editorial said McConnell is partially right about the fund for failing banks. It wouldn't be taxpayer money, but, "Of course the big banks would find some way to pass that cost along." And McConnell is right that Geithner himself warned months ago that such a fund would create an expectation that the government would rescue insolvent banks.
Based on Politifact's research -- and Corker's statements -- it looks like McConnell's claims on CNN about the legislation were wildly misleading, even "false." But Kurtz says only that McConnell misquoted Reich, and that the rest of what he said was "true." Why? Because a Washington Post editorial said he was mostly right.
Put it all together, and here's what you have: Kurtz went out of his way to portray something Bill Clinton said as false, even though it was true. He portrayed as false an utterly insignificant comment by Tim Geithner, without actually establishing that it was false. And he bent over backwards to find something Mitch McConnell said that he could portray as true, while ignoring the fact that McConnell's comments over all were, according to Politifact's research, false.