Fox News' Neil Cavuto did not challenge Tony Snow's false claim that "since the president cut taxes in 2003, the Dow Jones is up 60 percent. The Nasdaq is up 80 percent." But even under the most favorable criteria, Snow's statistics are plainly wrong. And when adjusted for inflation, the value of both stock indices has decreased since President Bush's first major tax cut package in June 2001.
On the October 20 edition of Fox News' Your World, host and Fox News managing editor of business news Neil Cavuto failed to challenge White House press secretary Tony Snow's false claim that "since the president cut taxes in 2003, the Dow Jones is up 60 percent. The Nasdaq is up 80 percent." In fact, even without adjusting for inflation, the Dow Jones industrial average and Nasdaq Composite index have grown at nowhere near the rate that Snow alleged since Bush's second major round of tax cuts in 2003. Moreover, when adjusted for inflation, the value of both stock indices has decreased since President Bush's first major tax cut package in June 2001.
Without adjusting for inflation, the Dow, which closed at 12,002.37 on October 20, has grown 37 percent, not 60, over its opening level on May 28, 2003, when President Bush signed the Jobs and Growth Tax Relief Reconciliation Act of 2003. That law temporarily eliminated taxes on dividends and lowered capital gains tax rates from 20 to 15 percent. In the same time period, the Nasdaq, which closed at 2,342.30 on October 20, has grown 50 percent, not 80 percent. When adjusted for inflation using seasonally-adjusted Consumer Price Index data from the Department of Labor's Bureau of Labor Statistics (BLS), the Dow has grown 24 percent over its May 28, 2003, opening level, and the Nasdaq has grown 26 percent.*
Moreover, Snow cherry-picked his point of comparison. He compared current stock index levels to May 2003, when they were nearer to their most recent low point, rather than June 2001, when Bush signed his first large tax cut package, the Economic Growth and Tax Relief Reconciliation Act of 2001. Since Bush signed that first set of cuts, the Dow is up 8.4 percent, and the Nasdaq is up 6.1 percent. Adjusted for inflation, however, the Dow has decreased by 4.9 percent since June 2001, while the Nasdaq has decreased by 7 percent.*
Cavuto also left unchallenged Snow's false claim that the news media had not covered "the news that the Dow Jones industrial average, for the first time, had gone past 12,000." "Nobody talks about it," Snow asserted. In fact, the news that the Dow closed above 12,000 on October 19 was reported by many major media outlets, according to a search of the Nexis database. For example, the Dow's close was mentioned on all three broadcast networks' October 19 evening news programs; the October 19 editions of CNN's Lou Dobbs Tonight and The Situation Room, and the October 20 edition of CNN's American Morning. The Dow's close was also the subject of October 20 articles in the Los Angeles Times and The New York Times, as well as October 19 and 20 reports by the Associated Press.
Fox News touts Your World as "the No.1 business news show on cable."
*Inflation based on CPI-U price index. This assumes that there has been zero inflation since September 2006, the latest month for which BLS has provided Consumer Price Index data.
From the October 20 edition of Fox News' Your World with Neil Cavuto:
CAVUTO: All right. I want to switch gears and talk about what's been a remarkable week in the stock market. As you know, Tony, we hit record after record, crossed over Dow 12,000, first time in history. Those averages are up appreciably, I think the Dow 13 percent, year to date.
A lot of folks making a lot of money, yet, it doesn't seem to connect in the polls for Republicans. What do you make of that?
SNOW: Well, one of the things I make of it is, nobody talks about it. There was one network last night that -- not Fox -- but, believe it or not, devoted exactly 10 seconds to the news that the Dow Jones industrial average, for the first time, had gone past 12,000.
But, you know, I think people -- people kind of get it, if they think about their own experiences. And I think we need to be talking about it more, that is, the White House and Republicans, because you look back, since September 11 -- September 11th, we took a trillion-dollar economic hit. Since then, we've been through two wars, a corporate scandal, the worst national -- natural disaster in our history.
And, yet, since the president cut taxes in 2003, the Dow Jones is up 60 percent. The Nasdaq is up 80 percent.
But, maybe more importantly, people are starting to feel it now. They've got a little more money to save. They can -- you know, they can buy the iPod for their kids, or they can save a little more for education.
You just -- after a while, you get the notion that, "Hey, I can buy a little more than before."
CAVUTO: But, so, let me ask you this.
SNOW: "I can -- I can redo my mortgage."
CAVUTO: Let me ask you this, Tony. I mean, are there, or are you aware of internal tracking polls that do take that into account, that people have seen what's been happening on Wall Street, how it might be reflective of a good economy, and that that is not being represented in some of these polls, and that are maybe skewing very negative for Republicans right now?