Fox News host Neil Cavuto stated that an October 23 report in Barron's that predicted the GOP would retain control of both houses of Congress in the midterm elections was "a possible reason for the uptick" in the stock market that day while not challenging Barron's Washington bureau chief Jim McTague -- who declared, "[T]he numbers don't lie" -- about the false suggestion in the Barron's report that it has used a consistent methodology in predicting Republican victories in 2002, 2004, and now in 2006.
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On the October 23 edition of Fox News' Your World, host Neil Cavuto stated that an October 23 report in Barron's that predicted the GOP would retain control of both houses of Congress in the midterm elections was "a possible reason for the uptick" in the stock market, after noting earlier in the program that the Dow Jones industrial average had topped 12,100. Cavuto then hosted the author of the report, Barron's Washington bureau chief Jim McTague, who responded: "I didn't know I could move markets." When asked by Cavuto about how Barron's came to its conclusions, McTague declared: "[T]he numbers don't lie," and later stated, "I was trying to take the emotion out of the prediction," rather than relying on "my gut" like the "Sunday talk show" pundits. Cavuto did not challenge McTague's declarations by noting, as Media Matters for America documented, that Barron's falsely suggested it has used a consistent methodology in predicting Republican victories in 2002, 2004, and now in 2006.
From the October 23 edition of Fox News' Your World with Neil Cavuto:
CAVUTO: Up and up we go -- a Fox News alert -- the Dow over another milestone, first 12,000, now 12,100, now specifically 12,113.71, a gain of better than 111 points, kicking the week off at another all-time high.
CAVUTO: Now to what was happening today and a possible reason for the uptick, dramatic as it was today. Jim McTague, the Washington bureau chief for Barron's, as he typically does, creating waves with a cover story that presented this bit of lunacy -- that the Republicans hold on to the House, hold on to the Senate. And all of this talk that they lose big in a little bit more than two weeks, well -- wrong. And before you dismiss what he says, Jim's been right on so many other issues that I could go on and on and waste his time on this show talking about it. Jim, good to have you, first of all.
McTAGUE: Well thank you. It's fun to be back here, and I didn't know I could move markets. Thank you for that.
CAVUTO: Apparently you have that effect, but let me ask you about how you came to a conclusion that flies in the face of almost all others.
McTAGUE: Yeah, well the numbers don't lie. I've been doing this for two election cycles now, and it's not original, Neil. You know, you learn back in college that the guy with the most money normally wins the election, and if you look at House races back to 1972, the success rate of using money as a predictor is 92 percent. It's 98 percent in recent races, and if you look at Senate races, the success rate is about 90 percent.
CAVUTO: Still, still there are times when that 8 percent stands out. In 1958, in 1974, in 1994 the incumbent party presumably had the money, but it wasn't good enough to carry the election, so a lot of people, as you know, Jim, is saying, history is going to repeat itself now. What do you say?
McTAGUE: Well, you know they say that people are angry like they were in those years, but they were angry for different reasons in those other three elections. They were all angry because the economy was so rotten, and I think the economy is pretty good right now. There are people who will disagree with that, but I think that as angry and upset as people are with the Republicans, and with Bush, they're not angry enough to throw the elephant out the window.
CAVUTO: But were they angry with the economy in 1994?
McTAGUE: Yeah, we were just coming out of a recession and the month before the election disposable income took a nosedive. Disposable income is an excellent indicator of voter satisfaction, and it's been going along at a decent clip all this year.
CAVUTO: In fact, that was the most interesting revelation in your piece, that that's sort of like the unheralded barometer on how elections go.
CAVUTO: Disposable income, in other words, how much folks at home are left with. We've heard much about this dichotomy between the haves and have-nots and that their disposable income is really wanting. You're saying quite the opposite, right?
McTAGUE: Yes I am, and again I'm relying on numbers.
McTAGUE: I was trying to take the emotion out of the prediction and -- because, you know, when I watch these Sunday talk shows, I hear all these pundits talking about, you know, "My gut tells me this" and "My gut tells me that." I'm trying to get rid of my gut.
CAVUTO: I've been doing that all my life to little avail, Jim. But thank you very much, good having you back.
McTAGUE: Thank you.