Hannity, Hewitt revive bogus "Obama recession" claim

››› ››› MATTHEW BIEDLINGMAIER

On Hannity & Colmes, Sean Hannity and Hugh Hewitt rehashed the discredited claim that President-elect Barack Obama is to blame for recent declines in the stock market. In fact, analysts have cited economic data on dropping retail sales, increasing unemployment, and other significant factors to explain recent stock-market declines.

On the November 14 edition of Fox News' Hannity & Colmes, co-host Sean Hannity and syndicated radio host Hugh Hewitt rehashed the discredited claim that President-elect Barack Obama is to blame for recent declines in the stock market. As Media Matters for America noted in response to Hannity's earlier, similar claims, analysts have disputed the assertion that the market decline is attributable to Obama's election, citing other factors such as economic data on dropping retail sales and increasing unemployment.

During the broadcast, Hannity said: "I've said it myself. Dick Morris has said it. I think Rush has said it -- others. You know, this is really the Obama recession in this sense: That people that have money are looking at this, 'Look, if -- if he is true to his word, you know what? I'm getting out now.' And he's the only president that has seen this dramatic a decline in the stock market in the post-war era." Hewitt responded: "You're right. That -- it's been dramatic. The point drop in the Dow, the S&P, and the NASDAQ is called 'pricing in Barack Obama.' " Responding to co-host Alan Colmes' statement that "[a]ll business experts say it has nothing to do with Barack Obama," Hewitt asserted: "Alan, the Dow dropped four out of five days this week, three out of four days last week. ... [I]t's called 'pricing in Barack Obama.' " Hewitt later added: "[T]he markets are very smart. Markets are very, very savvy, and they are -- they reflect the actions of millions of investors, millions of whom have taken a look at President-elect Obama and his team of advisers and a Democratic Congress run by Nancy Pelosi and Harry Reid, and said, 'I'm going to park my money because there aren't enough Republicans to stop the worst excesses,' and they're afraid of Carter 2.0."

Contrary to the assertions by Hannity and Hewitt, analysts have cited economic data on dropping retail sales, increasing unemployment, and other significant factors to explain the decline of the stock market. For instance, according to a November 14 CNN.com article, the Commerce Department's retail report released on Friday, November 14 -- stating that retail sales dropped by 2.8% in October -- "helped drive down stocks Friday, which bolstered investment in the dollar." CNN.com further reported: "On Friday, the dollar got a boost as the Dow Jones industrial average was driven lower by both the retail sales report and job-cut announcements from major companies such as Sun Microsystems." From the CNN.com article:

The dollar climbed against the 15-nation euro and the British pound Friday, as fears of a major economic recession were rekindled by a dismal U.S. retail sales report and announcement of a euro-zone recession.

Investors sought the shelter of the U.S.-backed dollar, sending the euro down 1.7 cents to $1.26 from $1.277 on Thursday.

[...]

"Its a reminder of how challenging the economic circumstances are going to be," said Nick Bennenbroek, chief currency strategist with Wells Fargo.

Retail sales: According to the U.S. Department of Commerce, retail sales fell 2.8% in October, the largest percentage monthly drop on record, and worse than the 2.1% decline predicted by analysts.

The retail report confirmed statements made this week by major retailers such as electronics seller Best Buy (BBY, Fortune 500), whose chief executive called the months since September "the most difficult climate we've ever seen."

Equities: The poor retail report helped drive down stocks Friday, which bolstered investment in the dollar.

[...]

On Friday, the dollar got a boost as the Dow Jones industrial average was driven lower by both the retail sales report and job-cut announcements from major companies such as Sun Microsystems (JAVA, Fortune 500).

The Dow recovered some of its losses by mid-day, taking the edge off the dollar's rise against the euro, and actually reversing the dollar's position against the pound, but the dollar regained its strength again as the the [sic] Dow closed down nearly 4%.

Additionally, the Associated Press reported on November 17 that "Wall Street fluctuated Monday as investors digested more signs of economic weakness, including a huge round of layoffs in the financial sector." The U.S. Department of Labor's statistics on new unemployment claims showed more than 500,000 new claims in the week ending November 8 -- the week of the election -- an increase of about 32,000 claims from the previous week. The Wall Street Journal's MarketWatch website reported on November 13 that this represents the highest level of new jobless claims since September 2001:

Some economists are expecting the picture to worsen further, perhaps considerably. On Wednesday [November 12], economists at Wachovia said they don't expect the unemployment rate to peak until late in 2010 and at 9%. This would be the highest since 1983. The Wachovia economists said the U.S. economy's likely to experience a recession as long and severe as the downturns seen in 1973-75 and 1981-82.

Further, as Media Matters noted, a November 12 post on the Journal's MarketBeat blog stated that "[f]ollowing the brief pre-election euphoria that brought stocks up 17% in a six-day period, stocks have been sluggish since as investors focused, once again, on the lame economic data and the drumbeat of bailouts, potential bailouts, and worries about other bailouts."

Media Matters documented in the days immediately following the November 4 election several analysts on Fox News and Fox Business Network citing reasons independent of the election to explain the fall of the market, explicitly stating that they did not believe the market was reacting to Obama's election.

From the November 14 edition of Fox News' Hannity & Colmes:

HANNITY: The Wall Street Journal says that I've -- I've said it myself. Dick Morris has said it. I think Rush has said it -- others. You know, this is really the Obama recession in this sense: That people that have money are looking at this, "Look, if -- if he is true to his word, you know what? I'm getting out now." And he's the only president that has seen this dramatic a decline in the stock market in the post-war era. I mean --

HEWITT: You're right. That -- it's been dramatic. The point drop in the Dow, the S&P, and the NASDAQ is called "pricing in Barack Obama" --

COLMES: You can't blame Barack Obama for that, Hugh.

HEWITT: -- and it's been devastating.

COLMES: That's absurd. That's preposterous. I mean, this went down long before Barack was president-elect. It went up the day he was elected. It was up in anticipation of him being elected. All business experts say it has nothing to do with Barack Obama. It was the bad job numbers that came out. What are you talking about blaming the president-elect --

HEWITT: I'm talking about --

COLMES: -- for a bad stock market? That's crazy.

HEWITT: Alan, the Dow dropped four out of five days this week, three out of four days last week.

COLMES: On bad job numbers.

HEWITT: It's called pricing in Barack -- it's called "pricing in Barack Obama" and the anticipated deleterious effects on the economy that will come from his combination of tax policies and the Democrats' penchant for spending.

COLMES: That's absolutely absurd that you want --

HEWITT: Now, the markets are very savvy.

COLMES: -- to blame Democrats, Hugh. At least have some intellectual honesty here, because when George W. Bush was about to become president of the United States, and then he -- he caused the recession when he came in. But then you want to blame Clinton for that, and he was the outgoing president, but yet you want to blame the incoming president when it's Barack Obama. Clearly, that sounds quite partisan.

HEWITT: I'm not blaming anyone, Alan. I'm pointing to -- the markets are very smart. Markets are very, very savvy, and they are -- they reflect the actions of millions of investors, millions of whom have taken a look at President-elect Obama and his team of advisers and a Democratic Congress run by Nancy Pelosi and Harry Reid, and said, "I'm going to park my money because there aren't enough Republicans to stop the worst excesses," and they're afraid of Carter 2.0.

COLMES: You want to take no personal responsibility. We have a president who just spent three-quarters of a billion dollars in a bailout. That caused all kinds of problems. You got Henry Paulson; they're talking first about buying up bad mortgages, now investing in banks, the biggest government spending ever. And you want to blame Barack Obama for government spending that he hasn't even done yet when this president has done more government spending and had bigger government and has done the kind of thing you would call socialism if a liberal Democrat did it.

HEWITT: Alan, I don't call it socialism; I call it really bad tax policy.

HANNITY: Alan, can I get you a decaf?

COLMES: Please.

Posted In
Economy
Network/Outlet
Fox News Channel
Person
Sean Hannity
Show/Publication
Hannity & Colmes
Stories/Interests
Barack Obama, 2008 Elections
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