Fox News contributor Charles Payne falsely claimed that the Cyprus banking crisis could happen in the U.S., describing the Cypriot financial situation as the natural "end game" for all nations in debt and in need of a bailout. The realities of the U.S. economy, however, delegitimize Payne's comparison.
On Monday, the European Central Bank (ECB) approved a bailout for the island nation of Cyprus, with the caveat that roughly six billion euros of the total 16 billion euros in requested funds be financed through a tax on savings deposits at Cypriot banks. Lawmakers did not approve the controversial measure, but are facing pressure from the ECB to reach a deal by Monday or risk a cutoff of financing for Cypriot banks.
Earlier this week, the island nation of Cyprus considered bailing out its indebted banks with the help of a onetime tax on all deposits. Lawmakers did not approve the controversial measure, but are facing pressure from the European Central Bank to reach a deal this week or risk a cutoff of financing for Cypriot banks.
On the March 22 edition of Fox's America's Newsroom, contributor Charles Payne discussed the Cypriot debt crisis, falsely claiming that, "Constitutionally, you definitely could see it happen here." Payne concluded the segment by warning that Cyprus is a "cautionary tale," which proves that "when a country gets its back against the wall to a certain degree, anything can happen, and ultimately, even the biggest empires in the world, including America now, aren't immune from that."
But Payne's fear mongering ignores significant differences between the banking and deposit insurance systems in Cyprus and the U.S., realities even Fox Business host Stuart Varney has reluctantly acknowledged.
CNBC reported that unlike Cyprus and other European nations that have borrowed in a currency controlled by the ECB, "the U.S. is the issuer of the currency in which its debt is denominated." Because Cyprus cannot issue currency to pay off its debt, it must accept the conditions imposed by the ECB. However, as economist Paul Krugman noted when commenting on right-wing comparisons of the U.S. to Greece, the U.S "literally can't run out of money. After all, it can print the stuff. So there's almost no risk that America will default on its debt." The very structure of the U.S. economy precludes it from needing to accept draconian measures imposed by a central bank outside the U.S.
CNBC also illustrated a fundamental difference between the Cypriot and U.S. economies, citing former president of the Dallas Fed Bob McTeer:
There are other fundamental differences between the U.S. and Cyprus. For one, the U.S. does substantial financing through its capital markets and is not as reliant on banking. "In the U.S. the dog is the economy and the banking system is the tail," McTeer said. "In Cyprus it's the other way around apparently. The banking system was bloated relative to their overall economy."
Since the bloated banking system in Cyprus is what ultimately caused the need for a bailout from the ECB, using the Cypriot crisis to stoke fears about government seizure of private funds in the U.S. further misses the mark.
Another key distinction of the U.S. system is the Federal Deposit Insurance Corporation (FDIC), which according to CNBC "has never lost money backing deposits. Although the banks had to borrow money, the banks are better capitalized than they were before the crisis."
Even Fox's Stuart Varney has backed away from claims that the U.S. government could follow Cyprus and seize private bank accounts. On the March 18 edition of Fox's America's Newsroom, Varney suggested that U.S. citizens had reason to fear for their bank accounts, saying, "Who's next? Which other governments which have run up enormous debt will also go towards begin seizing private bank accounts? Who else is next? Maybe Spain? Maybe Italy? How about America?" However, Varney negated his own argument on The Sean Hannity Show the following day, saying that a run on the banks is "possible in Europe, but I doubt it in America [...] your money in a bank account, you think it's safe, I believe it is safe in America, but elsewhere in the world, it's clearly not."
A trio of Fox Business commentators attacked Sen. Elizabeth Warren's (D-MA) advocacy for an increased federal minimum wage by wildly mischaracterizing comments she made during a Senate committee hearing. In addition to incorrectly implying that Warren is advocating for a $22 per hour minimum wage, the panelists dismissed the need for any increase in the minimum at all by relying on misinformation and distorted arguments.
At a March 14 hearing on the ties between economic growth and the federal minimum wage, Warren said that if minimum wage had been pegged to productivity as it had increased from 1960 until now, "the minimum wage today would be about $22 an hour."
On the March 19 edition of Varney & Co., host Stuart Varney and two guests, Fox Business contributor Charles Payne and Fox Business reporter Sandra Smith, mischaracterized Warren's statement to claim she was advocating for raising the minimum wage to $22 per hour. For instance, Smith claimed that Warren is "fighting for you to make $22 an hour."
Payne also misleadingly suggested Warren's numbers were incorrect by comparing the $22 figure -- which is tied to worker productivity -- to the unrelated metric of inflation.
In fact, as the Huffington Post noted, Warren was not making the case for raising the minimum wage to $22, but was in fact referring to a study by the Center for Economic and Policy Research (CEPR) that supports her position that an increase in the minimum wage is overdue. According to the CEPR study, "Between the end of World War II and 1968, the minimum wage tracked average productivity growth fairly closely. Since 1968, however, productivity growth has far outpaced the minimum wage. If the minimum wage had continued to move with average productivity after 1968, it would have reached $21.72 per hour in 2012 - a rate well above the average production worker wage."
Payne also claimed that the minimum wage is not meant to support a family and is usually earned by teenagers, saying: "This is a stepping stone. This is not something that -- it was never designed for people to live on, per say." But according to the Bureau of Labor Statistics, just over half of all workers receiving the federal minimum wage in 2011 were aged 25 and above For her part, Smith also repeated the myth that raising the minimum wage will kill jobs, but numerous studies show that's not true.
From the March 9 edition of Fox News' Cavuto on Business:
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Sunday's "Forward On Climate" rally drew an estimated 35,000 people to Washington, DC to protest the Keystone XL pipeline, making it the largest climate rally in U.S. history, according to organizers. Every major news outlet covered it, putting a national spotlight on the environmental risks associated with the project. But Fox News used the rally as an opportunity to mock the protesters and cast doubt on the science of climate change.
On his Fox News show, Neil Cavuto suggested that it was "bad optics" to "protest global warming in the middle of this Arctic blast." Fox Business' Charles Payne claimed that the protesters "probably have done very little research" and are relying on "anecdotal" evidence of climate change:
But by pointing to cold weather in Washington, Fox News was actually the one using an anecdote to dispute the long-term warming trend.
As congressional leaders debate a framework for comprehensive immigration reform that will likely grant undocumented immigrants legal status, conservative media are engaged in promoting myths and falsehoods about what reform means for the country.
Fox's Charles Payne attacked President Obama for stoking fears about the debt ceiling and blamed him for the economic consequences. But experts agree that Obama's concerns are justified, as failing to raise the debt limit could lead to higher deficits, and higher interest rates, which could have dire consequences for the economy.
During a January 14 press conference, President Obama warned that failure to raise the debt ceiling "would be a self-inflicted wound on the economy."
On the January 14 edition of Fox News' America Live, Fox Business contributor Charles Payne responded by claiming the debt ceiling debate would not be having an effect on the economy if the president "weren't going on a cross country tour, if you weren't doing these -- if you weren't hyping it." Payne went on to accuse Obama of "helping stoke the flames" of economic uncertainty by informing people about the debt ceiling:
In The Washington Post, Fox News contributor Charles Krauthammer admitted that right-to-work laws lead to lower wages for workers -- conflicting with the narrative promoted by Fox News that such laws increase wages.
In his column, Krauthammer claimed that recently passed right-to-work laws in Michigan were "inevitable" and that "the entire Rust Belt will eventually follow because the heyday of the sovereign private-sector union is gone." Krauthammer wrote that such laws could possibly bring down unemployment, but he also admitted that President Obama's statement that right-to-work laws give workers "the right to work for less money" was correct:
Principle and hypocrisy aside, however, the president's statement has some validity. Let's be honest: Right-to-work laws do weaken unions. And de-unionization can lead to lower wages.
Obama calls this a race to the bottom. No, it's a race to a new equilibrium that tries to maintain employment levels, albeit at the price of some modest wage decline. It is a choice not to be despised.
I have great admiration for the dignity and protections trade unionism has brought to American workers. I have no great desire to see the private-sector unions defenestrated.
Right-wing media falsely claimed that workers at organized work places are compelled to pay dues that go toward union political activities and that so-called "right-to-work" legislation in Michigan would give workers a choice about paying for these activities. In fact, workers at unionized work places already can choose whether to pay for political activities of their union.
The Republican-majority Michigan legislature today approved a so-called "right-to-work" law that would significantly reduce the power of organized labor in that state. The legislation prohibits unions from collecting dues from nonunion employees.
Fox has been aggressively defending this "right-to-work" law, falsely claiming it will benefit workers and the state economy and touting it as a "victory for capitalism." The network continues to defend this type of legislation despite the fact that "right-to-work" laws have had a significant and negative effect on state economies, employment, and employee compensation.
Here, Media Matters looks at some of the worst anti-union rhetoric from Fox.
From the December 11 edition of Fox News' America's Newsroom:
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In an effort to discredit President Obama's plan to increase taxes on the wealthy, conservative media outlets have pushed a number of myths to suggest that a large number of Americans will be negatively affected. In reality, only a small percentage of taxpayers would be affected by Obama's proposals.
From the November 20 edition of Fox News' Your World with Neil Cavuto:
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Fox News revealed its closing argument against President Obama, which consisted of a falsehood-laden attack on the president's record.
The right-wing media falsely reported that Alabama-based utility companies were turned away in New Jersey for hurricane disaster relief because they use non-union labor. However, multiple Alabama utility companies mentioned in these media reports say the claims are "rumors" and simply "not true," and New Jersey utility companies have also denied that non-union working crews have been turned away.
Local Alabama news station WAFF was quoted in multiple right-wing news reports after it claimed that three utility crews from Alabama were not allowed to help with storm aid in New Jersey because they were non-union. Predictably, Fox News picked up the report almost immediately. During the November 2 edition of Fox & Friends, the hosts asserted that non-union crews were not allowed to help in New Jersey hurricane relief, and frequent guest Charles Payne added that this is "one of the more despicable aspects of what we are seeing":
Following this report, Drudge linked to other right-wing websites making similar claims under the headlines "Non-union crews turned away from NJ..." and "'No Red Tape'?":
Later on Fox, host Gretchen Carlson issued a minor update explaining that many of their viewers had in fact seen Alabama crews working in New Jersey.
WAFF, the source of the original reports, has since updated its post about these claims. It continues to report claims from an Alabama-based Decatur Utilities employee that his crew was presented with documents by the International Brotherhood of Electrical Workers (IBEW) that required union affiliation in order to provide disaster relief. However, WAFF clarifies that Decatur Utilities' general manager said crews "were not turned away but were made to believe that affiliating with the union was a requirement to work."
From the November 2 edition of Fox News' Fox & Friends:
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