Heritage Foundation chief economist Stephen Moore was caught using incorrect statistics to mislead readers about the relationship between tax cuts and job creation in the United States.
On July 7, Moore published an op-ed in The Kansas City Star attacking economic policies favored by Nobel Prize-winning economist Paul Krugman. The op-ed claimed that "places such as New York, Massachusetts, Illinois and California ... are getting clobbered by tax-cutting states." Moore went on to attack liberals for "cherry-picking a few events" in their arguments against major tax cuts, when in fact it was Moore who cited bad data to support his claims.
On July 24, The Kansas City Star published a correction to Moore's op-ed, specifically stating that the author had "misstated job growth rates for four states and the time period covered." The editorial board of the Star inserted this annotation to Moore's inaccurate claims:
Please see editor's note at the top of this column. No-income-tax Texas gained 1 million jobs over the last five years, California, with its 13 percent tax rate, managed to lose jobs. Oops. Florida gained hundreds of thousands of jobs while New York lost jobs. NOTE: These figures are incorrect. The time period covered was December 2007 to December 2012. Over that time, Texas gained 497,400 jobs, California lost 491,200, Florida lost 461,500 and New York gained 75,900. Oops. Illinois raised taxes more than any other state over the last five years and its credit rating is the second lowest of all the states, below that of Kansas! (emphasis original)
On July 25, Star columnist Yael Abouhalkah explained the correction in more detail. Abouhalkah wrote that Moore had "used outdated and inaccurate job growth information at a key point in his article" and that Moore should have used data from 2009 to 2014, rather than from 2007 to 2012. Abouhalkah also argued that "the problems with Moore's opinion article damaged his credibility on the jobs issue."
Moore's credibility on "the jobs issue" is not the only troubling aspect of his economic punditry. Moore was recently brought on as the chief economist at the conservative Heritage Foundation after serving for many years on the right-wing editorial board of The Wall Street Journal and as a go-to economic commentator on Fox News. Moore has a history of disparaging reasonable economic policies in favor of fiscally irresponsible tax cuts for the wealthy and painful spending cuts to vital programs.
Moore has referred to unemployment insurance as a "paid vacation" for jobless Americans and bizarrely claimed that laws guaranteeing paid sick leave for full-time workers were "very dangerous for cities." Moore spent years basely claiming that the Affordable Care Act would reduce job creation, seamlessly transitioning from one debunked talking point to the next along the way. He is also an outspoken opponent of increasing the minimum wage, claiming that even a moderate rise in wages would result in a "big increase" in unemployment. In a recent foray out of the safety of right-wing media, Moore's anti-living wage spin was easily cut down by CNN anchor Carol Costello.
The original intent of Moore's Star op-ed was to garner support for tax cuts enacted over the past two years by Gov. Sam Brownback (R-KS), which The New York Times and other outlets have labeled "ruinous." The tax cuts have been such a dramatic failure that more than 100 members of the Kansas Republican Party have sworn to help replace Brownback with a Democrat willing to reinstate taxes and spending at their previous levels.
Fox News cherry-picked comments made by former President Bill Clinton on his questions regarding the Commerce Department's plan to transition internet domain name management to an international body. But the plan is based on principles that echo Clinton's remarks.
In a March 14 press release, the Commerce Department's National Telecommunications & Information Administration (NTIA), an Executive Branch agency that advises the President on telecommunications and information policy issues, announced the administration's plan to transition internet domain name functions:
To support and enhance the multi-stakeholder model of Internet policymaking and governance, the U.S. Commerce Department's National Telecommunications and Information Administration (NTIA) today announces its intent to transition key Internet domain name functions to the global multi-stakeholder community.
From the inception of ICANN, the U.S. Government and Internet stakeholders envisioned that the U.S. role in the IANA functions would be temporary. The Commerce Department's June 10, 1998 Statement of Policy stated that the U.S. Government "is committed to a transition that will allow the private sector to take leadership for DNS management."
On the March 24 edition of America's News HQ, co-host Bill Hemmer claimed that during a Clinton Global Initiative summit, Clinton spoke "out against U.S. plans to hand over control of the internet" to countries like Russia and China:
CLINTON: The United States has been by far the country most committed to keeping the internet free and open and uninterrupted. And a lot of these people who say they want multi-stakeholder control over domain names and internet access, what they really do is want the ability to shut down inconvenient exchanges within their own countries.
Clinton went on to ask Wikipedia co-founder Jimmy Wales whether he is worried "that if we give up this domain jurisdiction that we've had for all these years that we'll lose internet freedom."
But Fox left out a key portion of Clinton's comments where he explained the he favors the multi-stakeholder process in general:
CNN's Carol Costello shot down conservative talking points disparaging the minimum wage, correctly noting that raising it would increase incomes and decrease poverty.
On February 18, the non-partisan Congressional Budget Office (CBO) released estimates of the economic impacts of proposals to lift the minimum wage to $9.00 and $10.10, respectively. Among the report's summary conclusions was the revelation that the $10.10 option would raise the wages of 16.5 million workers while lifting up to 900,000 Americans out of poverty. Ignoring these positive side-effects, conservative media have focused heavily on estimates that increasing the minimum wage to such levels could reduce full-time employment by approximately 0.3 percent, the equivalent of roughly 500,000 positions.
On the February 19 edition of CNN Newsroom, host Costello was joined by Wall Street Journal editorial board member and Heritage Foundation chief economist Stephen Moore to discuss the CBO report. Moore, a prominent right-wing media figure, rehearsed standard talking points about the alleged disastrous impacts of increasing the minimum wage for low-skilled and entry-level workers.
Despite Moore's efforts, Costello checked his spin at every turn, continually pointing to the positive impacts of increasing the minimum wage.
Costello's strong reporting highlights the important role of media in sifting through misinformation to present unbiased results. While the median estimate of a $10.10 per hour minimum wage was decreased full-time employment, the CBO's projection also concludes that job loss could be "very slight" -- a fact highlighted by Costello. She also noted the positive income effects of increasing the federal minimum wage -- effects that are being ignored in media coverage of the CBO report -- and argued that many Americans would accept marginal job loss in exchange for lifting hundreds of thousands more out of poverty.
Costello's coverage of the minimum wage hopefully reflects a mainstream media trend of actually analyzing policy news, rather than allowing right-wing media to spin the narrative.
From the January 17 edition of Fox News' Your World with Neil Cavuto:
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From the January 8 edition of Fox News' America's News HQ:
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From the November 11 edition of Fox News' America's Newsroom:
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Fox News is calling mileage-based user fees that several states are considering "Orwellian," implying the government would be able to track your vehicle without permission and perhaps even "shut your car off." But the network's segment left out that such proposals generally include devices that cannot track your location and certainly cannot turn off your car, satisfying both the American Civil Liberties Union and several conservative organizations.
In a segment featuring no voices in defense of mileage-based user fees (MBUF), Fox News anchor Martha MacCallum declared such proposals the "most Orwellian thing I've ever heard." MacCallum hosted Berkeley Varitronics Systems President Scott Schober, who suggested the government may be able to "shut your car off" if you do not pay the fees. MacCallum added that if "somebody is stalking you and they want to know where you're going, they could very well hack right into this system and follow you." The segment was so conspiratorial that fellow Fox News anchor Jon Scott joked that "I see the black helicopters over your studio right now":
Ryan Morrison, Founder and CEO of True Mileage, Inc. -- a company that designs devices that could be used for MBUF -- said this "definitely sounds like misinformation." In a phone conversation with Media Matters, Morrison said "no company or departments of transportation are looking into devices that could shut off a car." He added that "certainly no one would be able to do anything like that with our devices, and the only time that I've heard of something like that is with a LoJack" for stolen vehicles.
In addition, according to Morrison, most proposals are suggesting allowing citizens to choose whether to install devices without GPS-tracking -- such as his company's -- or to install ones that do have GPS-tracking -- in order to save money when they travel out of state or on less congested roads. For instance, Oregon, which has moved forward with a pilot program for a MBUF (also known as a "vehicle-miles traveled" (VMT) fee), would allow participants to choose devices that do not have GPS tracking and delete personal data after 30 days. The American Civil Liberties Union is reportedly "satisfied with the privacy protections" in Oregon's program.
Wall Street Journal editorial board member Stephen Moore altered his previous position on the effect of Obamacare on the growth of part-time jobs to push the dubious claim that health care reform will increase part-time work in the future.
On the October 23 edition of Fox News' America's News HQ, co-host Bill Hemmer interviewed Moore on the potential effects of Obamacare implementation on the growth of part-time work. When asked by Hemmer if the law has already played a role in increasing part-time work, Moore responded, "We are going to probably see that number [of part-time employment] rise next year, because that's when the Obama requirements really take effect. In January."
Moore's position, that Obamacare is not currently increasing part-time work, reverses his previous stance on the subject. Moore has played a significant role in creating and perpetuating the myth that the reform is the driving force behind increasing part-time work.
Since the beginning of 2013, the Wall Street Journal editorial board -- of which Moore is a member -- has published as least four editorials claiming that Obamacare is directly linked to the growth of part-time work at the expense of full-time employment.
Indeed, Moore has repeated these claims directly. In a July 5 WSJ Live segment on the "ObamaCare Jobs Report," co-editorial board member Mary Kissel asked Moore what was behind the rise in part-time work in the June jobs report. Moore responded, "clearly Obamacare."
Moore's decision to finally acknowledge facts that have long been noted by professional economists is a welcome change. Unfortunately, his admission came while pushing yet another unsubstantiated claim; that part-time work will increase when the employer mandate -- penalties for which were delayed until 2015 -- takes effect.
In an analysis of the effect of Obamacare on employer practices, economists Dean Baker and Helene Jorgensen noted that initial indications of an increase in part-time work resulting from Obamacare would have materialized by January 2013, "since under the original law employment in 2013 would serve as the basis for assessing penalties in 2014." Jorgensen and Baker conclude by noting that that in the first few months of 2013, before the mandate was delayed on July 2, "employers [did] not appear to be changing hours in large numbers in response to the sanctions in the ACA." If this evidence has any implications for the future, there will be no part-time work shift as a result of Obamacare, as Moore suggests.
Indeed, after previously suggesting that the law may cause part-time job growth, Mark Zandi, chief economist of Moody's Analytics, said recently of the part-time work claim: "I don't see it in the data."
During a discussion of the latest jobs report, The Wall Street Journal's Stephen Moore ignored the prominent role sequestration cuts played in depressing job growth, choosing instead to make the reality-defying claim that sequestration has in fact been a boon to the economy.
On October 22, the Bureau of Labor Statistics released its monthly unemployment report for September. According to the report, payrolls rose by 148,000, while the unemployment rate dropped from 7.3 to 7.2 percent. Those positive gains, a welcome change from losses sustained after the financial crisis, nonetheless fell short of expectations that 180,000 to 200,000 jobs would be created in September.
WSJ's Moore reacted to the jobs report during an interview with Fox News host Jenna Lee on Happening Now. He claimed the numbers represented an economy in "stagnation" that is "middling at best" and "kind of limping forward." Lee followed up, asking whether automatic spending cuts known as sequestration were to blame. Moore responded:
MOORE: Well first of all, I think the sequester has been very good for the economy, not bad. When you cut government spending, that frees up resources for private businesses. So the sequester has been, in my opinion, a very positive force and it's bringing down the deficit in spending.
Moore's cheerleading of sequestration while complaining about an under-performing economy is ironic because the slowdown of the recovery has been caused in large part by the sequester, which, according to Yahoo! Finance, is "finally dinging the economy":
Forecasting firm MacroEconomic Advisers has lowered its second-quarter forecast for GDP growth from 1.8% to 1.3%. That's very weak growth that will probably hold back hiring and spending, and depress confidence. "The sequester is expected to slow growth this year, and largely accounts for the weak second-quarter growth and lackluster third-quarter growth," the firm said in a recent report.
Pullbacks in the job market seem likely during the next few months. After five straight months of improvements, small businesses surveyed by the National Federation for Independent Business curtailed hiring in May. The latest jobs report from ADP showed private-sector firms created about 30,000 fewer jobs than expected in May, with companies hiring at a pace too slow to bring down the unemployment rate. Manufacturing activity, which is directly affected by federal spending on defense contractors, has fallen below the level generally considered to be recessionary.
Tony Nash of forecasting firm IHS warned recently on CNBC that the effects of the sequester should build as the year goes on. Even the Federal Reserve mentioned the sequester in its latest "beige book" report on regional economic conditions, citing concerns about defense-industry cutbacks in the Cleveland and Richmond regions.
According to the Oregon Office of Economic Analysis, the sequester has impacted job growth throughout the country. CNN recently confirmed an earlier report that the sequester has slowed economic growth. Worse still, an October 2013 report by the Bipartisan Policy Center found that the "full brunt of the [sequester] cuts hasn't hit yet, and if we go down the sequester path for too long, we won't be able to reverse the devastating impacts."
Furthermore, repealing the sequester would stimulate the economy. According to an analysis by the non-partisan Congressional Budget Office (CBO), canceling sequestration would increase the United States' Gross Domestic Product (GDP) by $113 billion and generate 900,000 new jobs, which the Economic Policy Institute noted, is "a number akin to 40 percent of the total number of jobs created over the last twelve months."
Moore's ignorance is not new. He previously claimed that sequestration was a "success" free of "negative consequences," a sentiment echoed throughout the right wing media. Instead of spending cuts, Moore would do well to turn his attention to job creation.
The lackluster September unemployment report highlights the need for a focus on job creation, a priority that is likely to be ignored by media.
On October 22, the Bureau of Labor Statistics released its unemployment report for the month of September, which found that payrolls rose 148,000, edging the official unemployment rate down from 7.3 to 7.2 percent. While the report found positive gains in the labor market -- a welcome change from losses sustained after the financial crisis -- job creation fell far short of economists' expectations, which predicted 180,000 to 200,000 jobs would be created in September.
The underperforming labor market, identified in this month's report, presents an opportunity for the media to focus on job creation and economic growth.
Unfortunately, this opportunity is likely to be squandered in favor of promoting discussion on spending cuts and deficit reduction, as evidenced in past reporting.
Media's focus on deficits and debt instead of economic growth and jobs has long been criticized by economists. Previous coverage of budget negotiations show that media place overwhelming focus on the need to reduce spending, often leaving the more pressing need for economic growth largely unmentioned.
Indeed, this issue has already been raised by economist Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities. In a post on The New York Times Economix blog, Bernstein expressed fears that after concluding the 16-day long government shutdown, the media will undoubtedly pivot focus to deficit and debt reduction. Bernstein explains that the debate over spending and deficit reduction will crowd out discussion on the more immediate jobs crisis:
Imagine instead that the politicians turned not to the budget deficit but to the jobs deficit, the infrastructure deficit, to poverty, wage stagnation, immobility and inequality. Along with a budget conference -- and don't get me wrong; I'm glad they're talking -- imagine there was an economic conference to make recommendations on what's really hurting the country, which I assure you is not our fiscal situation. That's taking care of itself for the short term, as is always the case after a recession (deficits go up in recessions, for obvious reasons).
I'm surely going to jump into the budget debate myself any minute now, but before I do, I wanted to point out that this is not the debate we should be having. It's the preferred debate of those who seek to shrink the role of government, to undermine social insurance, to reduce needed investments in public goods and human capital, and to protect the concentrated wealth of the top few percent.
Bernstein's fear of undue focus on debt and deficits has already been realized.
Reacting to the deal that ended the recent government shutdown, Fox News host Megyn Kelly claimed it wasn't a "win for the American people" because it didn't reduce the national debt. CNN reported that the shutdown deal shouldn't be celebrated because it "kicks the can [of budget negotiations] down the road." Wall Street Journal editorial board member Stephen Moore immediately declared the preservation of sequestration cuts -- which will continue to reduce spending and deficits -- the "winner" of the shutdown, and the Journal preemptively told Republicans to stand firm on sequestration cuts in any budget deal in an October 13 editorial.
If history and early reports are any indication, media will continue their habit of promoting deficit reduction as budget negotiations take place.
Right-wing media figures have repeatedly criticized Obama administration officials for claiming that the U.S. will default if the debt ceiling is not raised by October 17, instead claiming the U.S. could prioritize payments to bondholders as a way to avoid default. But economists note that the threat of default is real and that the prioritization alternative proposed by Republicans is not a long-term solution.
From the October 3 edition of Fox News' Happening Now:
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From the September 27 edition of Fox News' Your World with Neil Cavuto:
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Fox News' Neil Cavuto trotted out well-worn falsehoods about the successful auto rescue, casting doubt on claims made by Ford CEO Alan Mulally on Cavuto's own show a year earlier.
On September 20, President Obama delivered a speech on the economy at a Ford Motors plant in Liberty, Missouri. During the speech, he noted that while Ford did not accept a bailout in the wake of the financial crisis, if General Motors (GM) and Chrysler had not accepted federal funds, it "would have had a profound impact on Ford."
Discussing the president's speech on Fox News' Your World, host Neil Cavuto was joined by Fox Business contributor Charles Payne and Wall Street Journal editorial board member Stephen Moore. Cavuto criticized the President's remarks about Ford being affected by GM and Chrysler's decision to accept federal funds. Cavuto acknowledged that Obama's remarks were similar to Mulally's, who credited the auto rescue for preserving the industry, but dismissed the statement, asking "how do you know that? It was my question then, it remains my question now."
While Cavuto cast doubt over whether or not Ford would have gone under, the fact that Ford would have been imperiled by the disintegration of the other "Big Three" automakers is not only well-established, Cavuto was told as much by Mr. Mulally himself on an edition of Your World taped one year previously.
During their interview, Mulally stated, "if GM and Chrysler, who were completely bankrupt, went into free fall they could have taken down the industry and the U.S. economy from a recession into a depression." He went on to state that all of the remaining automakers "would have been in real trouble."
In addition to downplaying the necessity of the auto rescue, the panelists hypothesized that private capital could have been raised to shore up teetering automakers. This opinion, voiced by Charles Payne stating, "I honestly believe that the private sector would have stepped up and funded General Motors the way that bankruptcies have been funded in the past," also does not comport with the facts.
When the auto rescues were first designed in late-2008 the financial industry was in the midst of a free fall of its own, which Fox has also recently downplayed. There was very little private capital available in the United States for any large-scale bankruptcy and American automakers, unlike the subsidiaries of Toyota, Honda, and other auto transplants, could not draw credit from foreign governments or headquarters.
The auto bailouts, which were initially extremely unpopular, are now widely lauded as successful government responses to the myriad crises facing the economy in 2008 and 2009. Despite Fox's attempts to undermine the administration's handling of the auto industry, the rescues are popular in areas heavily reliant on the auto-industry and often credited for swinging key states toward Obama in the 2012 Election.
On Fox News, Wall Street Journal editorial board member Stephen Moore defended the GOP plan to cut billions from the food stamp program by falsely claiming the cuts wouldn't hurt children, that the program suffers from "immense" fraud, and that millionaires could qualify for benefits. But studies show fraud is extremely rare and millions of families will be negatively affected by the cuts.
On the September 20 edition of Fox's America's Newsroom, Moore downplayed the proposed $40 billion cuts to the program, claiming the benefits weren't "slashed" but "trimmed" and justified the move by saying there is an "immense amount of fraud" in the program that "you could live in a million-dollar mansion and still get food stamps," and that "families with children would not be affected by any of this":
Contrary to Moore's claim that children would not be impacted by the cuts, the Center on Budget and Policy Priorities found that the proposal would leave 3.8 million people without benefits, many of whom are in low-income families. The bill would also limit schools meals for hundreds of thousands of children:
- 1.7 million unemployed, childless adults in 2014 who live in areas of high unemployment -- a group that has average income of only 22 percent of the poverty line (about $2,500 a year for a single individual) and for whom SNAP is, in most cases, the only government assistance they receive (this number will average 1 million a year over the coming decade);
- 2.1 million people in 2014, mostly low-income working families and low-income seniors, who have gross incomes or assets modestly above the federal SNAP limits but disposable income -- the income that a family actually has available to spend on food and other needs -- below the poverty line in most cases often because of high rent or child care costs. (This number will average 1.8 million a year over the coming decade.) In addition, 210,000 children in these families would also lose free school meals;
- Other poor, unemployed parents who want to work but cannot find a job or an opening in a training program -- along with their children, other than infants.
CBPP included a table explaining how American households would be hurt by the cuts: