Fox News' Stuart Varney portrayed a natural gas automaker as a "green energy failure," even though he pushed the federal government to make transit agencies buy vehicles from the same company only a few months prior.
Vehicle Production Group (VPG), a Michigan-based company that makes wheelchair-accessible vans, recently ceased operations and closed its offices. The company, which had drawn attention for designing the first vehicle specifically for people with disabilities, was awarded a $50 million conditional loan commitment in 2010 to develop vans with natural gas engines as part of the Department of Energy's Advanced Technology Vehicles Manufacturing (ATVM) program.
On Wednesday, Varney depicted the company as "the latest embarrassment for the [Obama administration's] green energy policy" on Fox & Friends:
But Varney did not mention that VPG received its loan under a program that President George W. Bush signed into law, or that the natural gas vehicles it was intended to subsidize are a component of T. Boone Pickens' energy plan, which Fox News personalities have previously supported. Pickens funded and advocated for VPG himself.
Fox News claimed that federal government policy was failing to lower unemployment by citing recent decisions made by the Federal Reserve. However, economists note that Federal Reserve action alone cannot increase employment, and federal spending must be increased to improve the economy.
Reacting to the May 2 weekly jobless claims report, Fox Business anchor Stuart Varney dismissed the 18,000 drop in initial claims to the lowest level in five years, stating that "it's a better number, but it's still not a good number." Varney went on to claim that the Federal Reserve's recent decision to continue its bond buying program was not producing expected drops in unemployment, claiming "unemployment rates are not falling the way they should when you're printing all this money." From America's Newsroom:
While Varney was quick to dismiss the government's role in strengthening the labor market by citing the Federal Reserve and the effect of current monetary policy on job creation, he completely ignored the fact that decreases in government spending have negatively impacted the economy, overlooking statements made by the Federal Reserve and the warnings of experts.
In the statement released by the Federal Reserve on May 1 outlining its future decisions regarding monetary policy, the board specifically cited that "fiscal policy is restraining economic growth."
Indeed, many analysts have been claiming that actions by the Fed are not enough to bolster economic growth, and that increased government spending -- that is, expansionary fiscal policy -- is necessary to improve current conditions.
In The Washington Post's Wonkblog, Roosevelt Institute fellow Mike Konczal explained how actions taken by the Federal Reserve have failed to counteract the negative effects of decreased government spending:
But the most important lesson to draw is that fiscal policy is incredibly important at this moment. In normal times, the broader effect of government spending, or the fiscal multiplier, is low because the central bank can offset it. But these are not normal times. It's not clear why the Federal Reserve's actions haven't balanced out fiscal austerity. But since they haven't, we should be even more confident that, as the IMF put it, "fiscal multipliers are currently high in many advanced economies."
The main point here is that while the Federal Reserve is attempting to spur economic gains through monetary policy, it simply can't do enough to counteract recent contractions in government spending. Former Labor Secretary Robert Reich echoed Konczal, stating "easy money from the Fed can't get the economy out of first gear when the rest of government is in reverse."
By only focusing monetary policy as the government's way to bolster employment and economic growth, Fox is only telling half the story -- the negative effects of decreased government spending are far too damaging to be mitigated elsewhere -- and continuing its trend of downplaying positive economic news.
From the April 29 edition of Fox News' Fox & Friends:
Loading the player ...
Fox News glossed over an important aspect in its reporting on lower than expected GDP growth -- the government contribution to GDP has been negative in the majority of recent reports.
Following the April 26 release of first quarter GDP growth estimates, Fox Business anchor Stuart Varney dismissed the 2.5 percent increase as "not good numbers," claiming that the increase was not indicative of a robust recovery. From Fox News' America's Newsroom:
Varney provided a laundry list of reasons why GDP growth has failed to live up to expectations, including recent federal and state tax increases and, notably, cuts from sequestration - a reversal from previous right-wing assertions that sequestration was too small to harm the economy. Varney failed to explain, however, that too little government spending has been holding back economic growth, as indicated by many of quarterly reports from the past two years.
The Bureau of Economic Analysis provides data on individual contributions to GDP, including government spending's contribution. When the government's contribution to GDP growth is separated from total growth, it becomes apparent that it has been a drag on the economy for much of the past two years.
In the previous 13 quarters, government spending has only added to GDP growth twice - once in the second quarter of 2010, and again in the third quarter of 2012.
This observation has been recognized by others, causing The Washington Post's Ezra Klein to boldly state that "government is hurting the economy - by spending too little." Of course, any recognition of this fact from Fox News would require the network to abandon its longtime stance that increased government spending can only hurt the economy.
From the April 26 edition of Fox News' America's Newsroom:
Loading the player ...
Fox News selectively edited comments by Senate Majority Leader Harry Reid to accuse him of exaggerating the effects of automatic budget cuts that began March 1. Fox's excerpt of Reid's call to end the cuts left out his description of specific impacts and ignored widespread media reporting that supports his statements.
Due to the across-the-board spending cuts, the National Institute of Health (NIH) will be forced reduce its budget by $1.5 billion and expects to award 1,000 fewer grants in 2013. Because approximately three-fifths, or $40.8 billion, of all university research funding in 2011 came from the federal government, this loss will be disruptive. Some disruptions have already begun.
On April 25, Fox & Friends aired a short clip from Sen. Reid's April 24 remarks to the Senate that called for an end to the arbitrary budget cuts. Although Reid prefaced the aired comments with a broader description of the impact that the mandatory budget cuts may have on education and the economy, Fox Business host Stuart Varney and Fox News host Steve Doocy chose to focus on just three sentences, accusing Reid of "desperate" exaggeration. Doocy claimed that Reid "essentially is saying Republicans want to kill people."
Fox's short excerpt of Reid's testimony omitted context in which Reid detailed specific examples of how the budget cuts may curb medical research. Here is a larger excerpt of Reid's statement [what Fox aired is bolded]:
Nationwide these across-the-board cuts will cost 750,000 jobs. They will cost us investments in education that keep America competitive. They will cost millions of seniors, children, veterans and needy families the safety net that keeps them from descending into poverty.
Most of the headlines are focused on the hours the sequester has cost travelers in airports across the nation. The frustration and the economic effects of those delays should not be minimized. But the sequester could also cost this country - and humankind - a cure for AIDS or Parkinson's disease or cancer.
These arbitrary cuts have decimated funding for medical researchers seeking cures for diabetes, epilepsy and hundreds of other dangerous and debilitating diseases. The National Institutes of Health has delayed or halted vital scientific projects and reduced the number of grants it awards to research scientists. Thousands of researchers will lose their jobs in the next few months. And projects that can't go on without adequate staffing will be cancelled altogether.
At Ohio State University, grants for cancer research and infectious disease control have been axed. At the University of Cincinnati - which is at the forefront in research on strokes, a leading cause of death in the United States - scientists are bracing for similar cuts. Vanderbilt University and the University of Kentucky are accepting fewer science graduate students because of funding reductions. At Wright State University, scientists researching pregnancy-related disorders such as preeclampsia will lose their jobs. Boston University has laid off lab scientists, and research laboratories in San Francisco have instituted hiring freezes and delayed the launch of important studies. And grants to some of Harvard University's most successful research scientists were not renewed because of the sequester.
This kind of research saves lives. These scientists are looking for the next successful treatment for Alzheimer's disease or the next drug to treat high cholesterol. But they might never get the chance to complete their groundbreaking work or make their life-saving discoveries because of these short-sighted cuts.
We have seen the devastating impacts of these arbitrary budget cuts. Now it's time to stop them.
News reports confirm the cuts to medical research highlighted in Reid's statement.
Media outlets including NPR and Fox News are targeting federal disability benefits programs through a campaign deceptively portraying these programs as wasteful and unsustainable. In reality, these programs have low fraud rates and help the rising number of Americans with severe disabilities survive when they are unable to work.
Fox News figures accused the Obama administration of trying to "maximize" sequestration pain on the American people through the Federal Aviation Administration's furloughs of air traffic controllers, despite the fact that federal agencies are required by law to cut their programs evenly.
On April 22, the automatic spending cuts known as sequestration forced the F.A.A. to begin furloughs for air traffic controllers. The unpaid leaves delayed more than 1,200 flights that day, according to the F.A.A.
Although the legislation provides little to no room for agencies to decide how to implement the budget cuts, Fox figures used the furloughs to argue that the administration is trying to inflict maximum pain from sequestration. On his radio show, Fox News host Sean Hannity claimed that administration is furloughing air traffic controllers "because they want to maximize the amount of pain that you the American people are feeling."
In fact, as a New York Times editorial explained, "the sequester law is clear in requiring the F.A.A. and most other agencies to cut their programs by an even amount." This provision prevents agencies from deciding how and where to implement the budget cuts:
As it happens, the sequester law is clear in requiring the F.A.A. and most other agencies to cut their programs by an even amount. That law was foisted on the public after Republicans demanded spending cuts in exchange for raising the debt ceiling in 2011. Since then, the party has rejected every offer to replace the sequester with a more sensible mix of cuts and revenue increases.
As Forbes explained, the F.A.A. and other federal agencies "have little or no discretion to target spending cuts":
The across-the-board nature of the spending cuts has been well-noted. Federal agencies have little or no discretion to target spending cuts by, say, getting rid of obsolete or poorly-run programs. They have to cut them all, the good ones and the bad ones alike. They can't lay off poorly performing workers, they must furlough everyone.
But the fact that the legislation prevents the Obama administration from targeting the cuts has not prevented Fox figures from parroting Hannity's claim.
In the wake of the Boston bombings, Fox host Sean Hannity revived his false narrative that Obama is soft on terrorism because he failed to characterize "jihad" as inherently violent in a 2010 speech. In fact, Obama's approach has been praised, and former President George W. Bush made similar statements about the nature of "jihad."
On the April 23 edition of his Fox News show, Hannity claimed that after the Boston terror attack, President Obama is still unwilling to "engage in a war on radical Islam." After playing a November 7, 2010, clip of Obama answering a question in Mumbai, India, about jihad, explaining that "the phrase 'jihad' has a lot of meanings within Islam and is subject to a lot of different interpretations," Hannity responded: "There are not really many interpretations -- that's spin. Jihad equals holy war." From the show:
But Obama's interpretation of jihad is no different from the definition used by the Bush administration that preceded him. The 2006 National Strategy for Combating Terrorism, issued by the Bush administration's National Security Council, stated, "Terrorists distort the idea of jihad into a call for violence and murder against those they regard as apostates or unbelievers." And in an October 2005 speech, Bush said that "extremists distort the idea of jihad into a call for terrorist murder against anyone who does not share their radical vision, including Muslims from other traditions, who they regard as heretics." He continued:
Fox News has consistently downplayed positive weekly jobless claims reports, ignoring the standard the network set for signs of labor market improvements.
A Media Matters analysis revealed that despite consistent improvements in the number of people filing for unemployment benefits, Fox's coverage of weekly jobless claims reports was overwhelmingly negative. The network consistently used the reports to bring up unrelated negative economic news, a practice that has become common on Fox when faced with positive economic developments.
Fox News figures claimed the U.S. should emulate the United Kingdom by slashing funding to federal disability programs and changing eligibility requirements, despite the fact that U.S. eligibility requirements are already stringent, that the new U.K. benefits tests were largely overturned on appeal, and that research shows changes to disability programs in the U.K. will force thousands of individuals with disabilities into poverty.
Fox Business host Stuart Varney claimed that any signs of a weakening labor market cannot be explained by sequestration. However, economists have linked the expected slowdown in hiring to sequestration, and note that any negative impacts are likely to be temporary.
Reacting to an unexpected rise in weekly jobless claims, America's Newsroom host Bill Hemmer asked Varney if any of the rise was due to sequestration. Varney responded by claiming, "No...There's no seasonal factors, it's not weather, it's not sequester, it's just weakness in the underlying economy."
Economists do not support Varney's insistence that sequestration has had no impact on the job market. An April 3 Associated Press report noted economists' opinions on the link between sequestration and hiring:
Jim O'Sullivan, chief United States economist at High Frequency Economics, now expects just 160,000 net jobs in the March employment report, instead of 215,000. Jennifer Lee, an economist at BMO Capital Markets, said her group had lowered its forecast to 155,000, from 220,000.
Ms. Lee said businesses might have temporarily suspended hiring because they wanted to see the impact of $85 billion in government spending cuts, which began on March 1.
Furthermore, while Varney used the rise in weekly jobless claims to paint a thoroughly negative picture of the labor market, the same AP report noted that "most economists say any slowdown is likely to be temporary."
Indeed, when a more stable measure of the labor market is examined - such as the preferred four-week moving average of initial jobless claims - a much less negative picture emerges. While the four-week average rose in the April 4 report, the underlying trend of weekly claims has been positive. Since the beginning of 2013, the trend of initial claims has declined greatly, producing four-week averages at levels not seen since 2008.
Conservative media figures are painting a new White House push on affordable housing with the same dishonest brush they used to shift blame away from Wall Street for the housing bubble that precipitated the 2007-08 financial crisis.
On the April 3 edition of Fox News' America's Newsroom, Fox Business host Stuart Varney said that "lowering standards for who can borrow money to buy a home" is "what got us into trouble in the first place." The Washington Free Beacon made the same claim in an article titled "Subprime: The Sequel," and Ed Morrissey of HotAir.com claimed "the central failure in that bubble...was incentivizing increasingly risky loans with government cash and coercion."
But the housing bubble of the early 2000s was caused by private sector lending behavior, not government policy. The government-sponsored entities Fannie Mae and Freddie Mac, commonly called the GSEs, didn't lead private financial institutions into the subprime market and the complex financial instruments that made the bubble so toxic. Instead, they followed Wall Street there. As the University of North Carolina's Center for Community Capital explained, "Ultimately, profit not policy was what motivated Fannie and Freddie and loan products not borrowers were what caused their collapse."
The data support this explanation. The loans to borrowers with lower credit scores which the GSEs bought up fared much better than did similar privately-securitized loans. (Six times better, according to the Center for American Progress). A Federal Reserve report using different methodology "found no evidence" that government policies designed to encourage lending to lower-income borrowers had contributed to the subprime bubble. The Financial Crisis Inquiry Commission's final report examined and thoroughly debunked the contrary argument, primarily made by the American Enterprise Institute's Ed Pinto:
In direct contrast to Pinto's claim, GSE mortgages with some riskier characteristics such as high loan-to-value ratios are not at all equivalent to those mortgages in securitizations labeled subprime and Alt-A by issuers. The performance data assembled and analyzed by the FCIC show that non-GSE securitized loans experienced much higher rates of delinquency than did the GSE loans with similar characteristics.
Morrissey's post labels Pinto, former executive at Fannie Mae, a kind of soothsayer "who originally pointed out the failure at [the Federal Housing Administration]." But beyond the wonks who've debunked Pinto's claims, financial experts and journalists like Bailout Nation author Barry Ritholtz, The New York Times' Joe Nocera, and Bloomberg's David Lynch have shown him to be a primary driver of the false blame-the-government narrative of the crisis five years ago that conservative media are applying to housing policy developments in 2013.
An April 2 Washington Post article on the White House's efforts to broaden the reach of the current housing market resurgence notes that the recent improvement in the market "has been delivering most of the benefits to established homeowners with high credit scores or to investors who have been behind a significant number of new purchases." Housing officials, however, argue that a housing recovery that is limited to near-riskless buyers is constraining the broader economic recovery. According to the piece:
From 2007 through 2012, new-home purchases fell 30 percent for people with credit scores above 780 (out of 800), according to Federal Reserve Governor Elizabeth Duke. But they declined 90 percent for people with scores between 680 and 620 -- historically a respectable range for a credit score.
"If the only people who can get a loan have near-perfect credit and are putting down 25 percent, you're leaving out of the market an entire population of creditworthy folks, which constrains demand and slows the recovery," said Jim Parrott, who until January was the senior adviser on housing for the White House's National Economic Council.
"I think the ability of newly formed households, which are more likely to have lower incomes or weaker credit scores, to access the mortgage market will make a big difference in the shape of the recovery," Duke said last month. "Economic improvement will cause household formation to increase, but if credit is hard to get, these will be rental rather than owner-occupied households."
Yet conservative ideologues in the media appear eager to cast any attempt to expand the list of winners in the housing market's comeback as a doomed repetition of an invented history of a crisis that was actually caused by widespread private-sector fraud, greed, and collusion.
Fox Business host Stuart Varney and guest Marc Morano falsely suggested higher truck sales in March translate into a rejection of more fuel efficient vehicles by American consumers. In fact, the driving force behind higher truck sales is a rebounding construction sector, and sales of more fuel efficient vehicles have also been robust.
Fox Business host Stuart Varney selectively cited a Wall Street Journal article to fearmonger over President Obama's health care law, ignoring that potential increases would impact only a small part of the insured population and would be partially offset by federal tax subsidies.
On America's Newsroom, Varney, citing a Wall Street Journal article, claimed that millions of people "will be paying a whole lot more for their individual coverage after Obamacare takes full effect next year. In some cases, the premiums that they will pay will double."
But Varney ignored several key facts from the WSJ article to stoke fears about costs under the health care law.
The Journal reported that tax subsidies "will limit many consumers' costs" and that "[m]ore than half of the 35 million people expected to be in the individual market by 2016 are likely to qualify for credits." The Journal also noted that some individuals and small businesses will actually see their premiums decrease and that the nonpartisan Congressional Budget Office "says average individual premiums, on an apples-to-apples basis, would be lower."
Moreover, an Associated Press report found that potential increases in health care premiums would impact "a relatively small slice of the insured population" and that the law "is expected to tame health care costs for many." The AP also found that tax credits will offset some of the premium increases:
There also will be tax credits, or subsidies, given to people with incomes that fall within 400 percent of the federal poverty level. For 2013, 400 percent of the poverty level for all states except Alaska and Hawaii would be $94,200. These credits won't lower premiums, but they can ease the insurance bill depending on a person's income.
The credits should help the 20-something customers that insurers warn will see big premium hikes, said Linda Blumberg, an economist with the Health Policy Center of the Urban Institute, a nonpartisan policy research organization.
"While these folks are potentially facing some premium increases due to all these reforms, they also are the ones most likely to get the financial help from the exchanges," she said.
On March 13, Fox & Friends also misled on premium costs under the health care law when co-host Alisyn Camerota claimed, "Your premiums are going to double and that your bills could double, this is really stunning news for lots of Americans."