Obama Embraces Media Hype about Economic 'Turmoil'

     As Sen. Barack Obama, D-Ill., accepted his party’s nomination for president he warned of an American economy in “turmoil.” Throughout convention week the news media helped reinforce Obama’s negative perspective.

     During the Democratic convention week, networks broadcast pessimistic reports about the economy and downplayed or ignored the announcement that second quarter gross domestic product (GDP) rose by a full percentage point more than expected. The media even validated Obama’s assertion that the Clinton administration built an “incredible” economy, although the economy grew slower than 3.3 percent during nearly half of Clinton’s presidency.

      “We meet at one of those defining moments, a moment when our nation is at war, our economy is in turmoil, and the American promise has been threatened once more,” Obama said in his August 28 speech during the Democratic National Convention (DNC). Later in the speech he added that America “cannot turn back … not with an economy to fix.”

     Journalists seemed to agree, giving Obama credit for attacking Sen. John McCain, R-Ariz., on the economy. “Red meat” was a buzzword for Democratic attacks on McCain throughout the convention and that’s what ABC’s George Stephanopoulos praised Obama for on August 28.

     On “Nightline,” the chief Washington correspondent for ABC and former Clinton senior adviser gave Obama an “A” for red meat. “He came out hard, he came out tough against John McCain on the economy and foreign policy,” Stephanopoulos said.

     Tom Brokaw, the former anchor of NBC “Nightly News,” matched Obama’s gloomy refrain on August 29. But his complaint didn’t take into consideration good economic news from the day before about 3.3 percent growth of gross domestic product and oil and gas prices that have been falling from July highs.

     Oil prices peaked at a record $147.27 in July, but were in the $105 a barrel range on September 2, according to Financial Times. Gas prices have also dropped from the July 17 high of $4.11 per gallon to $3.68 on September 2.

     Still Brokaw was morose. “Beyond this arena, and this city, the American people are facing some of the greatest problems that they have faced, certainly in our lifetimes. Financial crisis, greatest since the Depression; energy crisis; two wars in two different countries; the Russian bear is crashing around in the woods again,” Brokaw warned on MSNBC.

     But Brokaw’s lament came hours after the Commerce Department confirmed (again) that the economy was not in recession during 2008. As it turned out, not only did the economy grow during the second quarter (meaning it was not in recession) at 3.3 percent – that was a full percentage point more than the 2.3 percent growth economists predicted.

     GDP growth, at 3.3 percent, was actually stronger in the most recent quarter than 14 separate quarters of growth under President Clinton according to government data (that’s three and a half years).

     Thomas Sowell, the Rose and Milton Friedman Senior Fellow with the Hoover Institute, responded to Obama’s claim of an “economy in turmoil” with a September 1 syndicated column. In it he called the statement “standard stuff on the left and in the mainstream media, which has been dying to use the word ‘recession.’”

     Obama’s tales of economic woe fed into an already glum news media that have complained incessantly about recession and drew more than 70 comparisons to the Great Depression in the first six months of 2008.

     His claims of “economic disaster” also went unchallenged on August 19. At a townhall meeting that day, Obama claimed that “the economic disaster is happening right now.” The media didn’t expose the exaggeration; instead reporters credited Obama with “sharpening his message.”

     An editorial in Investor’s Business Daily (IBD) linked the media and the Democrats’ downbeat rhetoric together on August 28 and criticized such pessimistic outlooks.

     “[L]istening to the media and the Democrats in Denver, you’d think the economy was in a depression. Well, it’s not. In fact, we’re modestly optimistic,” IBD said.

Obama’s ‘A’ for Effort

      Obama harshly railed against free-market principles during his acceptance speech on August 28 and attacked McCain and President George W. Bush on economic grounds.

     In one attack against McCain, Obama said the Arizona senator, “subscribed to that old, discredited Republican philosophy: Give more and more to those with the most and hope that prosperity trickles down to every else.”

      “He [McCain] said that our economy has made great progress under this president. He said that the fundamentals of the economy are strong,” Obama said as he tried to portray McCain as out of touch with economic reality.

     It was attacks like these that earned Obama an “A” from ABC’s Stephanopoulos. Criticism of Obama’s economic view was hard to find on the broadcast networks.

     ABC’s Jake Tapper focused an August 29 “World News with Charles Gibson” segment on Obama’s economic message, but didn’t include any expert or information – such as the GDP revision – that would have contradicted it.

     “This week Obama will repeat his sharp attacks on his opponent that millions of Americans first heard last night,” Tapper said. “The economy will be the main focus.”

     Similarly, NBC “Nightly News” reporter Lee Cowan mentioned Obama’s “pointed criticisms” of McCain about the economy but without providing any reality check on August 29.

     National Public Radio’s (NPR) Scott Horsley also mentioned the Democrats’ plan to “target economy” during “All Things Considered” on August 28 saying, “Democrats insist McCain would merely extend President Bush’s lackluster economic record.”

     But Bush’s record wasn’t “lackluster,” as a Wall Street Journal op-ed by Keith Marsden pointed out on September 3. According to data from the International Monetary Fund (IMF), “U.S. output has expanded faster than in most advanced economies since 2000.” Marsden is an economist, a fellow of the Centre for Policy Studies and a former adviser at the World Bank.

     “President Bush will leave to his successor an economy 19% larger than the one he inherited from President Clinton,” according to IMF data cited in Marsen’s op-ed. Unemployment rates were also lower on average under Bush than Clinton, Marsden said.

Networks Mostly Ignore Strong Growth

     The downbeat news media did Obama a favor the day of his acceptance speech by practically ignoring good economic news.

     GDP figures that contradicted the foreboding economic theme were ignored by two of the three major networks on August 28 – the day the Commerce Department announced a significant surge in second quarter GDP.

     GDP was revised upward to show 3.3 percent growth, a full percentage point more than expected. But CBS “Evening News” and NBC “Nightly News” ignored that encouraging sign on the night of Obama’s speech. ABC’s “World News with Charles Gibson” aired 13 seconds on the topic – but at least the network mentioned it.

     CNN’s Stephanie Elam also announced the GDP revision during the 10 a.m. hour of “Newsroom” on August 28. According to Elam, the last two quarters “were very dismal” but in the second quarter “the economy finally shifted into high gear.

     “Second quarter, economic growth came in at 3.3 percent. The fastest pace in nearly a year and that is considered a solid growth rate. That’s pretty good there. And it is much stronger than economists had expected,” Elam said.

     Elam didn’t stop there – instead she warned viewers not to be too encouraged by the news: “I don’t think we should glom [on] just yet. For the economy to really turn around growth needs to be sustained and analysts say that won’t happen until the housing and credit markets recover. So despite the strong reading, we still have to see what the second half of the year has in store for us.”

     But according to an IBD editorial there was room for optimism.

     “[W]e were struck by Thursday’s news that second-quarter GDP was revised up from 1.9% to 3.3%, more in line with boom than bust,” an editorial in IBD said. “But listening to the media and the Democrats in Denver, you’d think the economy was in a depression. Well, it’s not. In fact, we’re modestly optimistic. By the end of this year, all the really bad year-to-year comparisons in growth will be over. Sales and prices will start to look more normal. And the panic will leave the market.”

     That editorial cited other good news about fewer uninsured people and higher median household income – which rose to $50,233 in 2007 – a gain of 1.6 percent since 2001.

Networks Focus on ‘Recession,’ and ‘Depression’ – Even in Growth

     As they have for months, reporters continued to emphasize “recession” and “depressing news about the economy” from the start of the DNC and into the Republican National Convention, which began September 1.

     Chris Cuomo highlighted anxiety among Americans about the economy on August 28 “Good Morning America.” According to Cuomo’s “new insight,” a survey found that one-third of Americans can’t “make ends meet,” one-third said their credit card debt exceeds their retirement savings and two-thirds said it’s a bad time to “find a quality job.”

     Broadcast media weren’t lone pessimists. The Associated Press was also peddling negativity on September 2 – the day the Republican convention began. In a story about whether alcohol consumption increases or decreases during a troubled economy, AP cited “all that depressing news about the economy – job cuts, spiraling inflation, the mortgage mess.” The AP story didn’t question whether the economy was actually in trouble.

     By the second day of the Republican convention, CNN was still beating up the Bush economy. Co-host Kiran Chetry complained about the “tough” economy that Bush is leaving for the next president on “American Morning” September 3.

     Oddly enough, even a “Good Morning America” food segment on August 27 sent the subtle message that the economy is worse off than it is. While none of the people on the show mentioned recession, an onscreen graphic called the cooking story “Recession Recipes: 5 Money-Saving Cuts of Meat.”

     Emphasizing the negative during the conventions was nothing new for the mainstream media. The networks in particular had already hyped the economic downturn consistently throughout 2008. ABC’s Bianna Golodryga claimed the economy was “like a house of cards,” and ABC, CBS and NBC all hyped similarities between the current economy and the Great Depression more than 70 times just in the first six months of the year.

Praising Clinton – The Good Ol’ Days

     Obama also used his August 28 speech to praise former President Clinton for his economic policies.

     The Illinois senator cited Clinton’s “23 million new jobs” that were created and claimed that the “average American family saw its income go up $7,500 instead of go down $2,000, like it has under George Bush.”

     The next morning CNN presented a “fact check” about the Clinton economy, which business correspondent Christine Romans called the “incredible” ’90s.

     “Bill Clinton is and rightfully credited with being the president who resided over the longest economic expansion in American history,” Romans said. Romans did critically note Clinton’s “historic deregulation of the financial system” and role as “cheerleader” for record home ownership.

     But in the end, Romans gave the former president a pass: “Hindsight is always 20/20 … But you can’t really argue with some of these job creation and poverty numbers form the ‘90s. It was an incredible period.”

     But the Clinton years weren’t as “incredible” as Romans made it sound. He presided over the dotcom boom and bust which wiped out $3 trillion from investor portfolios, according to the Oct. 8, 2003 USA Today.

     The unemployment rate under Clinton averaged 5.2 percent compared to Bush’s 4.7 percent (2001-2007). Keith Marsden cited that fact in his Journal op-ed “Bush Has a Good Economic Record.”

     Yet, the media has historically given Clinton credit for his economic success (particularly for jobs), but downplayed Bush’s success – even when the data is about the same. According to a Business & Media Institute report from 2004, the media gave more favorable coverage to Clinton for the summer of 1996 than Bush for the summer of 2004 – time periods that were economically similar.

     According to that report, stories about jobs under Clinton were positive 85 percent of the time, more than six times as often as they were for Bush.

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