Leave it to ABC to air extreme examples of financial concern to cast doubt on optimism amid troubling financial news.
While conservative economists have criticized the trend of government bailouts for troubled financial institutions – and the policies that set the institutions up for failure – some experts are predicting the $85 billion buyout of American International Group (AIG) could end up
“We still think the taxpayer should make money on this transaction,” Andrew Kligerman, an insurance analyst for the financial services firm UBS, said to “World News with Charles Gibson” September 17.
Rather than addressing Kligerman’s claim with historical evidence or other expert opinion, ABC business correspondent Betsy Stark turned to two man-on-the-street-style interviews to highlight extreme cases of concern.
“It’s a disgrace what’s going on,” one unidentified man said to ABC. “The people that should actually be being bailed out are homeowners that are suffering.”
“I have very little confidence,” an unidentified woman said. “I want to take my money and put it under my mattress.” The woman’s comment inspired comparisons to sentiments felt during the Great Depression.
The media have repeatedly relied on comparing current economic conditions to the Great Depression, according to the Business & Media Institute report, “The Great Media Depression [1].”
In the past when experts provide optimistic outlooks for the economy, the media have turned to “man-on-the-street” interviews to pretend the opposite is true [2]. The 2006 BMI report “Bad News Bears [3]” showed that the media overwhelmingly favor negative “man-on-the-street” interview subjects over positive ones.
According to the September 17 “World News” segment, recent bailouts have burdened taxpayers with $816 billion, including $29 billion for JP Morgan (NYSE:JPM [4]) to takeover Bear Stearns in March, the recent $200 billion Fannie Mae and Freddie Mac nationalization, the $85 billion bailout of AIG, a $400 billion credit line to banks during the crisis and $102 billion in Federal Housing Administration (FHA) loans.
But consumer confidence had been showing some gains in recent weeks [5] prior to the fall of Lehman Brothers (NYSE:LEH [6]), the Bank of America (NYSE:BAC [7]) purchase of Merrill Lynch (NYSE:MER [8]) and the government bailout of AIG – as oil prices began to fall and causing gas prices to do likewise.
“World News” wasn’t the first network to air the money-in-the-mattress cliché. NBC’s Steve Liesman joked that “there’s always the mattress” when “Nightly News” anchor Brian Williams asked July 14 [9] if “other than my basement, is there any safe haven?”