Economic
activity in the U.S., turned negative in the fourth quarter of 2012
according to the Commerce Department, just one day after a huge drop in
consumer confidence was announced.
This
took the media entirely by surprise. It was the first time the economy
went into negative territory since the recession ended. But this
significant report was completely ignored by NBC “Nightly News,”
carefully danced around on ABC “World News” and downplayed on CBS
“Evening News” on Jan. 30. Print outlets downplayed the news by claiming
it was “not so bad.”
CBS’s
Scott Pelley announced the -0.1 percent GDP growth in the fourth
quarter on “Evening News,” much to his credit, since neither of the
other two broadcast network newscasts admitted it. He even pointed out
that third quarter growth had been much higher: 3.1 percent. But he
still introduced Anthony Mason’s report saying, “a shrinking economy
over time spells recession but don’t panic yet this number is likely to
be revised ...”
In contrast to his time as the economic “grim reaper [1]” during the Bush years, Anthony Mason delivered a “silver lining” report about consumer spending, homebuilding and imports.
Mason
said “only government spending cuts on defense caused overall economic
growth to flatline.” That claim about “sharp government spending cuts”
was also pushed in an Associated Press story that The Washington Post
ran as well as a front page Post story on Jan. 31, but The Competitive
Enterprise Institute’s senior fellow in finance and access to capital
disagreed with such claims.
“Exports may have dropped, and it’s unclear what was meant by sluggish growth in company stockpiles. But spending definitely did not decline in the fourth quarter of 2012,” [2]
CEI’s John Berlau said. Rather, he said a more likely reason for the
contraction was the “realization of the ‘regulatory cliff’.”
Specifically, Berlau cited the impact of ObamaCare, Dodd-Frank and
regulatory actions by agencies like the EPA.
In
Mason’s CBS report, he also told viewers that the federal government
attributed the drop in growth to weather disruptions like Sandy and
concluded his story saying, “As one economist put it, ‘It’s the best
contraction in the U.S. economy you’re ever going to see.’” That quote,
published in The Wall Street Journal was disputed by Bob Brusca, chief
economist of FAO Economics, on CNBC Jan. 31.
Brusca said flat out, “I don’t agree with that. [3]”
He cited a couple “bad trends” he sees including declining imports and
exports, and “consumer confidence falling off a cliff.”
“Why
does the consumer feel so bad if everything is so wonderful,” Brusca
asked on CNBC’s “Squawk Box.” He said that some people say they see the
economy accelerating, but “I just don’t see that.”
ABC
deftly downplayed the bad news, not mentioning the term GDP until
midway through the Jan. 30 segment. Anchor Diane Sawyer announced that
the Dow Industrial Average was “flirting with” 14,000. She attributed
the climb to a “rocket ride of economic energy” but admitted a “new
report on growth created a speed bump.”
Sawyer
then turned to David Muir who set out let boomers know if they can
believe in the recovery. Onscreen the question was “Can you trust the
soaring economy?” While stocks may be soaring, other indicators His
conclusion ultimately was that the “foundation” for recovery was “real.”
The
only actual mention of GDP was when Muir said, “ABC News reached out to
a team of economists who said today’s blip in the stock market run,
comes after a slight slowdown in GDP, the country’s economic output.”
Many
other news outlets also sought to blunt the bad news. Continuing the
left-wing theme that government spending/stimulus is the solution, AP
wrote that “the likelihood of another recession appears remote,” unless
of course there are more government spending cuts. The Jan. 31, USA
Today Front page headline read “Dip In Economy Not So Bad.” Time
magazine also made excuses with its headline: “Why Today’s GDP Report Isn’t As Bad As It Looks [4].” And Bloomberg Businessweek’s headline claimed “R-Word for U.S. Economy in 2013 is Rebound Not Recession.” [5]
Just
a day before the GDP rate was released, consumer confidence also took a
nosedive: falling 8.1 points in January to a 14-month low of 58.6. That
night only ABC mentioned consumer confidence, although he completely
ignored the latest information on the subject. After an upbeat story
about a “comeback [6]”
in the housing market, David Muir said good news about homes boosts
consumer confidence. “Evening News” and “Nightly News” both ignored the
data as well, but found time to cover a host of less important topics.