“It’s the economy, stupid.” How many times will we hear that line, originally uttered by Democratic operative James Carville in 1992, repeated this election cycle by the media?
Already in 2008 it’s been used at least once on the “NBC Nightly News” and five times in news broadcasts by the three major networks – ABC, CBS and NBC.
“Sixteen years after ‘It’s the economy, stupid,’ it still is,” CNBC’s Carl Quintanilla said on the February 25 “Nightly News.” Quintanilla co-anchors the CNBC morning program “Squawk Box.”
Quintanilla looked to the remaining presidential candidates – Republicans Sen. John McCain (
“Take housing – only two candidates have proposed specific rescue plans for the two million homes expected to foreclose this year,” Quintanilla said. “Senator Obama wants a $10 billion fund to help homeowners, while Senator Clinton is more aggressive. She wants a five-year freeze on those adjustable mortgage rates that are now resetting higher.”
Quintanilla admitted freezing interest rates would “scare lenders away,” but he ignored the possibility that such legislation could be unconstitutional [1] – violating Article I, Section 10 of the U.S. Constitution [2], which deals with contracts.
Megan McArdle of The Atlantic Monthly warned that if
“This move will leave them with a lot less money to loan out to anyone else, so hello, higher mortgage rates,” McArdle wrote on February 14. “Higher mortgage rates, for those following along at home, generally mean lower house prices, which means that the problem of negative equity will get worse. In other words, Senator Clinton would like to destroy the mortgage market in order to save it.”
The other issue Quintanilla singled out was taxes. He called McCain and Huckabee “anti-tax” and acknowleged that Obama and Clinton would raise taxes, but he justified tax hikes as “money toward tax credits for the poor and middle class.”
However, “it’s the economy, stupid,” might be a gross oversimplification. According to CNBC’s Erin Burnett, despite the housing woes and higher energy prices, there are some positive things going on in economy that Quintanilla overlooked.
“[Y]ou could also look at unemployment,” Burnett said on MSNBC’s February 26 “Morning Joe.” “It has risen a little bit but it is still at an amazingly low rate historically. Wages are growing. You can see there are positive things out there that might indicate we’re in not a recession right now. It’s hard to tell. The bottom line is it’s hard to tell, we won't know.”
“But, I think one thing that might be significant, in addition to Federal Reserve rate cuts is actually the stimulus package that we got out of Washington,” Burnett continued. “If those checks arrive in early May and are spent, that might be something that does significantly help. Some estimates are that could add rather significantly to economic growth in the second quarter – so the jury’s out.”
Burnett’s balance on the issue is to be applauded, but her reliance on the stimulus package [4] to boost the economy might be misplaced. The media have largely ignored critics of the plan [5].
According to an “open letter” from the National Taxpayers Union to the U.S. Congress [6], “plan has some questionable elements.”
“Despite claims by its proponents, this plan will not lead to the kind of economic stimulus that has been advertised,” the letter read. “Congress has no mechanism for ‘creating’ additional wealth in