Despite an unemployment rate of nearly 10 percent, the Obama administration has claimed its stimulus package is working and economic recovery is on its way.
At a Labor Day picnic Sept. 7, Obama accused administration critics of having “selective amnesia” about the economy.
Despite an unemployment rate of nearly 10 percent, the Obama administration has claimed its stimulus package is working and economic recovery is on its way.
At a Labor Day picnic Sept. 7, Obama accused administration critics of having “selective amnesia” about the economy.
Meanwhile, the media have suffered their own memory loss: downplaying bad jobs numbers and forgetting the way they trashed the Bush economy when unemployment was under five percent and millions of jobs were being added.
“Some people have already forgotten how bad it was just seven months ago. You noticed that. They have selective amnesia,” the president said according to [1]ABC News.com. “Our Recovery plan is working.”
A few days earlier on Sept. 3, Vice President Joe Biden touted the 200-day marker of the $787 billion stimulus package saying, “[T]he Recovery Act has played a significant role in changing the trajectory of our economy, and changing the conversation about the economy in this country. Instead of talking about the beginning of a depression, we're talking about the end of a recession – eight months after taking office."
Five months earlier Biden praised a Minnesota New Flyer bus factory, touting it as a “ [2]symbol of the stimulus.” But according to The New York Times, the company “pictured as a stimulus success story began laying off 320 people, or 13 percent of its work force.”
Some in the media have joined Obama by declaring the recession over and have even done what they could to spin bad news about rising unemployment into good news. That’s exactly what Jenna Wolfe did on NBC’s “Today” Sept. 6.
Wolfe told viewers, “[C]oming up this morning, while unemployment rate is at a 26-year high, there are actually some glimmers of hope.”
Kate Snow also sought to encourage “Good Morning America” viewers on Sept. 5 by similarly spinning the latest jobs data: “The nation's unemployment rate stands at a staggering 9.7 percent. But the pace of job losses is actually slowing down. And that has some economists thinking we may be turning a corner.”
Last month, network journalists called the tiny drop in unemployment rate (9.5 percent to 9.4 percent) “good news for the administration,” “signs of hope” and “better than expected news.”
But not all economists agree. In fact, a recent study by economists Nathanael Smith and Charles K. Rowley warned of “catastrophic” economic consequences if the “spend more” strategies of the government are not stopped. They say “prosperity and full employment in the
Business & Media Institute adviser Don Boudreaux told BMI that until unemployment falls “steadily and significantly, it’s premature (in my view) to talk about the recession being over.”
Even CNBC’s Jim Cramer warned on Sept. 9 that all the government spending could result in a bear market.
“ [4]I know that this is going to mean our taxes are going to go way up,” Cramer said. “I have to tell you this eventually means this market will come down. It is in what I call the out years, not to worry about it yet. It weighs on me every day. It should weigh on you too and if there isn’t some discipline in Congress, we’re going to be talking about a new bear market in 18 months if we don’t get this stuff under control.”
Where are the jobs?
The media promote the importance of employment as an economic indicator, but only when it suits them. Under Obama, news anchors continue to downplay its significance, as NBC’s Lester Holt did Sept. 5:
“But jobs are just one economic indicator, and there are other signs, some of them more positive, to tell you about,” Holt said on “Today” one day after the August jobs data was released.
In August 2009 the unemployment rate rose to a 26-year-high, 9.7 percent, after another 216,000 people lost their jobs. According to the [5]Bureau of Labor Statistics the number of discouraged workers – people no longer looking for work – nearly doubled in the past 12 months to 758,000 people.
Since Obama took office, more than 3 million people have become unemployed:
February -681,000
March -652,000
April -519,000
May -303,000
June -463,000
July -276,000
August -216,000
On Sept. 7 NBC’s Natalie Morales was one of the few journalists to point out the information about discouragement in the work force. While interviewing Labor Secretary Hilda Solis, Morales said, “[N]ot included in that number, the millions who are – have pretty much given up their job search or taken part-time work instead, or have chosen to retire early. The underemployment number jumped to 16.8 percent last month from 16.3 percent. So what encouragement can you give these people, and where are the jobs to be found?
On Sept. 4, ABC’s Bianna Golodryga and Bill Weir were trying to look on the bright side in anticipation of the August job losses. Bianna said 200,000 job losses were “expected.” “That may not sound so great, but it does mean that job losses are slowing.” She also reminded viewers that employment is a “lagging indicator” of the economy.
Bill Weir replied, “But knock wood, maybe things are turning around.”
But contrast that report with better times and the hypocrisy of the media becomes apparent. In January 2006, the unemployment rate fell to 4.7 percent – the lowest in four and a half years – while 193,000 jobs were added.
A year long [6]study from BMI about employment coverage under the Bush administration found that just over half the stories focused on job losses and downplayed gains in a year that saw 2 million jobs created. Yet, network viewers in 2005 were told a frightening story that “GM is carving up its work force like a Butterball turkey” and that the [7]“jobs picture is looking very ‘pink’ these days.”
Another [8]Special Report from BMI found that when similar economic conditions existed during the
Giving the Stimulus Credit
Obama and others in his administration claimed that the stimulus package has begun to turn the economy around. Some in the news media (who campaigned for the stimulus package early in 2009) have sought to prop up those statements.
On Aug. 9, ABC’s “This Week with George Stephanopoulos” discussed the effectiveness of the $787 billion stimulus package.
Stephanopoulos interviewed former Bush strategist Matthew Dowd and said, “Now that the stimulus is working …”
Dowd interrupted: “I don’t see how – that’s an interesting argument. Twelve percent of the stimulus package has actually been actually spent. So we had an $800 billion stimulus package. And something around $100 million is actually spent. I don't know of any economist who actually could say $100 billion in a $12 trillion economy.”
Stephanopoulos replied, “Well it said the Goldman Sachs economists look at it and say it made about a 3 percent difference in GDP.” Then Cokie Roberts jumped in optimistically noting, “the fact that the unemployment rate is going down instead of up. People are taking a big sigh of relief.” Roberts was referring to the July 0.1 percent drop in unemployment between June and July, before it increased 0.3 percent in August.
CBS’s Chip Reid announced an upcoming Obama speech on “Early Show” Aug. 25, but didn’t question the president’s assertion that the stimulus plan and Wall Street bailout “helped turn the economy around.”
But even supporters of the stimulus package cautioned that “it’s a stretch” to give it credit for economic recovery.
Lakshman Achuthan of the Economic Cycle Research Institute told CBS “Early Show” Aug. 18, “The stimulus package was very important in terms of stabilizing confidence. However, it’s a stretch to say that we’re having a recovery because of the stimulus package.”