The CNN business anchor conceded the economy was strong, but still said it was plagued with serious weaknesses, among them an investor confidence index, which he noted had just rebounded from a two-year low. Focusing on that detail, he ignored the stock markets strong numbers.
Dobbs also skipped over the Conference Boards Consumer Confidence Index, even though Storm asked him about it. The Board noted in its press release [1] accompanying the November data that American consumers have a positive outlook not only on present conditions but future economic growth and job opportunities.
Some other myths promoted by Dobbs:
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Recent layoffs at General Motors point to a domestic
manufacturing sector which has frankly been decimated over
the past five years.
While Detroits Big Three automakers are laying off workers in response to the weight of labor and pension costs [2], foreign automakers like Toyota, Nissan, and Hyundai, are steadily gaining market share, and creating jobs in the United States. The December 6 Wall Street Journal reported ongoing efforts by Toyota, Nissan, and Hyundai to open facilities in the United States, particularly Michigan, and to hire recent college graduates as engineers, while the December 6 Detroit News [3]reported that Toyota is considering opening an engine plant in Michigan. Meanwhile, about an hour after Dobbs wrapped up his interview with Storm, the Bureau of Labor Statistics [4] released a third-quarter report on productivity, which showed strong gains for manufacturing productivity (3.4 percent) overall and a whopping 6.5 percent boost in productivity for durable goods, including but not limited to automobiles and heavy machinery.
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Dobbs scoffed at analysts who say inflation is low:
economists love to throw out the core inflation throw out the
energy and food prices and come up with something called the core
rate. In point of fact, all of us use energy and all of us are
eating.
In point of fact, the Harvard graduate is insulting viewers by confusing the issue. Core inflation [5] is defined as a measure of inflation that excludes certain items which face volatile price movements, because temporary price shocks can diverge from the overall trend of inflation and give a false measure of inflation. The sharp post-Hurricane Katrina spike in gas prices which has since steadily declined is one such example.
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Dobbs cited a $700 billion trade deficit and a 4 trillion
trade debt as something that the United States must come to
terms with.
The Cato Institutes Daniel Griswold [6] writing in the February 25 Financial Times documented how the trade deficit is an accounting abstraction which doesnt correlate to job creation and economic growth. Asked Griswold, If a rising trade deficit is responsible for shipping jobs overseas, how do the critics of trade explain the fact that unemployment rises when the trade deficit shrinks and falls when it expands?
The Business & Media Institute recently published [7]a comprehensive look at the Emmy-winning business anchors history of biased economic coverage.