Fox "Straight News" "Save[s] The Economy" With Right-Wing Talking Points
In a series of segments called 10 Ways to Save the Economy, Fox News' Special Report with Bret Baier promoted conservative talking points on the financial crisis, stimulus package, estate tax, and deregulation. The segments also frequently echoed the viewpoint of Fox News' conservative opinion programming. None of the ten segments advocated measures favored by progressives to help the economy.Historically conservatives have always been the party to evade responsibility for their actions. They lied about Iraq, WMD and connection to al Quaeda. Several hundred thousand people died, including over 4000 Americans based on those lies about Iraq. What has been the reply of radical Republicans - it was all worth it. The very same Republicans crashed the economy with their hands off economic policies - just let the too big to fail financial institutions do what they want and everything will be OK. That turned out to be a disaster of world wide consequence. They're lying about the economy now because, like Iraq, they are avoiding responsibility for their policies and the consequences of their decisions. The worse thing Obama has done is try to steer a course that was mostly conservative - three tax cuts for example - instead of pursuing more stimulus. Obama is guilty of not rebuilding the house Republicans burned down fast enough and that is about all he is guilty of.
Save The Economy Segment Pushed Claim That Government Programs For "Low Income Borrowers" Caused Financial Crisis
Save The Economy Segment Suggested That Government-Encouraged "Expansion Of Mortgage Lending To Low Income Borrowers" Caused Housing Bubble To "Burst." From the June 21 edition of Fox News' Special Report
...Rosen's Analysis Of Housing Bubble Similar To Right Wing Media's Previous Attacks On Legislation Which Encouraged Lending To Low And Moderate Income Neighborhoods, Such As Community Reinvestment Act. Following the financial crisis the conservative media, echoing reported Republican strategy, blamed affordable housing initiatives for the economic downturn. The primary initiative that came under scrutiny was the Community Reinvestment Act, which encourages lending to "low and moderate income neighborhoods." However, as Media Matters has documented, these right-wing attacks relied on several myths and falsehoods. [Media Matters, 10/10/08, 10/14/09, 11/16/09, 4/20/10]
In Fact, Fed Chair Bernanke Said Experience "Runs Counter To The Charge That CRA Was At The Root Of, Or Otherwise Contributed In Any Substantive Way To, The Current Mortgage Difficulties." In a November 25, 2008, letter Federal Reserve chairman Ben Bernanke said: "Our own experience with CRA over more than 30 years and recent analysis of available data, including data on subprime loan performance, runs counter to the charge that CRA was at the root of, or otherwise contributed in any substantive way to, the current mortgage difficulties." [Board of Governors of the Federal Reserve, Letter to Honorable Robert Menendez, 11/25/08]
Law Professor Barr: Most Subprime Mortgages Were Not Issued By Banks Covered By The CRA. In testimony before the House Financial Services Committee, Michigan law professor Michael Barr said that while problems in the subprime lending industry were a driving force behind the housing crisis, only an estimated 20 percent of subprime mortgages were issued by depository institutions under the CRA. In his testimony, Barr stated:
Despite the fact that CRA appears to have increased bank and thrift lending in low- and moderate-income communities, such institutions are not the only ones operating in these areas. In fact, with new and lower-cost sources of funding available from the secondary market through securitization, and with advances in financial technology, subprime lending exploded in the late 1990s, reaching over $600 billion and 20% of all originations by 2005. More than half of subprime loans were made by independent mortgage companies not subject to comprehensive federal supervision; another 30 percent of such originations were made by affiliates of banks or thrifts, which are not subject to routine examination or supervision, and the remaining 20 percent were made by banks and thrifts. [House Financial Services Committee Testimony, 10/10/08, via Media Matters]
Law Professor Barr: "The Worst And Most Widespread Abuses Occurred In The Institutions With The Least Federal Oversight." Barr also said:
Although reasonable people can disagree about how to interpret the evidence, my own judgment is that the worst and most widespread abuses occurred in the institutions with the least federal oversight.
The housing crisis we face today, driven by serious problems in the subprime lending, suggests that our system of home mortgage regulation, including CRA, is seriously deficient. We need to fill what my friend, the late Federal Reserve Board Governor Ned Gramlich aptly termed, "the giant hole in the supervisory safety net." Banks and thrifts are subject to comprehensive federal regulation and supervision; their affiliates far less so; and independent mortgage companies, not at all. Moreover, many market-based systems designed to ensure sound practices in this sector-broker reputational risk, lender oversight of brokers, investor oversight of lenders, rating agency oversight of securitizations, and so on -- simply did not work. Conflicts of interest, lax regulation, and "boom times" covered up the extent of the abuses -- at least for a while, at least for those not directly affected by abusive practices. But no more. [House Financial Services Committee Testimony, 10/10/08, via Media Matters]
Fox's Save The Economy Segment Pushed Dubious Claims About Tax Cuts
Save The Economy Segment Suggested That Lowering Taxes, As It Claims Reagan Did, May "Stimulate" The Economy. From Fox News' Special Report with Bret Baier:
...In Fact, "No Peacetime President Has Raised Taxes So Much On So Many People" As Reagan. In his New York Times column, Nobel Prize winning economist Paul Krugman described Reagan's actual tax record:
Mr. Reagan presided over an unmatched economic boom. Again, not true: the economy grew slightly faster under President Clinton, and, according to Congressional Budget Office estimates, the after-tax income of a typical family, adjusted for inflation, rose more than twice as much from 1992 to 2000 as it did from 1980 to 1988.
But Ronald Reagan does hold a special place in the annals of tax policy, and not just as the patron saint of tax cuts. To his credit, he was more pragmatic and responsible than that; he followed his huge 1981 tax cut with two large tax increases. In fact, no peacetime president has raised taxes so much on so many people. This is not a criticism: the tale of those increases tells you a lot about what was right with President Reagan's leadership, and what's wrong with the leadership of George W. Bush. [The New York Times, 6/8/04]
Politico: Reagan "Repeatedly Signed Deficit-Reduction Legislation In The 1980's That Melded Annual Tax Increases With Spending Cuts." In an article titled "Ghost of Gipper looms over GOP," Politico's David Rogers wrote: "[A] POLITICO review of Reagan's own budget documents shows that the Republican president repeatedly signed deficit-reduction legislation in the 1980's that melded annual tax increases with spending cuts just as President Barack Obama is now asking Congress to consider." Media Matters has also documented that this part of Reagan's legacy is often overlooked.
Economists Agree That Lowering Taxes For The Wealthy Does Not Necessarily Create Jobs. As Media Matters has documented, economists agree that lowering taxes for the wealthy does not create jobs. In fact, Tax Policy Center economist Howard Gleckman noted that "higher income households are more likely to bank the cash than spend it." Analysts at the CBO have also wrote that "increasing the after-tax income of businesses typically does not create much incentive for them to hire more or produce more, because production depends principally on their ability to sell their products." [Media Matters, 4/14/11]
Save The Economy Segment Suggested The Stimulus Didn't Work
Save The Economy Segment Pushed Right-Wing Talking Point That The Stimulus Did Not Work. The June 24 Special Report segment on how to "save the economy" "look[ed] at whether massive government spending has ever been the right answer." After presenting arguments from both sides, correspondent Doug McKelway said: "If there are any experts to answer the question of whether stimulus programs work, it might be the voter. In the year 2010 in 1936 voters, fed up with stimulus programs, elected conservative majority to Congress, majorities philosophically opposed to saving economy through the government spending."
Economists Largely Agree That The Stimulus Boosted Growth And Mitigated Job Losses. In March 2010, 70 percent of the 54 economists it surveyed "said the American Recovery and Reinvestment Act boosted growth and mitigated job losses." Furthermore, in a report on the effects of the American Recovering and Reinvestment Act of 2009, the non-partisan Congressional Budget Office noted that the stimulus added millions of jobs to the economy, raised real gross domestic product (adjusted for inflation) and lowered the unemployment rate. In June, the Center for Budget and Policy Priorities (CBPP) said the "economy has now grown for seven straight quarters." In its report the CBPP added that "economic activity ... [had been] contracting sharply when policy makers enacted the financial stabilization bill (TARP) and the American Recovery and Reinvestment Act." Moreover, the White House Council of Economic Advisors' quarterly report from March showed that the stimulus increased gross domestic product and lowered unemployment. [Media Matters, 6/10/11]
Contrary To McKelway's Report, Economists Say New Deal Did Not Worsen Depression -- His "Conservative Course" Did. After McKelway reported that the Congressional Budget Office claimed the stimulus had a positive effect on jobs, he added that just as "Roosevelt's New Deal was dealt a second recessionary blow in 1937, four years after it was enacted, there is debate whether the Obama stimulus has run out of steam." However, numerous economists have said that the 1937 downturn actually occurred because Roosevelt reversed his New Deal policies, not because he continued them.
Krugman: Roosevelt "Eager To Return To Conservative Budget Principles ... Precipitating An Economic Relapse That Drove The Unemployment Rate Back Into Double Digits." [New York Times, 11/10/08]
Economist Dean Baker: FDR "Worried About The Whining Of The Anti-Stimulus Crowd ... When The Proper Goal Of Fiscal Policy Should Have Been Large Deficits To Stimulate The Economy." [Alternet.org, 1/6/09]
Economist Brad DeLong: "[M]ore 'Orthodox' Economic Policies" And Attempt "To Move The Budget Toward Balance ... Provide Ample Explanation Of That Downturn." [DeLong.typepad.com, 11/17/08]
While Attacking Obama's Jobs Record, Fox Regularly Ignores Statistics Showing The Stimulus Created Jobs. Fox regularly argues that the stimulus did not create jobs and that government spending does not work to stimulate the economy. In fact, as McKelway himself noted, "the Congressional Budget Office found the stimulus helped the economy." Furthermore, according to a March 2010 study by The Wall Street Journal, 70 percent of economists surveyed said the stimulus "boosted growth and mitigated job losses." [Media Matters, 6/13/11, 6/6/11, 5/31/11, 2/27/11, 2/18/11]
Two Save The Economy Segments Pushed Right-Wing Talking Point That Obama Policies Cause "Uncertainty"
Save The Economy Segment Pushes Theory That Businesses Won't Invest Because Of "Uncertainty" Caused By Health Care Reform And Financial Regulation. The June 30 edition of the 10 Ways to Save the Economy special was dedicated to the "uncertainty" supposedly caused by regulations. From the June 30 edition of Fox News' Special Report..
...Fox Has Previously Pushed The Conservative Talking Point That Obama's Economic Policies Hurt The Economy By Leading To "Uncertainty" In The Private Sector. During the April 3 edition of ABC's This Week, former Bush administration official Torie Clarke asserted that "What will really get the private sector humming and hire a lot of people is if they have predictability and certainty about things like regulatory regimes and are some of these trade agreements going to go through that we really need." Reps. John Boehner and Kevin McCarthy also said that "uncertainty" on tax cuts was hindering job creation during the September 26, 2010, edition of Fox News Sunday. Several Fox anchors adopted the talking point soon after Boehner's and McCarthy's comments. [Media Matters, 4/3/11, 9/27/10]
Krugman: "Uncertainty Is Just A Myth Being Made Up" To Blame Economy On Obama. Responding to Torie Clarke's comments on This Week, Nobel Prize winning economist Paul Krugman said: "The reason businesses are not investing is that they have tons and tons of excess capacity. There is a very clear relationship historically between the amount of unemployment and business investment. When unemployment is high, when capacity is low, investment is low there is nothing -- all of this stuff about uncertainty is just a myth being made up to blame this on Obama." [ABC, This Week via Media Matters, 4/3/11]
Fox Concluded Its Series By Pushing Another Right-Wing Talking Point On Deregulation
...But Special Report Failed To Note That Obama "Order[ed] A Government-Wide Review" "To Remove Outdated Regulations That Stifle Job Creation And Make Our Economy Less Competitive." In a Wall Street Journal op-ed titled "Toward a 21st-Century Regulatory System," President Obama called for the United States to "strike the right balance" between regulations and their costs. He wrote: "Regulations do have costs; often, as a country, we have to make tough decisions about whether those costs are necessary. But what is clear is that we can strike the right balance. We can make our economy stronger and more competitive, while meeting our fundamental responsibilities to one another."
