Media Seek Silver Linings in Economic Storm Clouds
Recently, the economic news has been troubling. The latest jobs report showed another month with net losses, GDP was revised downward to a “tepid” 1.6 percent for the second quarter and others sectors like housing have still shown signs of weakness.
Obama’s “recovery summer” came to a close with 14.9 million Americans unemployed and many worried about the overall economy. Some politicians are worried about being unemployed come November if the economy continues to crawl.
The administration wanted the summer of 2010 to support Obama’s claims that recovery was underway thanks to the stimulus package and numerous bailouts. So Obama and other administration officials announced a tour of infrastructure groundbreakings around the country – projects paid for by the $787 billion “recovery act.”
But that costly legislation and other stimulus attempts have failed, even by the Obama administration’s own standards according to nearly 100 economists. US News & World Report found that almost 100 “prominent” economists wrote a letter to the president in June 2010 telling Obama the stimulus failed and federal spending must be reined in.
Yet the mainstream media have gone out of its way to bolster the stimulus, crediting it with jobs (saved or created) in towns across the country. Rarely have journalists taken Obama to task for his grandiose and empty promises about job growth as the result of the stimulus. And as bad news about jobs and other economic indicators has stacked up against the White House, journalists have continued to hunt for silver linings in storm clouds.
On Sept. 3, “American Morning” found the “bright spot” in August’s loss of 54,000 jobs. Ali Velshi called the report a “glass one-quarter full,” but his two guests that morning were upbeat. Speaking of the 9.6 percent unemployment rate, Shawn Tully of Fortune magazine told viewers “This is actually not such bad news.”
The news media began looking for good economic news early in the Obama presidency, desperate to credit him for turning things around. Newsweek even surprised Obama by declaring the recession over in its Aug. 3, 2009 issue. Broadcast networks also jumped on the bandwagon interviewing economists like Lakshman Achuthan who told CBS the economic indicators “are emphatic that recovery begins this summer .”
Although GDP showed gains beginning in the third quarter of 2009, the April 13, 2010 Wall Street Journal reported that the economists who decide when recessions begin and end “stopped short of calling an end to the downturn that started in December 2007.”
Summer of Recovery that Wasn’t
“As part of Recovery Summer, President Obama, Vice President Biden and other administration officials will travel to more than two dozen Recovery Act project sites in the coming weeks, highlighting the surge in project activity and the Recovery Act’s steady climb to 3.5 million jobs by the end of the year,” the White House press release said.
CBS followed the president to Ohio the next day and promoted his tour. Katie Couric said, “With the oil spill dominating so much of the news, President Obama wanted to remind everyone today he hasn’t forgotten about unemployment, which remains close to ten percent. So he went to Ohio to mark a milestone.”
What milestone? The 10,000th project paid by stimulus package that the news media sold as a huge job creator. Couric noted that the recession wiped out more than eight million jobs, but stressed that nearly 900,000 jobs were created in November 2009. Couric’s brief report had no criticism of the Obama administration’s handling of the economy.
One night later, on June 19, CBS’s Jeff Glor cited an improvement of the unemployment rate in 37 states calling it “one more sign the economy may be improving overall,” as the lead in to a story about four struggling families.
On the subject of jobs, the media have grasped for any positive indicators they can find, but have rarely criticized Obama for the lengthy stretch of high unemployment. In 2009, the rate hit a 26-year-high and the United States saw the most jobs lost in a single year since 1940, yet journalists omitted the failure of the stimulus package and refused to hold Obama accountable for the jobs losses.
The media were thrilled when the May jobs report came out reflecting the hiring of 411,000 temporary Census employees, even though those jobs would only last a couple of months. Headlines at CNN.com and other outlets emphasized the “fastest pace” of job creation in 10 years.
But now Obama’s “recovery summer” has gone bust. According to James Pethokoukis, Money and Politics columnist for Reuters, it “must have looked like a pretty safe wager for the Obama administration” at the beginning of June. Jobs were added in the spring and the economy was growing, but as Pethokoukis noted “the economy has fallen back to earth.”
He cited a number of concerning economic data, including falling private sector job growth, very high unemployment and a growing number of people too discouraged to look for work.
‘Green Shoots,’ Silver Linings and ‘Glimmers of Hope’
It doesn’t seem to matter how bad the economy gets under Obama’s leadership, the mainstream media cling to whatever small piece of good news they can find.
That’s exactly how journalists have spun many of the monthly jobs reports – by emphasizing the unemployment rate over the number of jobs lost or vice versa depending on which sounded better.
After 54,000 jobs were lost (net) in August and the unemployment rate ticked back up to 9.6 percent, CNN emphasized that 67,000 private-sector jobs that had been created and found two economists to talk up the economy. Just two days later on Sept. 5, CNN’s Ali Velshi said, “There are fresh signs of an economic recovery, but where are the jobs?”
At least as far back at April 2009, media outlets were starting to talk about “green shoots” in the economy. Ben Bernanke likely started the trend after telling “60 Minutes” he detected some “green shoots” of economic recovery.
Journalists in particular embraced the phrase along with others like silver lining, “bright spot,” and “glimmers of hope.” Newsweek, all three broadcast networks, major newspapers like The New York Times and Washington Post and other outlets have mentioned “green shoots” when discussing the economy since Obama took office. Some have used the good news to bolster the president.
Former Clinton administration official George Stephanopoulos was upbeat about an “economic turnaround” on “This Week” Aug. 2, 2009. “The president’s poll numbers may be wilting a bit in the summer heat, but each day this week brought those economic green shoots he’s been counting on,” he said.
“Monday, new home sales jumped, the biggest monthly increase in eight years. Tuesday, home prices, their first increase in three years. Wednesday, a surprising step up in manufacturing activity. Thursday, new jobless claims fall to their lowest level since January,” Stephanopoulos said. “And Friday, the clearest sign yet that the recession might be easing. Second-quarter growth falling much more slowly than expected as the stock market capped off its best month since 2002.”
Context, however, shows the wishful thinking – or spinning – behind those remarks. The ABC anchor was talking up the economy because growth fell more slowly than it had been – not because the economy was actually growing.
On Nov. 24, 2009, Jim Cramer spoke of “areas of encouragement” despite “horrible” unemployment numbers on the “Today” show with Matt Lauer.
LAUER: One in 10 Americans out of work in this country right now. Got other people who are underemployed, then there are the whole group of people who are worried about losing their jobs.But you keep hearing economists and experts talk about green shoots.
LAUER: These are – these are areas of encouragement. What do you see as green shoots right now?
CRAMER: Auto sales, not bad. October, pretty good.
LAUER: Post cash for clunkers?
CRAMER: Yeah. November, not bad. We don't have a lot of cars, excess inventory. There's not a lot of excess inventory at retailers. Retailers are saying that November's been pretty good. We also saw a very good number for existing home sales, some stabilization. Those are all three very good signs, Matt.
In contrast to the pro-administration media, CNBC’s Rick Santelli has brought perspective to many economic stories including the issue of unemployment On March 29, 2010, Santelli warned that the “traditional media” would overplay the upcoming jobs report that would probably show lower jobless numbers. Santelli explained that the report would mislead because of many temporary census jobs that would be included.
“Well, you know I think the market, many want to believe, many want to believe in the green shoots,” Santelli said. “They want to believe that optimism is part of the medicine. You know, I'm not sure if I'm in that camp but I think there's going to be a couple or three months in a row here, where whether it's GDP or whether it’s job data, that's going to have the possibility to look better.”
“I think those that understand that this type of job creation isn't going to last and it isn't going to ultimately make up the 200,000 we need just to remain neutral, but it will move markets, yes. And I think interest rates on this holiday Friday, should we get a 250,000 or higher number, is going to be wild. And it shouldn't be, but it will,” Santelli concluded.