The Wall Street Journal's Stephen Moore cited figures that independent analysts have called misleading to hype Florida Gov. Rick Scott's claims about his administration's job creation record.
In a post on the Journal's Political Diary blog titled "The Florida Phenom," Moore wrote that Scott's job creation record may "save him from defeat" in the upcoming gubernatorial race. Moore touted Scott's claim that his administration had already completed half his campaign promise to create 700,000 jobs by 2017, concluding "The thing most likely to save him from defeat is, as Joe Biden once put it, that three letter word: J-O-B-S":
Now the needles are all pointed in a northward direction, and the man in charge during the turnaround is Republican Gov. Rick Scott. He promised 700,000 new jobs in seven years, and in an interview last weekend he said, "we're half-way there." The state has seen employment rise by just over 350,000 since 2010. A new analysis by the nonpartisan Florida Economic Estimating Conference is expecting 900,000 new jobs by 2018.
Sure, there's a national recovery, but the unemployment rate in Florida "has fallen almost twice as much as the national average," the governor noted. Mr. Scott credits pro-growth policies. "We cut taxes 24 times," he said, including business and property taxes by $200 per homeowner. The budget deficit has been tamed. The housing oversupply has been cut by one-third.
Despite Moore's endorsement, Scott's job creation claims have been criticized by independent analysts. PolitiFact Florida pointed out that Scott's campaign promise was actually to create 700,000 jobs on top of the 1 million the state was already expected to add - in essence promising to create 1.7 million jobs by 2017:
The Wall Street Journal called for reform that would lighten the tax burden on corporations without noting that corporate tax revenue has reached historic lows in a time of historically high profits.
Following the May 21 Senate hearing into Apple's strategies to lighten its corporate tax burden, a Wall Street Journal editorial argued that the real issue was not the company's ability to dodge taxes, but the fact that U.S. corporate taxes are "the developed world's highest." The editorial concluded that the U.S. should lower its corporate tax rate to "ideally zero, but 12.5% also works."
The editorial's main argument that U.S. corporate taxes are too high hinges upon pointing to statutory corporate tax rates. In defending Apple's practices, it explains:
The genuine outrage is that Apple's profits in the U.S. are subject to a combined state and federal statutory tax rate of 39.1% that is the developed world's highest. Corporate taxation is so heavy in the U.S. relative to other countries that even while enjoying its near-zero rate in Ireland, Apple ends up with roughly the same overall effective tax rate, 14%, as South Korea's Samsung, its main global competitor.
The editorial cites statutory instead of effective tax rates for a reason. While the U.S. may rank among the world's highest in statutory corporate tax rates, what corporations typically pay is substantially lower. According to Goldman Sachs' David Kostin, in the last 45 years, the median S&P 500 firm has paid a tax rate that is substantially lower than the statutory rate due to special tax preferences, subsidies, and loopholes. Furthermore, most recent data suggest that the median firm pays an effective tax rate of 30 percent -- a full 9 percentage points below the statutory rate:
And according to the Wall Street Journal's own reporting, in FY2011, corporate tax receipts as a share of profits fell to their lowest level in 40 years. Indeed, as ThinkProgress notes, even as corporate profits have hit a 60-year high, the tax burden on U.S. corporations has hit a historic low. Furthermore, in recent years, corporate tax receipts as a percentage of total government revenue have significantly declined:
The Journal's claim that corporate taxation in the U.S. is high because of its statutory rate relative to the rest of the world also doesn't stand up to scrutiny. According to Citizens for Tax Justice, citing U.S. statutory rates in comparison to other countries is inherently misleading:
Many corporate leaders have noted that other OECD countries have lowered their corporate tax rates in recent years, but fail to mention that these countries have also closed corporate tax loopholes while the U.S. has expanded them. As a result, the U.S. collects less corporate taxes as a share of GDP than all but one of the 26 OECD countries for which data are available.
While there is broad bipartisan support for reforming the corporate tax code, The Wall Street Journal's misleading portrayal of corporate taxes stacks the deck in favor of corporations lowering their historically low tax burden.
As the Competitive Enterprise Institute (CEI) prepares to release its annual report on the cost of regulations, the media should be aware of the organization's documented and vested interest in attacking government regulations, as well as the report's flawed methodology and biased analysis.
According to a May 20 Wall Street Journal editorial, CEI plans to release its report on federal regulations for 2012, the cost of which CEI Vice President for Policy Wayne Crews estimates exceeded $1.8 trillion.
Conservative media will undoubtedly use the CEI's most recent report to criticize government regulation at large, and particularly the regulations enacted by President Obama.
Here are a few reasons why media should be wary of touting the CEI report.
Fox continued its effort to target the Obama administration with manufactured scandals, fearmongering that IRS commissioner Sarah Hall Ingram will use the IRS' authority under the Affordable Care Act to discriminate against conservatives by denying or postponing approval for medical procedures.
Fox News and Fox Business previously portrayed electric carmaker Tesla Motors as another "failure" of the Obama administration's green energy investments. But since it is now clear that the company is doing well, both networks have developed amnesia about its federal loan, with Tucker Carlson claiming that "they don't take any government subsidies at all."
Tesla recently reiterated its plans to repay a loan granted through the Department of Energy's Advanced Technology Vehicle Manufacturing program ahead of schedule. This followed a series of positive developments, including the company's first quarterly profits and a shining review of the Model S sedan by Consumer Reports. Financial services firm Morgan Stanley recently told Raw Story that "Many funds approach an investment opportunity by first asking: does the company do something better or cheaper than anybody else? Tesla is beginning to convince the market it may do both."
But no matter how Tesla fares in the coming years, it seems likely that Fox News will change its reporting to follow suit. In 2012, Fox News' claim that Tesla was a "failed" company was eventually adopted by the campaign of then-presidential candidate Mitt Romney. Later, Fox News admitted Tesla was a "success", eventually forgetting its federal loan in the process.
Video created by Max Greenberg and John Kerr.
Following months of media calls for deficit reduction, cable news channels spent just over 7 minutes reporting on a revised Congressional Budget Office (CBO) projection that the 2013 deficit will decline by more than previous estimates. Broadcast network news evening shows did not cover the new report.
Fox & Friends co-host Brian Kilmeade reacted to a new Congressional Budget Office (CBO) report showing the 2013 deficit dropping by $200 billion by lamenting that the report might discourage further austerity measures.
In a May 14 report, the non-partisan CBO estimated that in 2013, the federal deficit will be $200 billion lower than previously projected, the smallest deficit since 2008. The report also predicted that the deficit over the next 10 years will be $618 billion less than previously thought.
Kilmeade reacted to this news with calls for increased austerity, lamenting that the "positive news" in the CBO report might lead away from a mindset of "fiscal discipline." Kilmeade concluded, "I just hope we still feel the urgency to get our budget in order."
However, Kilmeade's concern may be misplaced. As The Washington Post's Ezra Klein noted in a May 14 post, the new CBO estimate makes the deficit look "downright manageable":
[T]he debt disaster that has obsessed the political class for the last three years is pretty much solved, at least for the next 10 years or so.
In fact, that's probably too much deficit reduction, too quickly.
Many economists agree that too much in spending cuts too quickly can hurt economic growth. In an April 27 post on his New York Times blog, Nobel Prize-winning economist Paul Krugman called continued efforts at deficit reduction through austerity measures "very bad policy," explaining that recent declines in government spending -- at the federal, state, and municipal levels -- have contributed to slow economic growth. Similarly, in a February 8 Guardian op-ed, the Center for Economic and Policy Research's Dean Baker asserted that "deficit reduction is throwing people out of work" and concluded that "we need deficits today to fill a huge hole in demand created by the private sector."
Additionally, data from the Bureau of Economic Analysis show that austerity has led to a decline in government spending, which has turned into a drag on economic growth:
Economic media coverage has been heavily focused on advocating for deficit reduction, even as deficits decline and the federal government posts a surplus.
A Media Matters analysis on economic news coverage in the month of April found that media continued their long-established focus on deficit reduction. In 45 of 123 total segments discussing policy impacts on the economy, guests or hosts on network and cable news advocated for deficit reduction as a priority.
Calls for deficit reduction beat out mentions of other economic issues, most notably the need for economic growth and job creation, and economic inequality.
The continued focus on deficit reduction is particularly interesting given the fact that, in the month of April, the federal government posted the largest budget surplus in five years. Furthermore, according to the Congressional Budget Office, current and projected deficits are expected to decline in coming years.
Even conservatives have recently acknowledged that deficit reduction is not the country's most pressing economic issue. House Speaker John Boehner (R-OH) and House Budget Committee Chairman Paul Ryan (R-WI), agreeing with President Obama, stated that the country is not facing an immediate debt crisis, a notion shared by prominent Democrats. And John Makin, a scholar at the conservative American Enterprise Institute, remarked that Congress has already enacted enough deficit reduction.
Meanwhile, economists have expressed concerns over media's focus on deficits, instead calling attention to resolving the very real immediate crisis of unemployment. Economist Jared Bernstein recently began a series on the path to full employment, and numerous other economists have advocated increased short-term spending to bolster economic growth and job creation.
Furthermore, former Labor Secretary Robert Reich has even pointed out that focusing on jobs and growth -- not spending cuts -- provides an effective avenue for deficit reduction.
From the May 14 edition of Fox News' America's Newsroom:
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Media outlets largely ignored economic inequality in discussions about the overall economy, despite mounting evidence suggesting that the problem has increased in recent years.
While media have been quick to highlight ostensibly positive gains for the economy -- notably that the Dow Jones Industrial reached 15,000 for the first time in its history, GDP grew by 2.5 percent in the first quarter of 2013, and unemployment for April edged down to 7.5 percent -- signs of rising income inequality have gone largely unmentioned.
According to a recent Media Matters analysis, economic coverage for the month of April barely mentioned issues of inequality. In 123 total segments discussing policy effects on the macroeconomy, only 12 touched upon the growing disparity in economic gains for the rich and the poor.
The discrepancy in covering economic inequality stretched across all major outlets. ABC, CBS, and NBC provided no mentions of the problem. MSNBC devoted the most coverage, with roughly 25 percent of segments on the economy discussing rising inequality.
While the media have pushed inequality out of the spotlight, mounting evidence suggests that the problem is getting worse.
As for the rising stock market, while any gains should be viewed as a positive for the economy as a whole, the distribution of those gains paints a less than perfect picture. According to a Gallup poll, 52 percent of Americans currently hold stocks, a number that has been consistently declining in recent years.
Other indicators highlight the deep-seated nature of economic inequality. According to Congressional Budget Office data, from 1979 to 2007 the top one percent of income earners have seen their after-tax share of total income rise by more than 120 percent, while the bottom 20 percent of earners have seen that share decline by almost 30 percent.
And according to an analysis by journalist David Cay Johnston, economic gains in recent history show an even darker reality - from 2009 to 2011, 149 percent of increased income was reaped by the top 10 percent of earners.
Meanwhile, the economy is currently suffering from an epidemic of long-term unemployed workers, which, as noted in a Bloomberg editorial, could create a permanent underclass of workers unable to reenter the labor force.
Some of the media's attention -- albeit very little -- has focused on the inequitable impact of sequestration on low-income individuals. The overwhelming majority of discussion of inequality in April, most notably on MSNBC, focused on Congress' unwillingness to mitigate the impacts of sequestration of the poor, while members were seemingly enthusiastic to correct inconveniences for those at the upper end of the income scale.
While some attention has been given to economic inequality, the broader trend in media is to ignore the issue, preferring instead to focus on the widely recognized non-issue of short-term deficit and debt reduction.
Evening news coverage throughout April touched upon several economic issues, including income inequality, deficit reduction, and entitlement cuts. A Media Matters analysis of this coverage reveals that many of these segments lacked proper context or necessary input from economists, while some networks ignored certain issues entirely.
The success of Tesla Motors complicates Fox News' narrative about green energy investments, but the network has a strategy: simply ignore the fact that the company received a federal loan.
Tesla, a leading electric automaker, received a $465 million loan guarantee from the Department of Energy's Advanced Technology Vehicles Manufacturing (ATVM) program in 2010. The company has since become a fixture in car magazines and one of the most conspicuous successes of the Obama administration's green energy policies, recently announcing that it intends to pay back the loan five years ahead of schedule and reporting its first quarterly profits. On the heels of the latter news came word that the notably tough reviewers at Consumer Reports had given the Tesla Model S sedan a 99 out of 100 rating, proclaiming "we've never seen anything quite like the Model S. This car performs better than anything we've ever tested before."
On Friday, Fox News reported the quarter one profits -- "encouraging" -- and the positive review, pronouncing the automaker a "huge success."
One major problem: somehow, Fox News neglected to mention the federal loan guarantee program that helped Tesla obtain vital capital to develop the Model S. By contrast, Fox News has repeatedly used a negative Consumer Reports review of Fisker's hybrid electric Karma sedan as a hook to attack the Obama administration's green loans, without mentioning successes like Tesla or the money that Congress set aside to cover losses, knowing that not every company would succeed.
While reporting that weekly jobless claims have fallen to a five year low, Fox News' Jenna Lee said that, "much of the job growth has come from fewer layoffs, not increased hiring, which begs the question whether it is real job growth at all." While Lee implied an inverse relationship between jobless claims and job growth, the U.S. Labor Department's first time unemployment claims report is only an indicator of layoffs, not job growth. In fact, the April jobs report showed that 165,000 jobs were added to the economy and the unemployment rate fell to 7.5 percent - the lowest since December 2008.
On the May 9 edition of Fox News' Happening Now, host Jenna Lee reported on the weekly initial jobless claims report issued by the Labor Department. Lee acknowledged that the numbers were encouraging but then erroneously framed the report as an indicator of slowed job growth, questioning "whether it is real job growth at all."
Lee's question implied an inverse relationship between the job growth and initial jobless claims report, which is a weekly report that tracks the number of Americans who apply for unemployment benefits. Jobless claims don't measure job growth, as Lee implies. The data are only a proxy for layoffs and necessarily do not measure job growth - if someone does not get laid off, that's a job maintained, not created. Contrary to Lee's suggestion, Bloomberg reported that, "Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates."
Lee questioned "whether it is real job growth at all." According to the report that actually tracks job growth, employers added 165,000 jobs in April and the unemployment rate fell to 7.5 percent -- the lowest it has been since December 2008. Private sector job growth has consistently risen since 2009:
But Fox News recently attacked that report, too. Their coverage was largely negative, despite the fact that economists generally agree that the report shows positive gains in the labor market.
Fox News' Stuart Varney portrayed a natural gas automaker as a "green energy failure," even though he pushed the federal government to make transit agencies buy vehicles from the same company only a few months prior.
Vehicle Production Group (VPG), a Michigan-based company that makes wheelchair-accessible vans, recently ceased operations and closed its offices. The company, which had drawn attention for designing the first vehicle specifically for people with disabilities, was awarded a $50 million conditional loan commitment in 2010 to develop vans with natural gas engines as part of the Department of Energy's Advanced Technology Vehicles Manufacturing (ATVM) program.
On Wednesday, Varney depicted the company as "the latest embarrassment for the [Obama administration's] green energy policy" on Fox & Friends:
But Varney did not mention that VPG received its loan under a program that President George W. Bush signed into law, or that the natural gas vehicles it was intended to subsidize are a component of T. Boone Pickens' energy plan, which Fox News personalities have previously supported. Pickens funded and advocated for VPG himself.
A gaffe according to the oft-repeated definition is getting caught saying something you actually believe.
Last week Harvard Professor and Daily Beast contributor Niall Ferguson offered an "unqualified apology" after remarking that the economic theories of John Maynard Keynes should be ignored because of his purported sexuality.
In the Harvard Crimson he seems to withdraw at least the "unqualified" nature of his remorse claiming "not for one moment did I mean to suggest that Keynesian economic as a body of thought was simply a function of Keynes' sexuality." According to the economist, "nor can it be true--as some of my critics apparently believe--that his sexuality is totally irrelevant to our historical understanding of the man."
Ferguson goes on to state "Keynes' sexual orientation did have historical significance. The strong attraction he felt for the German banker Carl Melchior undoubtedly played a part in shaping Keynes' view on the Treaty of Versailles and its aftermath."
Pop psychological gay baiting economic analysis is nothing new for Ferguson. UC Berkley economist Brad Delong highlighted the following passage of a 1995 American Spectator article:
"the ideas contained in The Economic Consequences of the Peace" "owed as much to his homosexuality as to his Germanophilia..." for "there is no question that the attraction Keynes felt for [Carl Melchior] strongly influenced his judgment..."
Furthermore University of Michigan economist Justin Wolfers located a passage in The Pity of War where Ferguson makes this claim: "Though his work in the Treasury gratified his sense of self-importance, the war itself made Keynes deeply unhappy. Even his sex life went into a decline, perhaps because the boys he liked to pick up in London all joined up."
In fairness to Ferguson, conservative economists have launched attacks on Keynes' sexuality for decades.
It's clear that Niall Ferguson was not apologetic for making the remark, instead he was contrite about being caught making the remark in public -- the economic equivalent of Todd Akin and Richard Mourdock.
Ferguson's attack on Keynes comes at a time when his own economic fundamentals are on the defensive. The academic grounding of the austerity crowd's recent efforts, the Reinhart-Rogoff study, is now the subject of late night mockery. The Keynesian view, now carried forward in public policy debates most strongly by Paul Krugman, is resurging and Ferguson is lashing out.
What Ferguson should really be apologetic for is not his simply economic homophobia -- there is no other appropriate term for claiming the beliefs of one of history's most noted economists should be distrusted because he enjoyed sex with men. J.K. Trotter of The Atlantic cut to the heart of the matter when he summed up Ferguson's argument as "being gay means you don't actually care about the welfare of children or the future of mankind."
Instead, the austerity economics Ferguson has pressed in the media has pushed policies condemning millions to the unemployment line. For this, I doubt any apology -- unqualified or not -- is forthcoming.