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CNN Brings Negative View to 'Issue #1': The Economy

     “Issue #1 is your economy,” CNN host Ali Velshi announced March 17, as CNN launched a new mid-day show focused on the issue polls show is the top priority for Americans in the election season. Since then, “Issue #1” has brought viewers “disastrous” economic indicators, gas price laments and the “mortgage meltdown,” echoing negative economic messages elsewhere in the media.


     In coverage during the first two weeks of June, “Issue #1” has served up negative spin on the economy, looked to the government for help in the job and housing markets and on oil prices, exaggerated stories of economic pain and suffering – including pets’ suffering – and participated in green advocacy journalism.


     “When I walk through this newsroom and tell people that it’s supply and demand,” co-host Ali Velshi said of oil and gas prices June 9, “I’m worried that I’m going to get tarred and feathered.”


    Velshi’s joke about his colleagues’ reaction to the reality of market forces illustrated a common media approach: ignore the real factors behind economic difficulties in favor of blaming something, anything – usually business.


     Rather than standing up to colleagues – and viewers – who demand bad news and stories of guilty businesses, Velshi, his co-host, Gerri Willis, and a host of contributors and commentators have perpetuated the negative spin on jobs figures and retail sales.



Negative Spin


     On June 2, co-host Gerri Willis kicked off two weeks of negative spin by announcing that in CNN’s world, the forecast for the U.S. economy is grim indeed.

  

     “[T]he mortgage meltdown has yet to cool,” Will said. “The credit crunch remains tight. On top of that, there are indications more and more Americans are spending their stimulus checks on debt and gas and not in retail stores.”


     But Willis’s world and the real world didn’t match up. The government announced just days later that retail sales were up 1 percent in May, the same month that stimulus checks began arriving.    


     As with retail sales, “Issue #1” spun May’s jobs report to make it seem as bad as possible. Velshi reported June 9 that “a lot of folks in this country are losing their jobs,” although the 49,000-job loss in May was lower than analysts had expected, and unemployment remains low relative to historical figures.


     Yet Velshi called the report “disastrous” and insisted on reporting that the news was “deflating some folks’ hopes that the economy was starting to turn around.”


     CNN contributor Allan Chernoff called it a “huge increase in the unemployment rate” and added that it “really indicates a downturn in the economy.” He didn’t bother to mention 5.5 percent unemployment is still quite low. And as The Heritage Foundation pointed out June 6, “almost half of the new entrants to the job market were teenagers,” fresh out of school and looking for summer jobs.


     In fact, the media described higher unemployment – 5.6 percent – as “low” during the Clinton administration.


    

Government as Savior


     The “disastrous” May jobs numbers offered “Issue #1” an opportunity to engage in another standard media practice: turning to the government for help in times of economic trial. Anchors, correspondents and commentators presented the government as the best-equipped entity to deal with a variety of economic issues.

    

     On June 6, Velshi asked a guest, “[C]an Congress do something to stimulate a job market?”


     “Solar, wind, these are the kinds of things that Congress can really be doing,” Velshi said on June 11. “It can really be – and that bill that was defeated had some of those components, but it also had this windfall tax, and that’s why the Republicans couldn’t stomach it.”


     Velshi’s co-host, Gerri Willis, exclaimed on June 3 that first-time homebuyers who are taking advantage of a troubled housing market – and cheap prices on good properties – couldn’t do it without the government. “Now, of course, this couldn’t happen without a little help from Uncle Sam,” Willis told her guest.


     But other economists, such as J.D. Foster of The Heritage Foundation, warn that “Uncle Sam’s” intervention in the housing market could make matters worse. “There is precious little good Congress can do in the near term,” Foster wrote March 31, “and much harm.”


     “The private sector is working effectively to sort through the problems in both the housing and financial markets by acknowledging its mistakes, admitting its losses, and working to keep troubled but credit-worthy borrows in their homes,” Foster wrote. “Yet Congress seems determined to ‘do something.’”


     Likewise, “Many of you are looking for an immediate fix” to gas prices, CNNMoney.com’s Poppy Harlow said June 10. “The CTFC, that’s whose job it is to oversee these markets, [is] holding a hearing this afternoon trying to figure out a way to better police the markets.”


     As the Business & Media Institute noted, gas price investigations over the years have yielded no evidence of wrongdoing on the part of those in the market.



Doom-and-Gloom


     Like many other media outlets, “Issue #1” has exaggerated economic hardship, highlighting worst-case scenarios in stories that make it seem as though every average American is struggling to make ends meet.


     CNN correspondent Kate Bolduan relied on what is apparently becoming a staple in hard-times coverage: the sad puppy economic indicator. BMI noticed the idea on CNN “Newsroom” during a March 4 segment reported by Sue Roesgen. Bolduan revived it June 4 on “Issue #1.”


     “The local animal shelter should be the last place hit by the housing crisis,” Bolduan said. “But animal advocates say nationwide this is one of the unexpected consequences of the struggling economy.”


     Bolduan said pets are being turned in to shelters, left in abandoned homes or put out on the streets as Americans struggling to pay the bills are giving up their beloved pets. She did acknowledge there are no actual statistics to back up the claim – merely anecdotal evidence from “animal advocates.”


     A June 10 segment featured Dana Scott, a Georgia soccer dad who uses a bit more gasoline than most people, because his daughter’s traveling team has strained his budget.


     “For Dana Scott, this is the final trip of a very long, gas-guzzling soccer season,” CNN correspondent Rusty Dornin reported. “For Scott and other parents, the final whistle has come none too soon for their wallets.”


     And, like other media outlets, “Issue #1” attempted to tie celebrity hardships to “everyday Americans” by reporting about mortgage problems for entertainment legend Ed McMahon, who is facing foreclosure on a multimillion-dollar home in California.


     “Ed McMahon is wrapped up in the mortgage meltdown,” Willis reported June 5. Real estate broker Robert Pitts said McMahon “is a normal person. Foreclosures happen to everyone. You just get behind and you just – you know, it’s a snowball effect.”


     But McMahon’s mortgage problems weren’t related to the subprime crisis. Instead, he was the victim of several expensive divorces, expensive home repairs and a neck injury that prevented him from working. Compounded together, multiple unfortunate issues led to McMahon’s mortgage problems; his are not everyman struggles.



Green News Network


     Just as “Issue #1” it isn’t immune to exaggerating hardships, it also isn’t immune to another popular media theme: going green.


     “You should be embarrassed,” Willis said to correspondent Miles O’Brien after O’Brien admitted to driving a Yukon SUV that he said gets 3.3 miles per gallon. “I should be, I should be,” O’Brien responded.


      GMC, which manufactures the Yukon, estimates it will get 14 miles per gallon in city driving.


     O’Brien has his own reputation as a global warming alarmist. He has a long history of promoting environmentalists’ catastrophic predictions of global warming’s effects, calling for more taxes to combat emissions and attacking scientists and others who question the validity of alarmists’ claims.


     A few days later, Velshi turned green judgment on the show’s viewers.


     “How important is it to you to be green?” Velshi asked June 11. “Forty-three percent of you say somewhat; 33 percent of you say very and 24 percent say it’s not at all important to you to be green. Be nice, people, it’s the earth.”


     “Issue #1” also touted the purported benefits of the since-failed Lieberman-Warner energy bill, which would have established a “cap-and-trade” system for carbon emissions.


      “It could make a huge impact on pollution in this country,” Willis said June 2. “But our next guest says it could also make a huge impact on low-income citizens, giving them new jobs.”


     Green For All founder Van Jones, whom Willis acknowledged was an “activist,” predicted the bill would result in “millions of new jobs.” But neither Jones nor Willis mentioned the job losses that would be associated with a bill like Lieberman-Warner.


     The measure “would spark a temporary increase in employment in the first few years as regulated companies invest heavily to comply,” according to The Heritage Foundation. “After that, however, the bill causes [net] job losses that are expected to exceed 500,000 before 2030 even under the most optimistic assumptions.”



The Good


     But “Issue #1” hasn’t been all bad. In fact coverage of political issues, such as Lieberman-Warner and the economic proposals of presidential contenders, has shown glimmers of hope that as the show matures, it may find a middle ground.


     In a June 2 report on the bill, correspondent Kate Bolduan reported both sides of the debate over the cap-and-trade legislation.  “[C]ritics of the bill will be out arguing that the economics, the cost of this bill, much outweigh the benefits of this bill. They say that really that this bill would spike energy costs and damage, they even say, devastate, the economy and that burden will then, of course, fall on the U.S. consumer by means of higher gas prices, higher electricity costs, and even job loss.”


     On June 6, CNNMoney.com’s Poppy Harlow also highlighted a report estimating huge costs associated with plans that supposedly would fight global warming worldwide. “[I]t’s going to take an investment of $45 trillion,” Harlow noted. “Now that $45 trillion figure, it’s hard for anyone to fathom. It is three times the size of the U.S. economy.”


     Coverage of the presidential campaigns has also turned in some informative reporting. “Sen. Obama wants to maintain the Bush tax cuts for everyone except high-income taxpayers,” Jeanne Sahadi of CNNMoney.com reported June 4. “Sen. McCain wants to maintain them for everyone.”


     And “Issue #1” has been better than some other media outlets in explaining why oil prices are high.


     On June 5, Harlow broke down some of the costs associated with a gallon of gasoline, encouraging angry consumers to “blame … the oil market. They price for oil accounts for more than 70 percent of the price of gas.” She added that a state-to-state price difference “really comes down to taxes, distribution and marketing.”


     Velshi also helped explain inflation worries, acknowledging June 11 that the demand for ethanol has increased demand for corn, which has contributed to the rising cost of numerous foods that use corn.


     Even amid the negative spin and doom-and-gloom reporting, Velshi has shown some optimism. “Well, 45 percent say [their personal financial situation is] healthy; 28 percent say shaky, 9 percent say recovering and 19 percent say flatlining,” he said, citing the show’s “Quick Vote” poll feature June 5. “That’s kind of a hopeful outlook. I’m glad about that.”