October 3 saw the Dow Jones Industrial Average close at a record high of 11,727.34. The “CBS Evening News” saw economic trouble on the horizon.
While CBS’s Anthony Mason offered qualified praise for the market’s recent rally, he sowed seeds of doubt about the market’s strength. Mason highlighted a retiree who “doesn’t trust this new rally” and then warned that “some Wall Street analysts see another bubble in the economy” with real estate.
The business reporter opened his story with the good news. “It took nearly seven years for the closing bell to ring in a new high for the Dow, but Wall Street was hardly going wild,” he told viewers. Then he aired a market analyst who downplayed the new record and compared it to a tied baseball game.
Mason helped him out, further undercutting the good news. “But while the Dow’s finally recovered, the tech-heavy Nasdaq is still worth less than half what it was six years ago,” he added.
That wasn’t all. Mason made it clear that some were “suspicious” about the market. “She’s not alone,” he said of one retiree who was still worried about the economy. “With existing home prices falling for the first time in more than a decade, and a new study showing homeowners spending more and more of their incomes on housing costs, some Wall Street analysts see another bubble in the economy.”
Yet over on NBC’s “Nightly News,” market watcher Maria Bartiromo told anchor Brian Williams that a rising stock market and falling gasoline prices are boosting confidence in the economy as Americans head into the end-of-year shopping season. “People will be able to spend money, they don’t have that pressure of high oil prices, high heating oil costs, and gasoline on their backs. So people are feeling good about the economy now,” Bartiromo noted.
On all three networks it was falling oil prices were assigned credit for the market’s rally, although most of the market’s performance in the years following 9/11 has happened as oil prices have climbed steadily upward.
The role of the Bush tax cuts in turning around the economy and boosting the market were completely ignored, even by NBC. Economist Larry Kudlow of its sister network CNBC has long argued that the tax cuts have held a significant role in the economy’s performance post-9/11.
“Apart from the inherent resiliency of our free-market capitalist economy, the fact remains that tax-induced capital cost reduction and resulting higher investment returns have boosted investment, healed business woes, and created employment growth near 2 million new jobs a year (and nearly 5 million since the middle of 2003 when the Bush tax cuts were implemented),” Kudlow wrote at National Review Online on March 11.
The conservative Heritage Foundation also has argued the Bush tax cuts have aided the economy, and the stock market. In a September 1 Web memo, policy analyst James Sherk noting that the “2003 tax cut lowered taxes on savings and investment,” added that the “consequences have been dramatic. Since June 2003, investment in the economy has surged by 28 percent in real terms and is higher now than during the late 1990s. The stock market has also recovered.”