| Tune into the network news shows any time during the last year and you'd likely find reporters warning about 'an economy just a bit off-key' or even a 'recession.' The U.S. economy has been depicted as one major event away from collapse on all three evening news shows on ABC, CBS and NBC.
The networks focused on almost every unfavorable piece of news they could find to harm the economy. Hurricanes, housing, gas prices and jobs all filled the TV screen. On the April 28, 2006, 'World News Tonight' broadcast, Elizabeth Vargas showed how even one of the best economic days of the whole year was tarred by pessimistic reporting. 'Now to the economy. New numbers show it was extremely strong in the first three months of 2006, growing at an annual rate of nearly 5 percent - the fastest pace since 2003. It's all the more remarkable when you consider the growth came despite a lot of negatives.'
Ryan Ratcliff, of UCLA's Anderson School of Management, was part of the network trend toward doom-and-gloom in the housing market - warning of a 'worst-case scenario' that could send the economy 'into recession.'
Those 'negatives' were evident on all three networks - more than twice as often as positive stories about the economy. And whether it was the media coverage or not, something clearly was impacting the public's mood.
CBS reporter Jim Axelrod pointed out the contradiction between good economic news and public perception in a May 30, 2006, 'Evening News' story about new Treasury Secretary Henry Paulson. 'The administration needs a salesman. No matter how much they trumpet 5.3 percent economic growth in the first quarter, 5.2 million more jobs since August 2003, or unemployment down to 4.7 percent, there's another number to contend with. In the most recent CBS News poll, just 34 percent approval of the president's handling of the economy.'
That wasn't even the nadir for Bush's economic polling numbers. The May New York Times/CBS poll gave Bush a pathetic 28 percent positive assessment and reflected the pessimistic view of the network news far more than the economy's actual performance.
Instead of celebrating how the country weathered last fall's storms and huge spikes in gas and oil prices, ABC, CBS and NBC spent the 12 months from Aug. 1, 2005, to July 31, 2006, making the case that we are at risk of sending 'the economy into recession.'
This isn't the first time. The slogan 'It's the economy, stupid' helped launch Bill Clinton into the West Wing in 1992 because the media widely reported the U.S. economy was in shambles. But The Washington Post admitted the truth - two months after the election: 'growth for the second half of last year was the strongest in five years.'
Two years ago, the same slant returned. BusinessWeek Chief Economist Michael J. Mandel said the September 2004 economy was similar to the one Clinton enjoyed before re-election. He called it 'good news for Bush' that 'the economy looks uncannily like it did in the summer of 1996,' citing several variables - unemployment rate, inflation and consumer confidence - as similar for both incumbents.
But the media's treatment was far different. Stories about jobs during Clinton's reelection campaign were positive more than six times as often as they were for Bush, according to a previous Business & Media Institute report. Journalists praised the Clinton unemployment rate of 5.6 percent as 'low,' but downplayed a 5.4-percent rate under Bush, calling job growth 'anemic.'
The Case for the Economy
John Harwood, CNBC's chief Washington correspondent, explained that high gas prices 'obscure' what the GOP wants to brag about - 'and that's a growing economy.'
But the facts were there. In 12 months from Aug. 1, 2005, through July 31, 2006, the economy created more than 1.7 million new jobs and unemployment was a shadow of its post-9/11 numbers. Thirty-seven months of positive employment growth produced roughly 6 million new jobs. Second-quarter growth was 2.6 percent despite dark predictions and first-quarter growth was an amazing 5.6 percent. Wages also grew, ignoring a media mantra that they had been 'stagnant.'
The New York Times reported a 'surge in wage-and-salary income in the first half of this year.' Reporter David Leonhardt's Aug. 31, 2006, piece showed the depth of the good news for ordinary workers. 'Between the fourth quarter of last year and the second quarter of 2006, pay grew at an annual pace around 7 percent after adjusting for inflation, up from an earlier estimate of 4 percent, according to an economic consulting firm, MFR.'
This came only three days after Leonhardt and reporter Steven Greenhouse told readers the economy was failing to 'offer a prolonged increase in real wages' for the first time since World War II.
The media turned to manufacturing layoffs to illustrate worker woes, but The Economist magazine explained in its July 1, 2006, issue that the American manufacturing sector was flourishing - even with the much-publicized problems at General Motors and Ford. 'Net profits have risen by nearly 9 percent a year since the recession in 2001 and productivity has been growing even more rapidly than is usual during economic expansions,' stated the article.
Economist Larry Kudlow, host of CNBC's 'Kudlow & Company,' explained further in a July 11, 2006, column. 'Did you know that over the last 11 quarters, dating back to the June 2003 Bush tax cuts, America has increased the size of its entire economy by 20 percent?' he asked. 'In less than three years, the U.S. economic pie has expanded by $2.2 trillion, an output add-on that is roughly the same size as the total Chinese economy.'
But the media pressed on, using gas prices to portray the failing lifestyle of middle America. That approach has lost its timeliness, however. Prices made a rapid descent of more than 75 cents per gallon after their August peak of $3.03. Some oil experts even predicted a far larger decline. A front-page piece in the Aug. 30, 2006, USA Today cited gasoline analyst Fred Rozell predicting, 'We'll be closer to $2 than $3 come Thanksgiving' for gas prices. Whether the decline holds till the holiday is too early to tell, but gas prices dropped to $2.28 nationwide on Oct. 6, 2006. That drop is expected to help low-wage earners significantly.
Here are some of the other facts that received little coverage, but pointed to a strong economy:
- Good Job News: The unemployment rate is just 4.6 percent. That's below the average of each of the past four decades and equal to the lowest point of the entire Bush presidency. Job news was even better for anyone with at least a high school degree. High school graduates had a rate of 4.2 percent, and only 2 percent of college graduates were jobless. Strong Retail Sales: U.S. retail sales rose during August 2006 instead of falling as predicted. According to the Sept. 14, 2006, Financial Times, 'Economists had expected sales to fall by 0.1 per cent month-on-month, but in fact they rose by 0.2 per cent, after jumping 1.4 per cent in July, a report from the Commerce Department said.' Consumers Upbeat: Consumer confidence hit a seven-month high in early September, according to the Associated Press. 'The drop in pump prices is very visible to consumers and seems to have a huge impact,' Lynn Reaser, chief economist at Bank of America's Investment Strategies Group, told the AP.
Even the media can convince the public things are bad only for so long. Late in September, Bush's polling numbers began to improve as gas prices dropped. Kudlow had written about the relationship between the two back on April 28, 2006. As he explained, 'all the pollsters are telling us, there's an inverse relationship between rising gasoline prices and President's Bush's falling approval ratings.'
One of the most common ways reporters spun their reports was by who they chose to talk to. Reporters pick their own interview subjects, and nothing gives them more leeway than choosing which person to question and which interviews to include. More than two-thirds of the individuals quoted in these stories were used to tell the story of an economy in trouble. Three-fourths of the businessmen and a similar percentage of ordinary man-on-the-street interviews were used to illustrate everything from the 'pain at the pump' to the horrors of the housing market.
Many of those interviewed were angry. In gas price stories especially, most spouted anger at everyone from oil companies to the government. In an April 21, 2006, 'World News Tonight' report, one motorist complained about the price of gas and predicted 'It's going to soar and be $4 before we know it.' Over at 'NBC Nightly News' just four days earlier, another woman was even more outraged: 'Oh, my God! This is just utterly ridiculous,' she exclaimed about the prices.
The choice of businessmen was just as slanted. More than three out of four businessmen who appeared in economy stories were depicted as suffering the brunt of an economic downturn. In one NBC story, the network showed American Airlines desperately struggling to survive higher fuel prices - to the point where it was carrying less water for making coffee and flushing toilets to lighten the planes.
In an April 11 story, reporter Kevin Tibbles told viewers how 'the rising price at the pumps takes its toll on Illinois farmer Brian Duncan.' Duncan's 'machines, his fertilizers, even the half-hour drive to his kids' music lessons all depend on oil,' he added. Tibbles concluded that the rising costs posed a threat to the price of food 'and almost everything else.'
Analysts of all disciplines were used to make stories more negative about the economy. Weather experts predicted bad storms striking New England; oil analysts warned about the danger of higher prices; and economists warned how any wrong move by the Fed or a downturn in housing could result in a 'recession.'
In the Dec. 11, 2005, 'World News Tonight' story on 'the cool-down in the housing industry,' reporter John Yang looked for an expert comment from Ryan Ratcliff of UCLA's Anderson School of Management. 'The worst-case scenario is that the weakness in the housing market is such a drag on spending and employment that it tips the economy into recession,' he warned.
| Energy analyst John Kilduff used oil prices to predict the same result. He told 'NBC Nightly News' Jan. 21, 2006, that $70/barrel oil could 'be the breaking point for the economy.' Reporter Rosiland Jordan elaborated on that danger with what proved to be a totally inaccurate analysis: 'Meaning gasoline $4 to $5 a gallon, heating oil and jet fuel just as expensive - prices that could shock consumers' wallets and jeopardize their support for the Republicans.'
Jordan's gas price prediction proved to be $1- to $2-a-gallon short, though oil exceeded Kilduff's estimate by more than $8 a barrel. While oil hit $78.40 in July, the national average for regular gas never exceeded $3.03 all summer. Still, Jordan made the key point that did resonate - that bad economic news, even incorrect economic news, could hurt the Republicans in the mid-term election.
Energy analyst John Kilduff warned that $70/barrel oil could 'be the breaking point for the economy.' He was wrong.
Gas Prices Hold Unnecessary Sway
The media devoted a third of the stories and briefs to coverage of oil and gas issues - typically price increases. Eighty-five percent of the gas price stories were negative. 'CBS Evening News' anchor Bob Schieffer exclaimed April 18, 2006, oil had 'soared past $70 a barrel yesterday, and today it closed at an unbelievable $71.35.' ABC's Elizabeth Vargas cautioned that gas prices could cause 'a tipping point' that 'economists warn could affect the economy on many levels.'
| Of course, gas prices were high. From the moment Hurricane Katrina threatened the Gulf, the price spike became worse. Even when gas prices bottomed out at $2.12 a gallon in early December 2005, that was still higher than the previous year.
There were two huge problems with the media's coverage of gas issues. Stories repeatedly and incorrectly claimed that gas had hit 'record highs.' According to the Energy Information Agency, that record (adjusted for inflation) would be more than $3.12, but the post-Katrina high was $3.06.
And that price brings up the other problem - lack of context. At $3.06, that's 94 cents higher than its low for the year. Even if that price stayed the same all year long, that would work out to less than $9 a week for a typical driver.
'CBS Evening News' anchor Bob Schieffer complained that oil 'closed at an unbelievable $71.35' and incorrectly claimed that was a record high.
Still, the gas gauge became the gauge for the American economy, but reports failed to note that a typical driver travels 10,585 miles a year or 29 miles a day. Using the EPA's average fuel consumption of 22 miles per gallon for passenger cars, that works out to 481 gallons each year or just $452. And that meant one third of the economy stories were based on $8.70 per person each week - about the cost of three Starbucks lattes.
CBS News veteran Harry Smith finally confessed there was a problem with the network coverage on the August 31 edition of 'The Early Show.' 'It seems like a month ago we were all screaming with our hair on fire about the price of gas going over $3, no end in sight. And now it looks like it's dropping like a stone.' He was correct. Gas was at $2.81 per gallon when Smith made his comment. It fell an extra 53 cents through October 6.
The Business & Media Institute looked at all NBC, CBS, and ABC evening news stories containing the words 'economy' or 'economic' between Aug. 1, 2005, and July 31, 2006. The study explored news items the media explicitly tied to the health of the U.S. economy. The study's 258 stories and briefs addressed topics like oil prices, the 'housing bubble,' monthly unemployment reports and other government reports on the state of the economy. Each of those topics gave rise to other similar stories, but this analysis focused solely on those the media directly linked to the economy.
Stories were classified as negative news if the main thrust of the report was negative; for example, layoffs at a particular plant. Likewise, positive stories focused on news such as a strong job growth report. Stories were classified as briefs or full reports. Briefs were short one-person reports, typically delivered by news anchors, or short mentions in otherwise unrelated stories.
BMI also looked at how the stories included interview subjects - experts, man-on-the-street interviews, politicians, etc. They were grouped into five categories: analysts, businessmen, government/politicians, non-government and man-on-the-street. Analysts were people who were used for their independent expertise. Government/politicians included all elected or appointed employees of any U.S. government - federal, state or local. Businessmen ran the gamut from CEOs of major corporations to small business owners.
In the midst of a May 5, 2006, 'Evening News' story, CBS business reporter Anthony Mason made a telling statement about the economy. 'It's been a long road back for the Dow, but today I actually heard someone use a phrase I last heard in the late '90s calling this a 'Goldilocks' economy. Not too hot, not too cold, but just right.' That certainly wasn't how all three networks addressed the economy.
Reporters and their interview subjects repeatedly warned that disaster was either looming or already here for the U.S. economy. Sometimes they were almost laughably wrong. Trish Regan of the 'CBS Evening News' predicted skyrocketing interest rates in a Nov. 30, 2005, broadcast. 'The average interest rate on credit cards right now is 14 percent, but some analysts believe we may soon see average rates in the 20s. So, Bob, that gives you some idea of where things are heading,' said Regan.
According to Bankrate.com, the average fixed rate for credit cards was 13.08 percent as of Oct. 6, 2006 - lower than where it was in summer of 2005.
When Hurricane Katrina hit in 2005, the media reacted the same way. CBS's Mark Strassman explained that 'Wherever you live, Katrina's gonna cost you.' He told viewers of the threat of gas high prices because of storm damage to oil facilities. 'Turn off those pumps and prices you pay almost have to surge to new records,' he predicted. Prices went up, but 'almost' was right. No new records were set.
Sometimes the networks went so far, the result was hyperbolic. Randall Pinkston's story about college debt was one such occasion. Pinkston's June 27, 2006, 'CBS Evening News' piece was about young love in debt. 'Medical students Jason DeBois and Katrina Lust are young and in love, planning to marry in May. Their wedding gift to each other? Combined debt of nearly $500,000 in student loans.'
While Pinkston admitted that 'Jason and Katrina's situation is extreme because it includes medical school debt,' did anyone actually need to be told? That was almost six times more than the average of $84,454 owed by each household in the U.S., according to the Nov. 4, 2004, USA Today.
That media drumbeat of negative economic news may well turn into a funeral march for conservatives come November. Despite repeated studies about the biases of reporters or classic examples such as Dan Rather's National Guard story, too many viewers believe what they see on TV news. And many of these viewers also vote.
Even The Washington Post admitted negative news can sway opinion. The July 16, 2006, newspaper described its own survey of 'more than 2,500 online respondents' who were shown news clips of either rising gas prices or a story on job growth. Unsurprisingly, 42 percent of the group that saw the bad news about gas prices said they were 'worse off' than the year before. Only 29 percent of the group that saw a positive story on job creation answered that way.
That was just one instance. The three broadcast networks bombarded viewers with negative news in 258 stories they identified as economic. That barrage of bad news served as the backdrop for a year with strong economic realities - but that reality was almost impossible to hear over the din.
There are several things the media can do to improve their coverage of the economy. The first is to simply acknowledge the problem. When the economy is good, it is either downplayed or reporters find ordinary people or 'experts' to tear it apart. When the news is bad, it gets far bigger coverage. That needs to change. Here are some ways to make that happen:
- Select Experts Carefully: Reporters have huge discretion in choosing interview subjects. That gives them extraordinary power to mold or spin a story. Journalists need to be more careful in selecting a wide range of expert opinions instead of simply relying on the comments from man-on-the-street interviews. Cover Stories That Reflect the Data: There are always new data available about the economy. Sometimes these reports are open to interpretation and other times they aren't. When the news is clearly positive, the networks should deliver positive reports, not undermine them with negative news. Educate the Public: The news media have an obligation to inform the public. Complex economic issues remain complex because no one explains them. Even unemployment rates and job creation are more elaborate than they seem. The media need to help the public better understand so that the numbers have significance.