activity in the U.S., turned negative in the fourth quarter of 2012
according to the Commerce Department, just one day after a huge drop in
consumer confidence was announced.
This took the media entirely by surprise. It was the first time the economy went into negative territory since the recession ended. But this significant report was completely ignored by NBC “Nightly News,” carefully danced around on ABC “World News” and downplayed on CBS “Evening News” on Jan. 30. Print outlets downplayed the news by claiming it was “not so bad.”
CBS’s Scott Pelley announced the -0.1 percent GDP growth in the fourth quarter on “Evening News,” much to his credit, since neither of the other two broadcast network newscasts admitted it. He even pointed out that third quarter growth had been much higher: 3.1 percent. But he still introduced Anthony Mason’s report saying, “a shrinking economy over time spells recession but don’t panic yet this number is likely to be revised ...”
In contrast to his time as the economic “grim reaper” during the Bush years, Anthony Mason delivered a “silver lining” report about consumer spending, homebuilding and imports.
Mason said “only government spending cuts on defense caused overall economic growth to flatline.” That claim about “sharp government spending cuts” was also pushed in an Associated Press story that The Washington Post ran as well as a front page Post story on Jan. 31, but The Competitive Enterprise Institute’s senior fellow in finance and access to capital disagreed with such claims.
“Exports may have dropped, and it’s unclear what was meant by sluggish growth in company stockpiles. But spending definitely did not decline in the fourth quarter of 2012,” CEI’s John Berlau said. Rather, he said a more likely reason for the contraction was the “realization of the ‘regulatory cliff’.” Specifically, Berlau cited the impact of ObamaCare, Dodd-Frank and regulatory actions by agencies like the EPA.
In Mason’s CBS report, he also told viewers that the federal government attributed the drop in growth to weather disruptions like Sandy and concluded his story saying, “As one economist put it, ‘It’s the best contraction in the U.S. economy you’re ever going to see.’” That quote, published in The Wall Street Journal was disputed by Bob Brusca, chief economist of FAO Economics, on CNBC Jan. 31.
Brusca said flat out, “I don’t agree with that.” He cited a couple “bad trends” he sees including declining imports and exports, and “consumer confidence falling off a cliff.”
“Why does the consumer feel so bad if everything is so wonderful,” Brusca asked on CNBC’s “Squawk Box.” He said that some people say they see the economy accelerating, but “I just don’t see that.”
ABC deftly downplayed the bad news, not mentioning the term GDP until midway through the Jan. 30 segment. Anchor Diane Sawyer announced that the Dow Industrial Average was “flirting with” 14,000. She attributed the climb to a “rocket ride of economic energy” but admitted a “new report on growth created a speed bump.”
Sawyer then turned to David Muir who set out let boomers know if they can believe in the recovery. Onscreen the question was “Can you trust the soaring economy?” While stocks may be soaring, other indicators His conclusion ultimately was that the “foundation” for recovery was “real.”
The only actual mention of GDP was when Muir said, “ABC News reached out to a team of economists who said today’s blip in the stock market run, comes after a slight slowdown in GDP, the country’s economic output.”
Many other news outlets also sought to blunt the bad news. Continuing the left-wing theme that government spending/stimulus is the solution, AP wrote that “the likelihood of another recession appears remote,” unless of course there are more government spending cuts. The Jan. 31, USA Today Front page headline read “Dip In Economy Not So Bad.” Time magazine also made excuses with its headline: “Why Today’s GDP Report Isn’t As Bad As It Looks.” And Bloomberg Businessweek’s headline claimed “R-Word for U.S. Economy in 2013 is Rebound Not Recession.”
Just a day before the GDP rate was released, consumer confidence also took a nosedive: falling 8.1 points in January to a 14-month low of 58.6. That night only ABC mentioned consumer confidence, although he completely ignored the latest information on the subject. After an upbeat story about a “comeback” in the housing market, David Muir said good news about homes boosts consumer confidence. “Evening News” and “Nightly News” both ignored the data as well, but found time to cover a host of less important topics.