Monday, September 04, 2006

Memo To CNN: It's (Understanding) The Economy, Stupid.

There should be a rule that television reporters should do their homework before scheduled interviews -- especially during election years.

Homework might have helped CNN's John Roberts, subbing for Late Edition host Wolf Blitzer. Instead, Roberts offered a fact-challenged interview Sunday morning with Labor Secretary Elaine Chao.

The questions were reasonable, but when Chao recited well-rehearsed talking points and used creative math to justify the Bush Administration's economic record -- Roberts should have been prepared with follow-ups. Instead, he moved on to other topics.

The result? Roberts essentially provided a platform for Chao to offer administration spin.

Let's break down the key points of the interview:

HOW MANY JOBS ARE BEING CREATED?

ROBERTS: The latest jobs report, 129,000 jobs created. That's versus a monthly average this year of 140,000. Another sign the economy is slowing?

CHAO: No. I think we are entering Labor Day and with the 36th straight consecutive month of job growth. Our economy has produced well over 5.7 million net new jobs in the last two years. ...

ROBERTS: But many economists will say, Secretary Chao, that it takes 150,000 to 200,000 jobs to keep up with economic growth, and that that's not happening.

CHAO: We're seeing about a monthly average about 140,000 net new jobs. This is just about that rate, which is necessary to have sustainable growth. Basically, we want wages to increase. We want the economy to grow. But not at a rate that's going to produce inflationary pressures. So right now, this rate is what we call not too hot, not too cold. It's just about right and sustainable.

ROBERTS: It's the Goldilocks effect, I guess you could say. ...

Let's review. Roberts should have combined the first two questions. Instead of asking the vague "Another sign the economy is slowing?" -- a question that sets up Chao to say "No." -- Roberts should have simply stated the fact that 140,000/month job growth isn't enough to keep up with the 150,000/month job growth economists say is needed to match population growth.

Chao says as much. She makes it sound as though the difference between 140,000 jobs/month and 150,000 jobs/month is nominal. But take away the spin, and what is Chao saying? During the strongest economic period for the Bush Administration, job growth is not keeping up with population growth.

For comparison sake, average job growth during the Clinton presidency was 236,000/month, according to the Bureau of Labor Statistics.

Roberts doesn't provide that context, though, instead offering banter.

Another relevant topic is the nature of the jobs being created. Are they high-wage jobs, or are they minimum-wage jobs? Are the new jobs ones with health care, or without? Neither Roberts nor Chao provide that context.

WHY DON'T AMERICANS FEEL GOOD ABOUT THE ECONOMY?

ROBERTS: Hey, listen, the economy is going to be a big issue in the upcoming election. People will vote, in part, on how they feel about the economy, how their wallets feel to them. But according to your new treasury secretary, what he said in a speech to the Columbia business school on August 1st, not everyone is feeling that extra fatness in their wallet. Let's take a listen to what he said.

(BEGIN VIDEO CLIP)

HENRY PAULSON, U.S. TREASURY SECRETARY: Amid this country's strong economic expansion, many Americans simply are not feeling the benefits. Many aren't seeing significant increases in their take-home pay. Their increases in wages are being eaten up by high energy prices and rising health care costs.

(END VIDEO CLIP)

ROBERTS: Secretary Paulson says not everyone is feeling it. Secretary Chao, what's going wrong?

CHAO: Well, first of all, overall wages have increased dramatically since 2001. So when we're talking about overall income, first of all, let's make it very clear, we are talking about increases in overall wages.

And the debate is really about how much one group may have increased their wages versus another. But everybody's wages has increased.

Now, when we talk about wages, we need to talk about total compensation. Because that is what's most important. And total compensation includes not only wages but also retirement benefits, health benefits, paid leave.

Overall compensation has been up well over 6% since 2001. So overall, compensation overall is strong and it's overall, compensation numbers that we should be looking at.

Secondly...

ROBERTS: Secretary...

CHAO: Let me just finish one other thing. When we talk about personal income as well, let's talk about disposable, after-tax income. And after-tax income is what's, after all, in people's pockets. And that has increased to well over 8.2% since 2000.

Now, think about these two numbers. What does a 6% jump over five years in "overall compensation" really mean?

First off, it means that compensation is growing at a pace of 1.2% per year. With inflation at about 3% per year, that's not "growth." That's "not keeping up with inflation." Furthermore, current compensation "growth" -- putrid as it is -- does not keep up with the compensation growth of the past seven economic growth periods.

How about average after-tax income? There's a joke that if Bill Gates walked into a room with nine impoverished men, one could say that on average, the 10 men were billionaires. Furthermore, by charting the change in average income, one could say that nine of the men had astronomical income growth.

Obviously, that's not a fair way of presenting statistics. But it's not far-removed from the parlor trick that Chao is playing.

Let's start with something simple. While real after-tax income rose 8.2% ($2,398/household) from 2001-2006, according to the Admininstration. But that's not close to the rise of $5,400/household of from 1996-2001, or the rise of $4,700/household from 1991-1996.

But not everyone's income rose equally (to be fair, that's true no matter which party holds the presidency. An analysis of changes in real after-tax income from 1979 to 2003 shows that while the Top 1% of wage-earning households saw a 129% increase and the Top 20% of wage-earning households saw a 54% increase, the Bottom 80% of wage-earning households saw increases of just 4-25% increase, or no more than a 1% increase/year.

Getting back to Roberts' question -- "Secretary Paulson says not everyone is feeling it. Secretary Chao, what's going wrong?" -- the correct answer is that "Real after-tax income is growing as quickly under the Bush Administration as it did under the Clinton Administration, and furthermore, only the Top 20% of wage-earning households saw any appreciable gain in income."

But again, Roberts wasn't prepared to provide any context to Chao's spin.

WHY DOESN'T BUSH GET CREDIT FOR "GOOD ECONOMIC GROWTH"?

ROBERTS: But I wanted to ask you. The administration has not gotten credit for good economic growth. It was 5.6% in the first quarter this year, that reduced to 1.9% in the second quarter. But still, it's moving ahead. Yet at the same time, in polling, in an ABC News-Washington Post poll, 64% of Americans said that the economy is either not good or poor. Only 36% said it's excellent or good. What's going on with that perception?

CHAO: Well, Pew Charitable Trusts has another survey. Basically, they conclude -- there's one strong factor everyone agrees upon. And that is our workers, our workforce needs more training and more retraining. ...

Chao goes on for another minute about job retraining. She doesn't answer the question -- "What's going on with that perception?" -- and Roberts doesn't steer her on track. I'm betting that the reason 64% of Americans said the economy is not good or poor is because their incomes aren't keeping up with inflation -- as stated above.

Economics isn't easy. But a little preparation by Roberts would have made for a better interview. It's not difficult to guess what Chao may say to defend the Bush Administration -- many of her arguments are talking points available on the White House or Department of Labor websites. But unfortunately, Roberts took the easy way out, asking questions that were little more than platforms to allow Chao to spin.

CNN viewers don't benefit from that sort of journalistic effort.

6 Comments:

Anonymous whoop4467 said...

What I never understand is why any CNN news program allows only one biased person to appear to answer questions that affect so many Americans ( now if this was fox news I expect it - if they have more than one, then it is usually 3 to one in favor of the Bushey). Most news anchors do not have the time to fact check or remember all the necessary facts to talk or ask intelligently. And the repuks say the MSM is biased against the Bushey. I am amassed more and more every day with the lies and spin that the repuks get away with in the MSM.

I heard someone say one day that a U.S. policy of waiting until a nation crumbles from within (with a little help from the ouside) is not a bad foreign policy. With all of the repuke lies, mis-informatiion, spin on top of spin, the selling of our government to lobbyist(by both parties), the divide between the haves and have-nots getting greater, our national debt growing by leaps and bounds daily, our lust for wars(hopefully temporary), government waste (both parties), our history of election fraud(both parties), our red/blue national divide, sending our jobs and technology overseas, loosing ground in our education system, heading toward a government headed by morality police, giving up many freedoms for safety and many other things, we are heading for implosion. Exactly why OBl and Al Qaeda only has to spend $10,000 dollars to accomplish their goals.

IMO it all started with LBJ and has been going down hill like a snowball, but accelerated greatly by the current Bushey group with fuel from the Bush sheepeys( Elaine Chao one of them).

3:59 AM  
Anonymous HughBeaumont said...

Would we expect anything LESS from a Heritage Fellow?

She is SUCH a worthless scum; an anti-labor, pro-offshoring, pro-big-Business SHILL. Quote all the stats you want, Lainey: they're empty just like your head and like the bin of Bewsh presidential accomplishments. This economy is shit and getting shittier. When is this asshole going to start caring about the . . . and I'm just spitballing here, THE LABOR of this country? Oh wait, Bushtools don't give a Cheney about the middle class and the poor, they only SAY they do.

1:57 PM  
Anonymous yourout said...

Who says he did not want to allow her to spin away?

The cynical side of me says he knew what he was doing and was right on script.

12:42 AM  
Anonymous acmavm said...

You think you're being cynical? I don't. I'd say more on the realistic side.

12:42 AM  
Anonymous Kahuna said...

Yesterday I heard him say there's still a debate on whether Saddam had WMDs, so I definately put him in the freeper camp now.

12:42 AM  
Anonymous butterfly77 said...

They have been giving her lessons on how to lie... when she first began as labor secretary she was as scared as hell everytime she would make an appearance and would keep on repeating the same things over and over. This morning while being interviewed by Soledad o'brien she kept saying thats not true, and then she would give over and over the statistics that her old ugly ass husband Mitch Mc Connell has given her. She doesn't know shit her husband does her job, that old bastard has been there for years and everytime the republicons give some speech his old evil ass is somewhere in the background. His lying ass was on face the nation yesterday to spew some more lies.

12:43 AM  

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