Media Matters is a watchdog on the nation’s mainstream media. It frequently calls out the national press for its herd mentality and its tendency to serve as mere stenographers for whomever is providing information.
Below, Media Matters reports on national economics writers who aren’t buying attempts to a create a conventional wisdom that Americans were somehow better off during the final nightmarish days of the presidency of George W. Bush.
Here is their report:
A media debate is swirling around whether Americans are better off than we were four years ago. According to five esteemed business and finance reporters from top news outlets, the situation has improved in almost all economic sectors.
In their attempts to grapple with the question of whether Americans are better off, cable news outlets have regularly failed to provide important context about the dire state of the economy in late 2008, when millions of jobs were lost.
Several veteran economics reporters and editors told Media Matters that the economy is better off, especially given the fact that this month marks the fourth anniversary of some of the worst shocks to the financial system.
“September 2008 was one of the scariest months I have ever experienced as a business reporter,” said Diana Henriques, who spent 22 years covering finance for The New York Times and is the author of several books on Wall Street. “We had seen Bear Stearns nearly fail, we had seen Fannie Mae and Freddie Mac taken under receivership.
“But those turned out to be footnotes to what erupted when Lehman Brothers filed for bankruptcy, AIG was on the brink of collapse. I went to work every day wondering if this would be the day the ATMs went dark, wondering if this is the day the American banking system failed, it failed in the great depression.”
Henriques and several other economics reporters cited the Lehman Brothers collapse, which occurred almost exactly four years ago, on Sept. 15, 2008.
“By the end of that week, American companies were having trouble raising cash to meet payrolls,” Henriques recalled. “If you look clearly at the functioning of the internal infrastructure this week four years ago, it was the scariest week I have ever spent as a financial journalist. Congress seemed paralyzed by inaction, the president didn’t seem to get what was going on. It was not clear if anyone was going to pull together enough public reassurance.”
Other veteran financial scribes point to the overall economic picture today as compared to 2008, while also noting that the positive direction of the economy is important, too. Their comments are supported by a number of key indicators: The economy has grown for twelve consecutive quarters; private sector employment has grown for 29 consecutive months, adding millions of jobs; and the Dow Jones Industrial Average has nearly doubled from its low point in March 2009.
“From an economic growth standpoint, clearly it is better,” Kevin Hall, McClatchy’s national economics correspondent, said about the country’s finances.
“If you go back and look at the charts — you can pull up the GDP chart, we are growing 2 to 2.2 percent — you would say it is clearly yes, compared to a 3.7 percent contraction in the third quarter of 2008, followed by an 8.9 percent contraction in the fourth quarter of 2008.”
He later added, “You look at how many jobs were lost, December ’07 to June 2009, 7.9 million jobs lost. That is a big, big number. That recession encompassed mostly the Bush era, but also four month of Obama. In the last 28 months, there’s been an increase of roughly 4.4 million jobs, which if you just look at that number, it is a tremendous growth period.”
“Clearly we are better off. I don’t know how you could say no,” he stressed. “I think we have taken the steps to shore up our banking system, people have become more proactive in paying down debt, the American consumer has taken steps to be more responsible.”
Greg Ip, U.S. economics editor for The Economist, offered a similar assessment.
“I would say [we are] better off than [we] would have been without his policies,” he said in an email, referring to the president. “Ordinarily, presidents have limited influence over America’s big, market-driven economy. However, Mr. Obama took office at a unique time when his decisions really mattered. His initial policy actions on stimulus and crisis relief for the banks really did make the recession less severe than it otherwise would have been. The recovery has been disappointing, in part due to things beyond Mr Obama’s control such as the crisis in Europe, higher oil prices, and state and local austerity. The one area where he could have done more was to cleanse the financial system of bad mortgage debt, but political opposition made that difficult, and it’s not clear how much difference it would have made: history suggests that recovery from debt crises is a drawn-out affair.”
Steve Pearlstein, a Pulitzer Prize-winning business and economics columnist for The Washington Post, cited a lag in median income, but found most economic indicators point to a better situation than four years ago.
“The stock market was going down very fast back then and our housing prices were going down fast, they went down quite a bit in the early days of Obama, but they probably are now higher, wealth wise,” he said in an interview. “If you look at direction, in those days things were falling fast and would fall quite far.