Top 10 Economic Media Myths Of 2007

The Business and Media Institute’s holiday gift is to smash the balls of fuzz on media’s tree of economic myths.

The mission of BMI is to audit the media’s coverage of the free enterprise system. It is our goal to bring balance to economic reporting and to promote fair portrayal of the business community in the media.

Here’s a taste, but you have to read all the myths’ arguments and rebuttals to get the whole truth. Indeed, you should carry copies of the whole BMI article around in your pocket to hand out to economic illiterates you meet. (Actually, you’d better carry a large brief-case full, or you’ll run out of article copies in minutes.)

The Media’s Top 10 Economic Myths of 2007
Compiled by the Business & Media Institute

10. Airlines are solely to blame for the unfriendly skies.
Media myth: Blame the airlines for all those flight delays; never mind the obsolete government-run agency creating the gridlock.

TRUTH: According to the Boyd Group: “The main cause of delays is the decades-long inability of the FAA to construct an ATC system that meets the demands of the air transportation system.

9. Consumer spending is the be-all, end-all of the economy.
Media myth: Without excessive consumer spending – especially at Christmastime – the U.S. economy will collapse.

TRUTH: “I think it is more valuable to look at what is happening to producers investing. If they are investing what consumers are saving, then the economy will be expanding, not contracting,”

8. The stock market is trouble, whether it goes up or down.
Media myth: One day the stock market can’t sustain growth; the next, we’re just one drop away from another crash.

TRUTH: “Stocks don’t look as overpriced today as they did in 1987. Today, the companies in the Standard & Poor's 500-stock index trade only a little above the historical average of 16 times profits for the past 12 months. In 1987, the S&P 500 was at more than 20 times profits.”

7. Anyone who ‘denies’ global warming shouldn’t be taken seriously.
Media myth: Global warming could cause a ‘century of fires,’ just as it has created allergies and ended winter fashion. If we don’t do something now (i.e. spend hundreds of billions of dollars), it’s only going to get worse.

TRUTH: Dissent against the “consensus” on global warming gets the cold shoulder from the media, but there is disagreement.

6. You’d better not eat/drink that!
Media myth: Forget the right to eat as you please; the nanny-state knows better.

TRUTH: Moderation is the answer and personal choice is better than government intervention. A pro-regulation slant came as no surprise from the same media that constantly repeat claims from the left-wing Center for Science in the Public Interest.

5. Most Americans are losing their homes.
Media myth: Americans everywhere are losing their homes to foreclosure, and the housing bust is going to ruin the economy.

TRUTH: The foreclosure figures most stories used came from RealtyTrac, a source that counts each filing in the foreclosure process. One house has to go through several steps in the process, so counting each one as a separate foreclosure is inaccurate. Rick Sharga, the organization’s president, said it is misleading to call the number total foreclosures – which is what the media kept doing.

Since January 2000, the national average home price has risen by 80.45 percent, according to the S&P/Case-Shiller index of home prices. But television news viewers were unlikely to hear that figure, because most reporters were focused on the 4.5-percent price decline since the third quarter of 2006. Declines from record highs should be put in perspective.

4. “Going Green” is good for America and business.
Media myth: Businesses are much better off if they go green, and that’s what people really want anyway.

TRUTH: "many major initiatives simply aren’t money-savers. They come with daunting price tags that undercut the conviction that environmental salvation can be had on the cheap,” wrote BusinessWeek.

3. Lenders are responsible for everyone’s debts.
Media myth: Drowning in red ink isn’t your fault; blame the guy who loaned you the money.

TRUTH: While some lenders may have been “unscrupulous,” no one holds a gun to someone’s head and forces him or her to take out a mortgage with a variable rate or without a down payment.

2. Free health care would be great!
Media myth: To save our children and the 47 million uninsured Americans, and to keep up with the rest of the world, we must have government-run health care.

TRUTH: Accounting for all those factors, one prominent study places the total for the long-term uninsured as low as 8.2 million – a very different reality than the media and national health care advocates claim.

In addition to faulty numbers, health care coverage suffered from a lack of numbers when it came to costs. The type of health care Clinton and Moore were pushing for is hardly “free.” USA Today’s Richard Wolf provided some refreshing honesty in his June 22 piece, reporting the drastic difference in tax rates for countries that provide “free” health care.

“In France and Britain, the tax burden is 42% and 27% respectively, as opposed to 12% in the USA, according to the Organization for Economic Cooperation and Development,” he wrote.

1. The U.S. Economy is in recession.
Media myth: The U.S. economy is nearly in, or is in, a recession.

TRUTH: The U.S. economy is NOT in a recession and has experienced strong growth.

Don Surber has more thoughts, worth reading, including how there cannot be a media cabal.